Tag: home loan tips

Applying Home Loan Tips

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Most people are focusing on finding their dream house without knowing how much they can afford. They don’t even know how much will be the monthly payment their salary can accommodate.

Applying a home loan in the Philippines is complicated but it is possible if you will know the easy way for your loan application.

Here are some tips when applying home loan:

  1. Pre qualified

First step is to know your financial capacity for home loan. During the process of prequalified, the bank will ask your assets, monthly income, liabilities and projected down payment. The mortgage officer will tell you if you are prequalify and discuss you options.  Being prequalify does not mean that you are pre-approved for home loan. This step is let know how much will be able to borrow.

  1. Pre approved

During pre approved process, the loan officer or mortgage officer will required you to submit proof of income, employment certification, recent bank statements, latest income tax returns,  and other related documents so that the bank may know if you have sufficient income to pay off for a home loan.

  1. Housing Loan options

Know the housing options that best suited to your needs and standard of living.  There are three (3) options that available here in the Philippines namely, Pag-ibig housing loan, In-House Financing (from house developer) and Bank Financing.

In-housing financing is a program offer by the developer who wants to buy through a series of payment. There is a minimal requirements but expect the bigger interest rate and bigger down payment than Pag-ibig and bank financing. As Pag-ibig member,  you can avail their home loan services. Many banks nowadays also offers home loan.

  1. Interest Rate

Know interest rates so that you will decide the most favorable.  Also consider other expenses aside from monthly amortization such as processing loan payment, taxes, title transfer fees and other related fees. You should educate yourself regarding housing loan and corresponding interest rate function.

Getting Housing Loan Tips

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home-loan-tipsGetting housing loan is stressful most especially if you do not know the first step. There are many borrowers who is denied because they do not prepare and they do not know the process.

Here are some steps to maximize your chances:

1.    Assess your financial capacity
The lenders usually ask about your assets, monthly income, liabilities and projected down payment. They assess your income, credit history and debt service ratio.

2.    Clear your credit history
As borrower, you should review your credit history before submitting a house loan application.  Banks and other lenders are usually share information on delinquent or non-paying borrowers and history of non-payment is a big red flag for lenders.  You should first clear your credit history by paying bills on time, paid credit card balances and if you have unpaid load be sure not to mess up your credit during the loan processing as diligent lenders.

3.    Check with mortgage calculator
Mortgage calculator will calculate your monthly mortgage payment under different housing amount, interest rate, loan tenure, and annual income scenarios. In this case, you will be able to decide what finances can handle the payment scheme.

4.    Analyze your finances
Find out what you can spend before bidding on properties.  Make sure that your house loan will be suited to your finances because if not, it will cause you a lot of emotional and financial stress in the future.

5.    Maintain stability
Lenders prevent risky clients so it is necessary to become financially stable at the time of your house loan process.  It is essential that you maintain a stable cash flow and avoid new debt. Also, try to stick with your employer because taking a lower-paying job or quitting to become self-employed is another red flag for lenders.

6.    Increase your savings account
Lenders will check your savings account if you have enough money to pay off a various cash expenses such as down payment, home appraisal, loan processing fee and so on. Having a zero cash is a quick way to disapprove your housing loan application.

7.    Prepare necessary documents
Make sure that all documents needed are prepared including recent ID, proof of income, employment certification, ITR, payslips and other pertinent collateral documents. Lenders needs evidences of what you have to say.