How I did not pay for MRI in my condo’s Bank Loan

sheridanFor my 24th birthday, I bought a condominum unit last November 2010 from DMCI Homes when Flair Towers was newly launched. I got my 1 bedroom unit at a pre-selling price of approximately 2.3M for a 29sqm pad. I paid a Reservation Fee of P20,000 back then, and the Downpayment was stretched in 40 months. It was an easy payment scheme for me considering that I am still building up my own business back then.

February of last year was the last month of my downpayment and I had to get a loan from the bank so I can pay off my balance in DMCI so I won’t get penalized. I asked for a 15-day extension for my loan approval as I had difficulties in some of the documents I submitted and my bank guarantee will not come out on time. I almost incurred a 3% penalty based on my balance of about 1.89M.

Being a real estate broker for the last 5 years, I would like to share to everyone that if you don’t pay off your remaining balance on time which is due to the delay of bank loan release, you will be penalized every month! Imagine in my case it would be roughly Php 57,000 per month my loan is getting delayed. I started applying for a bank loan late, less than 6 months before the deadline, and I had problems with the documents I submitted with Metrobank and BPI, so I had to find another bank to help me. Good thing I got the 15-day extension and the Security Bank delivered their promise. ūüôā

As my Php 1.89M got approved, there are processing fees to be paid and apart from the computation of the monthly amortization, I need to pay 2 mandatory insurance policies. The first one is the Fire Insurance which covers the unit in case of fire. This is a non-life insurance policy. The second one is the Mortgage Redemption Insurance. MRI protects the loan of the borrower in case of premature death. This ensures that the balance of your loan will be fully paid by the insurance company to the bank or financing institution who granted the mortgage, and your unit will be fully paid so your family will not have to worry paying your amortization anymore.Philam Logo

I got the fire insurance from the bank partner and paid approximately Php 5000 for my loan. For MRI, I was offered a Php 12,000 premium for my first year. I immediately declined to get the MRI from them as I know that I can save from MRI because I already have an existing life insurance policy. Good thing I am a financial planner and I know what to do. This is the reason why I am sharing this to you. I am glad that for the past 2 years I was able to save Php 12,000 per year for a money that will definitely go into waste as most MRI plans are term insurance that terminates year after year.

I own a Family Secure life insurance policy from¬†Philam Life¬†and I simply assigned part of my Php 3 Million life insurance coverage (in this case Php 1.89M) to the bank as one of my beneficiaries. Every year, I just update the bank and show them that my policy is still in force, payments are updated, and in good standing. In this way, I don’t have to pay MRI anymore and my payments life insurance policy, on the other hand, are saved and invested to the stock market that makes my money grow consistently for future plans like education of my kids and retirement fund.

FP with Charles
One of my Financial Planning sessions with a friend

I am always happy to give my financial planning service for free to people who are open about their financial goals and dreams. Knowledge is very important and it becomes so much powerful when people decide to be responsible and do something about it now.

I hope you are one of them.

Praying for your Success.

DJ Dimaliuat

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About the author: takehome@driven-group.com

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