Tired of renting a house? Maybe applying for a Home Loan is the key!

Purchasing a house is one of the greatest investments you can have. If you’re hoping to stop renting, why not apply for a Home Loan? Here’s a simple and friendly guide to explain what you need and where to apply for a Home Loan.

What is Housing or Home Loan?

A home Loan is a huge amount of money you borrow from a bank or financial institution. This type of loan is used when you’re fully decided to purchase a house and lot or to renovate your current home.Home Loan or “Mortgage” has a flexible interest rate and payment terms depending on the bank, financial institution, or government agency.

Eligibility to apply for Home Loan

Banks are stricter when it comes to eligibility. Be sure to check the details below:

• At least 21 years old, but not more than 65 years old upon loan maturity
• Earning a combined monthly income of P50,000
• Has been continuously employed for at least 2 years
• For the self-employed, must be operating a legitimate and profitable business for the last 3 years

Note: Visit and check the latest requirements of your chosen bank for Home Loan application.

What are the requirements for Home Loan Application?

Just like the typical application for a Personal Loan, Banks will require you to finish their Home Loan application form whereyou must be a Filipino Citizen and at least 21 years old and above. Prepare the other requirements such as:

For Locally Employed Borrowers

• Any of the following: COE w / compensation, ITR, latest 3 months payslip, latest 3 months bank statements

For Self-Employed Borrowers

• ITR (1701 for the sole proprietary owner; or 1702 for Corporation)
• Any of the ff. Income documents: Audited Financial Statements (latest 1 year), Bank Statements (latest 3 months), Lease / Rental Contracts

For Corporate Borrowers

• Company profile: background, owners & key officers
• SEC Registration & General Information Sheet
• Bank Statement (latest 3 months)
• ITR
• Suppliers & Customer contact info (w / average monthly transactions)

For OFW Borrowers

• Any of the ff. Income documents: COE w / Compensation (issued within the last 6 months)
• Latest Crew Contract (for seafarer / seaman)
• Latest Employment Contract (for land-based OFWs)
• Allotment Slip
• Latest 3 months payslip

Collateral document requirements

• Copy of Collateral Title (TCT / CTC)
• Copy of Tax Declaration on land and/or improvement

Acquisition from the accredited developer

• Contract to Sell or Reservation Agreement

Home Construction or Renovation

• Bill of Materials and Estimates of Construction & Labor Cost
• Floor & Building Plan and Building Specification

Loan take-out / Home Equity

• Proof of amortization payments for the last 3 months
• Statement of Account from Mortgage Bank

All of these categories requires you to:

• Complete and sign the application form
• Provide clear copy of 1 valid government issued ID or borrower / spoon / co-borrower

 Note that Banks, Financial Institutions or Government agencies have different required documents.

What is the required salary in applying for Home Loan?

Banks or Financial Institutions have different salary requirements in applying for a Home Loan. Some banks would only require a Php 25,000 monthly salary while other banks are strict to Php 50,000 per month but allows you to have a co-borrower.

Note: It is advisable to research and compare the bank’s requirements especially when it comes to the required borrower’s salary.

Where to Apply for Home Loan?

Private Banks or Financial Institutions

Banks are now promoting Online Loan Application that allows you to fill out the form and attach the required documents without hassle. Banks have different and flexible terms of payment, loanable amount and interest.If you’re interested to apply for Home Loan, here are few banks to consider:

• Bank of the Philippines Island or BPI – The interest rate is fixed to 6.25% for 1-2 years with minimum loan amount to Php 400,000.
• Security Bank – Fixed interest rate to 6.25% for 1-3 years with minimum loanable amount up to Php 1M.
• HSBC –Fixed Interest Rate to 4.99% with up to Php 2M as minimum loanable amount.

There are still a lot of Banks that offers a Home Loan.Note that banks or financial institutions may change their interest rate and minimum loanable amount without prior notice.

Government Agency

Pag-Ibig Housing Loan is the most popular Home Loan among Pinoys as they find this agency less intimidating as compared to private banks. If your monthly contribution is consistent, you are most likely eligible for the loan and easier to have approval.

Remember that the approval of your application will still depend on the requirements you have submitted and the contributions you have settled for the past 36 months.

Final Thoughts

Never hesitate to apply for a Home Loan if you think that you are eligible, has the requirements needed, and are able to repay the loan on time.