A low peso-dirham rate creates a windfall and times like this, most OFWs play with the idea of making huge payments on their amortization. Should they?
Too iffy, as it weighs in a lot of factors, said Edwin Punzalan, country head in the UAE for Banco de Oro, which has direct remit partnership with Emirates NBD and bills such payments.
He explained that amortizations usually have a built-in clause that would require a penalty or a re-computation of the interest rate should there be changes in the payments.
“Kung babaguhin nila yan (If they will alter the payment plan), then that would be a different arrangement. There should be some re-computation as regards interest or fees because everything has been pre-computed na. The new plan could have a higher interest rate,” Punzalan said.
So, how can an OFW go around this?
“Put money into a savings account back home while the exchange is preferable, and use that to continue regular mortgage payments down the line,” said Sudhesh Giriyan, COO at Xpress Money remittance center.
“People in the middle of mortgages and payment plans could contact their financial providers to make advance payments – but this may incur renegotiation fees,” he said.
Moereover, he said it must be noted too, that the Philippine property market has been performing strongly of late, and OFWs “might not find distressed bargains to snap up” in case they open up to the idea of having a new investment.
