If you are ready to purchase your own property in the Philippines, locating and obtaining the best housing loan application may be a requirement for realizing your dream property.
One common mistake that borrowers make is focusing so intently on finding their dream home and the neighborhood in which they wish to live that they frequently overlook the question of how much they can afford now and how much monthly payment their salary can support.
Add to this the fact that purchasing a home entail additional cost. The reality is that obtaining a housing loan in the Philippines is a lengthy process, but not impossible. There are several methods for facilitating the application process for a home loan.
For instance, when purchasing a condominium or a house and lot, the first step is to get prequalified for a mortgage. Simply put, a mortgage is a loan used to finance the purchase of a condominium or house and lot. It makes perfect sense to have your money ready (at the very least on paper) prior to making an offer.
Then you’ll want to familiarize yourself with how mortgages and their associated interest rates work. Fixed-rate mortgages and adjustable-rate mortgages are available. The former is a type of loan in which the interest rate is fixed throughout the term, whereas the latter (also known as a variable-rate mortgage) is a type of loan in which the interest rate fluctuates based on the prevailing interest rate.
Arming yourself with useful information prior to applying for a mortgage will have a significant impact on your future financial situation. After all, a housing loan, like a home purchase, is a significant financial obligation that will follow you for an extremely long period of time.
As a result, we’ve compiled these tips to assist you in your housing loan application.
1. Get Pre-qualified
Understanding your financial capacity is the first step toward obtaining prequalification for a home loan. Your bank or lender will typically inquire about your assets, monthly income (or combined monthly income for married couples), liabilities, and projected down payment.
Your mortgage broker or loan officer can discuss your options with you and determine whether you are prequalified. However, being prequalified does not imply that you have been pre-approved for a home loan. Prequalification is a simple step that the majority of borrowers take to determine their borrowing capacity.
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2. Get Pre-approved
Pre-approval is a critical step in the property shopping process. You will be required to submit your most recent bank statements, employment information, proof of income, and your most recent income tax return, among other documents, to demonstrate that you have sufficient income to repay a mortgage loan.
If you are approved, you will receive a good faith estimate (GFE) outlining the loan’s terms, type, interest rate, and closing costs. Knowing the exact amount of your loan enables you to compare rates between lenders and identify those who overcharge.
3. Evaluate Your Housing Loan Options
Comparing interest rates between financial institutions can be difficult, but knowing which one offers the best deal can make a significant difference. In the Philippines, three of the most common types of home financing are in-house financing (from developers), bank financing, and Pag-IBIG housing loans.
What is an Inhouse Financing?
In-house financing is a straightforward program that developers typically offer to buyers who wish to purchase a condo or house and lot in installments. Due to the absence of third-party lending institutions, buyers deal exclusively with one company. There are minimal documentation requirements, but you should anticipate a larger down payment and a higher interest rate in comparison to other home loan sources.
What is Bank Financing?
This type of financing refers to the amount of money borrowed from a bank or financial institution for the express purpose of purchasing real estate, as opposed to financing a business.
Commercial banks offer some of the market’s most competitive interest rates. While the majority offer flexible housing loan applications, some have slightly more stringent or rigid requirements, such as higher income and a down payment.
Depending on the urgency of your loan application, you may face a delay in approval of up to 90 days. Additionally, once approved, the loan option is valid for up to six months, at which point you must reapply with your most recent documents.
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What is Pag-IBIG housing loan?
As a member of the Pag-IBIG Fund, you are eligible to apply for a Pag-IBIG housing loan. You can purchase a residential house and lot or a pre-sale condo unit through their program, or you can purchase a fully developed lot up to 1,000 square meters, have a residential unit constructed on a lot you own, or purchase a townhouse or condominium unit that includes a parking space.
4. Become Acquainted with Interest Rates
In the Philippines, housing loan interest rates are heavily influenced by the Bangko Sentral ng Pilipinas (BSP) key rate, which is currently at 6%. Typically, commercial banks will offer a slightly higher rate. For instance, if you apply for a Php4 million loan with a ten-year term (or 120 monthly payments) and an interest rate of 8.5 percent, you can anticipate a monthly amortization of Php49,594.28. You would have paid a total of Php5.95 million over ten years, including Php1.95 million in interest.
Thus, when getting a housing loan application, consider all other expenses in addition to the cost of the property. These include taxes, title transfer fees, and other costs associated with acquiring your dream home.
Find your Dream Property in the Largest Real Estate Brand in the Philippines
Camella is the country’s largest homebuilder, with a 40-year track record of producing high-quality homes. Camella has a long history in the industry and over the years has created a diverse range of high-quality homes set in world-class settings and dressed in awe-inspiring themes. These master-planned neighborhoods incorporate green spaces, lifestyle amenities, and commercial establishments.
The brand is focused on transforming residences into safer spaces for families, rather than simply places to live. We immerse you in rural solitude while keeping you close to city conveniences and accessibility.
Today, Camella is also offering pre selling and ready for occupancy or RFO condo units for sale across the country to give solution to the growing demand of city-living inside central business districts. The brand offers condo investments in Caloocan, Bulacan, Lipa, Puerto Princesa, Bacolod, Butuan and Davao City.
Browse and find your dream condo property here or contact us directly via the chat box for additional information.
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