How Does Housing Loan Work in the Philippines
If you are really interested in buying a house, you must understand the process of getting a home loan. It will require a lot of time and effort but it is worth it afterward.
One way of getting your housing loan application approved is by searching in Google, reading, ask friends and relatives have a piece of valuable knowledge.
As first-time buyers, we are afraid to do mistakes.
There is 3 Type of Housing Loan
Pag-Ibig housing loan – offers lower interest rates. But you have to wait for weeks before you receive the result of your application.
Bank loan – the loan approval is fast as five working days. It has a lower interest rate compared to in-house financing loans and is more flexible. Some banks offer amortizations payable for up to 20 years.
In-house Financing – loan is through the property developer, and is higher interest rates than a bank loan.
Check Minimum Qualifications
Banks require applicants to be Filipino citizens. But many still accept foreign applicants as long as they have a permanent visa or Filipino spouse.
They require applicants to be at least 21 years old at the time of their application. And should not be older than 65 years old upon loan maturity.
Applicants should also meet the bank’s gross monthly family income requirement, which is usually PHP 25,000 and above.
If you’re an OFW, you may be required to have a two-year employment contract.
Check your Savings Account if you have Enough Balance
Remember that you are not only paying the down payment, you will also pay the monthly amortization.
Factor in the property appraisal fees, credit report fees, real estate agent fees, and documentation fees.
With that, you need to show the bank that you can actually afford all these expenses by making sure you have enough funds in your savings account. A savings account with enough money will help you pay for those costs.
Maintain a Steady Source of Income
Banks are looking for applicants who have the means to repay their loans. That’s why they approve only those who have stayed at their jobs.
Self-employed applicants must submit their statements of account in order to prove that your business has been profitable.
Fix Your Credit Score
Before you submit your home loan application, make sure that you do not have existing debt or loan. It shows banks how responsible you are as a borrower.
You have to check outstanding debts if you settled them already. Verify that your records are clean, review your credit report. This will affect your house loan.
Have All the Required Documents Updated
All the documents that you will submit should be up-to-date, accurate, and consistent with each other. Any small mistake will cause your application to be rejected.
But don’t worry—banks usually give applicants some leeway to correct any inconsistencies in their records.
Be realistic in buying a house. You must check your financial capacity, so your application will not be rejected.
Ask yourself a million times if you can actually afford the property you like. Because getting shiny brochures from a sales agent which attract you most may cost you a lot in a long run.