Many borrowers make the mistake of concentrating too much on searching for the house of the dream in their desired area that they usually fail to determine the amount they can afford now and the amount of monthly payment their income can handle.
Also, purchasing a house involves other extra costs. The fact is that getting a housing loan in the Philippines is a complicated process; however, possible. You can follow some ways to ease the home loan application. Having enough useful information on hand before you obtain a house loan will largely affect your future finances. So consider the tips below to help you get started.
Get Prequalified for the House Loan
You can do this by knowing your financial capacity first. Usually, lenders or banks will ask about your assets, liabilities, monthly income and your expected down payment. A loan officer or mortgage broker can talk to you about available options and inform you if you prequalify. But, being prequalified does not mean you are pre-approved for the loan. Prequalification is only one step that the majority of borrowers take in order to have an estimate of the amount they can borrow.
Getting pre-approved is a significant part of the home shopping process. You will have to submit your employment information, most recent bank statement and other related documents a lender needs to verify if you have enough income to pay the loan off.
In case you qualify, a good faith estimate will be given to you indicating the loan’s terms, kind of loan, closing costs and interest rate.
Weigh your Options
It can be challenging to compare rates between financial institutions. However, knowing the one with the most favorable rates can make a big difference. In the Philippines, the most common house financing options are bank financing, in-house financing and Pag-IBIG housing loan.
Commercial banks in the country have a number of the most competitive interest rates. The majority of them provide flexible home l oan options, like the bpi housing loan, though some require stricter or more rigid conditions like a higher income and down payment.
In-house financing is often provided by developers to property buyers who want to acquire a home in installment basis. This does not involve third-party lending institutions, thus buyers just deal with a company. The option involves requiring minimal documents; however, buyers have to expect a higher interest rate and a larger down payment than what other house loan sources provide.
Moreover, being a Pag-IBIG Fund member lets you avail of the Pag-IBIG housing loan. The program allows members to buy a residential home and lot, purchase a fully developed lot that does not exceed 1,000 sq.m., own a residential unit built on a lot you own and buy a condo or townhouse that includes a parking lot.