Getting a new home is one of the biggest milestones one can ever have in his/her lifetime. While it may come easy for some, others would require a reliable finance partner to make this dream a reality.
Applying and getting approved for a home loan may not be a walk in the park but here are some useful tips when getting a home loan from your trusted banking institutions:
See if you meet the bank’s minimum qualifications
To qualify for a loan, these are the most common eligibility criteria you must follow: must be between 21 to 65 years old upon loan maturity, must be a Philippine resident, if an OFW, special power of attorney must be provided as well as contract or certificate of employment (COE) approved by the Philippine Overseas Employment Administration (POEA), if you are a foreigner, you must meet VISA requirements and submit your Alien Certificate of Registration (Moneymax, 2020).
There are also minimum income requirements depending on the bank you’re applying to, as well as tenure requirements for employed individuals.
Evaluate your financial capacity
As a rule of thumb, you should buy a property you can afford. Look into your assets, monthly income and liabilities, and be practical about it. If you become overly optimistic, you might get disapproved anyway or worse, cost you more in the long run. You must then decide on the price range you can afford and just revolve around it.
Get your documents ready
Applying and getting approved for a home loan requires a lot of paperwork. To have a smooth process, make sure you have your requirements ready such as your valid IDs, billing documents, proof of income (employment certification, ITR, or payslips), and other relevant collateral documents (Security Bank Team, n.d.).
Improve your credit score
Your credit history tells how responsible you are as a borrower, and it can make or break your application. You’ll have to make sure that you pay your financial obligations on time, and when possible, eliminate credit card balances and unpaid loans.
Prep your savings account
When screening applicants, banks also look into the capacity of borrowers to pay up other home acquisition costs aside from the monthly amortization. On average, you’ll need at least 20% of your home price for down payments, so 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 (Moneymax, 2021).
Keep your lines open
Submitting all the necessary documents is not the end of your application process. After completing them, make sure you keep your lines open so that you can respond to any concerns or updates from your bank. Delaying your responses may also delay your approval time so make sure to be available to expedite the process.
Good luck on fulfilling your dream home, friends!
References
Moneymax. (2020). 9 Tips to Get Your Bank Housing Loan Application Approved. Retrieved from https://ph.news.yahoo.com/9-tips-bank-housing-loan-030047594.html
Moneymax. (2020). Everything You Need to Know About Housing Loans in the Philippines. Retrieved from https://www.moneymax.ph/loans/articles/housing-loan-philippines
Security Bank Team. (n.d.). Getting a Home Loan? Here are 8 Simple Tips to Get Approved. Retrieved from https://www.securitybank.com/blog/planning-to-get-a-home-loan-here-are-8-simple-but-effective-tips-to-maximize-your-chances-of-getting-approved/