Real Estate Mortgage Loan (REM Loan) Quiz

Study Notes

Real Estate Mortgage Loan (REM Loan)

A fixed-rate, business-related credit facility that is amortized monthly via post-dated checks.
Target market: Business owners, Lessors, Professionals, and Senior Executives within Metro Manila and neighboring provinces.

Product Features

Loan purpose: Working capital requirements, business expansion, emergency, or investment-related purposes.
Loan amount: ₱500,000 to ₱10,000,000.
Loan term: 6 months to 24 months.
Debt Burden Ratio: Maximum of 50%.
Interest rates: 1.5% - 2.5% per month, add-on.
Mode of payment: Via post-dated checks.
Due dates:
- For loan release on 1st to 15th of the month, due date is every 15th.
- For loan release on 16th to 30th of the month, due date is every 1st.
Processing fee: 1.5% of Principal Amount.
Documentary stamp tax: ₱1.50 for every ₱200 on Loan Amount.
Other related fees:
- Land Registration Authority Mortgage Registration Fee.
- Notarial Fee.
- Mortgage Redemption Insurance.
- Fire Insurance (for House & Lots, Offices, Residential Condominiums, and Commercial Buildings).
- Third-party appraisal fee (if applicable).
Pre-termination fee: 5% of total unpaid balance or ₱2,500, whichever is higher.
Interest calculation: Based on rule of 78 calculation.
Penalty: 3% of the total monthly amortization per month or ₱300.00 per month, whichever is higher.

Borrower's Eligibility

Citizenship: Filipino.
Age: 25 to 64 years old.
Minimum bank ADB or monthly income:
- ₱300,000 Bank Average Daily Balance (ADB) for business owners.
- ₱250,000 monthly income for employed.
Industry: Refer to list of acceptable industries.
Residence type: Owned.
Length of stay in residence: At least 1 year.
Credit Bureau: No negative findings.
Co-borrower: Required.

Acceptable Industries

Manufacturing/Trading/Distribution:
- Food- finished and raw materials.
- Food preparation supply.
- Pharmaceuticals.
- Medical supply and equipment.
- Beverages.
- Construction materials.
- Retail-gasoline, supermarkets.
Services:
- Construction and development.
- Employees of BPOs.
- Employees of Banks and Insurance Companies.
- Communications - Network, Telecoms, Electronics, Semi-conductors.
- IT-Developers and programmers.
- Employees of Gov't Owned and Controlled Corporations.
- Car Rental Services for Shuttle Purpose.
- Medical-related services and supplies.

Serviceable Area

Primary: National Capital Region.
Secondary: Batangas, Laguna, Rizal, Cavite, Bulacan, Pampanga.

Acceptable Collaterals

Hierarchy of acceptable collaterals:
1. Commercial property.
2. Prime residential property near a commercial area (subject to deviation approval).
Not acceptable collaterals:
- Row houses.
- Properties for sale.
- Raw land.
- Agricultural land.
- Dilapidated buildings/structures.
- Condominiums from non-prime developers.
- Ordinary residential house and lot.

Loan Valuation

Loanable amount: Maximum of 50% of market/appraised value.

The Credit Process

A. Loan Application Process:
- Sales Admin: Checks loan application and required documents.
- Encode personal and loan information in the database.
- Check for duplicate loan application in the database and inform the agent, referrer, or applicant.
- Credit Analyst/Officer: Conduct BAP/CMAP checking and credit evaluation process.

Description

This quiz covers the basics of Real Estate Mortgage Loan (REM Loan), a fixed-rate business credit facility, its features, and target market. Learn about loan purposes, interest rates, and repayment terms.