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Mortgage Buydown Agreement Template for Philippines

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Key Requirements PROMPT example:

Mortgage Buydown Agreement

"I need a Mortgage Buydown Agreement for a property development in Manila, where the developer will provide buydown funds to reduce the interest rate from 8% to 5% for the first two years starting March 2025, with the agreement to be governed by Philippine law."

Document background
The Mortgage Buydown Agreement is a crucial document used in Philippine real estate financing when parties wish to establish a temporary reduction in mortgage interest rates. This arrangement is particularly common in new property developments or when sellers want to make properties more attractive to potential buyers by offering lower initial payments. The agreement details how buydown funds will be used to subsidize mortgage payments, typically for 1-3 years, before transitioning to the standard rate. The document must comply with Philippine banking regulations, particularly BSP guidelines on real estate lending and consumer protection laws. It includes comprehensive details about payment schedules, fund management, and the responsibilities of all parties involved. This type of agreement is especially relevant in a rising interest rate environment or when developers need to stimulate sales in new housing projects.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the borrower, lender, and any third party providing the buydown funds

2. Background: Explains the context of the agreement, including the original mortgage terms and the purpose of the buydown

3. Definitions: Defines key terms used throughout the agreement, including technical banking and mortgage-related terminology

4. Buydown Terms: Details the specific interest rate reductions, the duration of the buydown period, and how rates will adjust over time

5. Payment Structure: Outlines the payment schedule, including the reduced payments during the buydown period and the transition to regular payments

6. Funding Arrangements: Specifies how the buydown funds will be provided, held, and applied to the mortgage payments

7. Rights and Obligations: Lists the specific rights and responsibilities of each party under the agreement

8. Default Provisions: Describes what constitutes default and the consequences thereof

9. Term and Termination: Specifies the duration of the agreement and conditions for early termination

10. Governing Law: Confirms that the agreement is governed by Philippine law and specifies relevant jurisdictional details

11. Notices: Specifies how and where formal communications between parties should be delivered

12. Execution: Contains signature blocks and execution formalities

Optional Sections

1. Mortgage Insurance: Include when mortgage insurance is required or affected by the buydown arrangement

2. Third-Party Guarantees: Include when there are additional guarantors or security providers for the buydown funds

3. Property Sale Provisions: Include when addressing what happens to the buydown arrangement if the property is sold during the buydown period

4. Refinancing Provisions: Include when specific terms are needed regarding refinancing during the buydown period

5. Tax Implications: Include when there are specific tax considerations that need to be addressed

6. Force Majeure: Include when parties want to address extraordinary circumstances that might affect the buydown arrangement

Suggested Schedules

1. Schedule A - Payment Schedule: Detailed table showing payment amounts, interest rates, and dates throughout the buydown period

2. Schedule B - Original Mortgage Terms: Summary of the original mortgage agreement's key terms

3. Schedule C - Buydown Calculation Method: Detailed explanation of how the buydown amounts are calculated

4. Schedule D - Fund Disbursement Schedule: Timeline and process for disbursement of buydown funds

5. Appendix 1 - Required Disclosures: Mandatory disclosures required under Philippine banking and consumer protection laws

6. Appendix 2 - Contact Information: Detailed contact information for all parties and relevant service providers

7. Appendix 3 - Supporting Documents: List of all supporting documents referenced in the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































Clauses






























Relevant Industries

Banking

Real Estate

Financial Services

Property Development

Construction

Mortgage Lending

Housing Finance

Relevant Teams

Legal

Compliance

Real Estate Finance

Mortgage Operations

Risk Management

Property Sales

Banking Operations

Document Management

Financial Control

Relevant Roles

Mortgage Loan Officer

Real Estate Attorney

Banking Compliance Officer

Property Developer Manager

Real Estate Broker

Financial Controller

Lending Manager

Housing Finance Specialist

Banking Operations Manager

Risk Assessment Officer

Legal Counsel

Property Sales Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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