Real Estate Mortgage Loan (REM Loan) Quiz

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.