The essential requirements for the physical survival of a human being are air, food, water, shelter, and clothing. Among these needs, the most desired goal is to build and maintain an adequate shelter. Matter of fact, almost all Filipinos aspire to possess their own house. But then again, purchasing a home or property in the Philippines may be rather costly. Moreover, purchasing a home is a long-consuming process that requires a great deal of hard work and commitment. This is even notable if your only choice is to secure a loan from a lending firm. Obtaining bank approval for a loan is a difficult but not impossible task. There is a set of bank financing requirements for a housing loan that you must meet before the bank can accept your loan application. And, sure, the major requirement is your ability to repay the money that the bank will offer you. For much of the middle class, it will take all of your attention, effort, and smart financial preparation, and yet purchasing a property is one of the most significant accomplishments you can have. Prior to actually applying for a home loan, you must answer lots of questions. Are you stable financially in buying a house? Can you pay your monthly amortization on schedule despite an urgent situation and are you equipped with emergency savings? Are you prepared to make a long-term, maybe lifelong, commitment to a housing loan? Throughout this article, we will clarify what a housing loan is as well as explore the bank financing requirements for a housing loan.
What is a housing loan?
A housing loan is a form of finance provided to a borrower by a bank or financial institution for homebuying purposes such as the purchase of a completely built lot, acquisition of a modern house and lot, a townhouse unit, or a condominium unit, building or completing a housing property on land you already own, existing residential property upgrade or restoration, and refinancing an existing mortgage. Property owners and those who desire to acquire their own houses and yet do not have sufficient resources or bank balance to make quick expenditures or other upgrades are eligible for housing loans. As a result, borrowers may settle their loans in installments, helping to make buying a house and lot much more affordable.
What are the two different types of housing loans in the Philippines?
- Conventional Loan
A conventional loan requires you to make fixed payments over a certain length of time. Philippine banks provide house loans with loan terms of up to 20 years for a minimum of P500,000. Since these installments are scheduled, this form of repayment strategy allows a borrower to appropriately monitor his budget. This is perfect if you prefer a consistent payment schedule and are attempting to arrange your budget ahead of time.
- Flexible Loan
This form of house loan is often provided by banks. Just about all banks in the Philippines provide bank financing for home loans. Matter of fact, the application process may be laborious, and bank financing requirements for a housing loan can be extensive, with loan amounts and conditions changing among different banks. Flexible loans are conventional loans that are connected or integrated into a checking or savings account. Borrowers can lower their home loan interest by depositing cash into their checking accounts. Extra contributions can also be withdrawn at any moment without notifying the bank. Borrowers can also begin principal repayment at any time.
Are you qualified for a bank housing loan?
The following are the basic bank financing eligibility requirements for a housing loan:
- You need to be at least 21 years old, but not more than 65 years old when the debt matures.
- You need to have Filipino citizenship. If you have foreign citizenship you may qualify as provided as you have an approved visa, such as a working visa granted by embassy authorities, a quota/non-quota immigrant visa, or a sec 13A visa.
- You are required to have a monthly salary of at least P50,000.00.
- You must possess a steady source of income from work or a business.
- If you are an employed applicant, it is required that you have a regular working status with at least two years of employment.
- If you are self-employed, you must have had a successful and lucrative firm for at least two years.
What are the basic bank financing requirements for a housing loan?
Bank financing requirements for a housing loan differ significantly per bank, however, the following are the essential documents needed for a house loan application:
- The application form for the housing loan must be completed and signed.
- A clear copy of at least two valid IDs, such as a passport, driver’s license, PRC ID, SSS ID, OWWA ID, and so on. The IDs should have a photo and signature.
- If you are an employed applicant, you will need to present a photocopy of the most recent ITR or income tax return, an original copy of the certificate of employment, and a copy of at least three months’ payslips.
- If you are a self-employed applicant, you must provide a photocopy of your DTI or SEC registration, as well as audited financial statements for the last two years.
- If you are a self-employed applicant, you must provide the latest 6-month bank statements with the authority to undertake bank verification.
- If you are a self-employed applicant, you must provide a list of professional references. Consider at least three (3) suppliers and three (3) customers with active contact numbers and names of contact persons.
- If you are a foreigner, you must provide a photocopy of the Alien Certificate of Registration (ACR) demonstrating Permanent Immigrant Visa status, Alien Employment Permit (AEP), or Visa ID.
Banks can finance up to 95% of the assessed value of the property, although a 5% down payment is necessary. In the Philippines, different banks charge varying interest rates on house loans. The interest rate is also determined by your accomplished bank financing requirements for a housing loan. It is vital as a borrower that you conduct your studies prior to actually applying for a house loan in order to receive the best interest rates on the market. The conditions or duration during which you can pay back your bank loan are entirely up to you. The typical period for a house loan in the Philippines spans from 5 years to 30 years.
Read also: How to get approved in a Home Loan Fast?
Whether you want to refinance an existing house, build a house from the ground up, or purchase a new house, several banks in the Philippines provide financing options for every one of these through home loans. Home loans in the Philippines may very well support you in achieving your ambition of buying your dream home. It may also assist in transforming your small dwelling into a stress-free sanctuary. If you are an interested homebuyer, you may check out the new properties of BRIA Homes in Mindanao. BRIA Homes Digos and Kidapawan provide homeowners with multifunctional spaces for socializing, children’s playgrounds, and expansive green areas that welcome tranquil walks with the children. BRIA Homes primes itself on developing affordable house and lot packages and easy-on-the-pocket condominium units that cater to ordinary Filipino families who aspire to acquire their own homes. It had become the perfect choice for average Filipino workers who wanted to invest in a high-quality and affordable home. Visit www.bria.com.ph to reserve your very own BRIA property today!
Read more here: BRIA Homes Digos and Kidapawan End 2022 on a high note
Written by: MC Sanchez