Timing is everything. Whether you have yet to pick a house or condo unit, knowing what needs to be done, and when, to comply with the requirements of applying for a home loan is key. Your approval depends on your credit rating, credit behavior and some expert advice would definitely help you strike the best possible deal without the hassles.
Check out which category you fall under and know what the requirements are for your type.
For locally-employed borrowers
- Clear copy of 1 valid government-issued ID of you and your co-borrower/spouse/signatories of the load being applied for.
- Any ONE of the following income documents:
- Latest Certificate of Employment and Compensation (COE)
- Latest Income Tax Return
- Latest 3 months payslip
- Latest 3 months Bank Statements
For self-employed borrowers
- Clear copy of 1 valid government-issued ID of you and your co-borrower/spouse/signatories of the load being applied for
- Income Tax Return. Form 1701 for sole proprietary owner. Form 1702 for Corporation.
- Any ONE of the following income documents:
- Audited Financial Statements for the last 12 months.
- Bank Statements for the last 3 months
- Lease / Rental Contracts
For corporate borrowers
- Company profile such as background, owners, key officers
- SEC Registration and General Information Sheet
- Bank Statements for the last 3 months
- Income Tax Return (1702 for Corporation)
- Audited Financial Statements for the past 12 months.
- Authorization letter (for bank, business and trade checking)
- Board Resolution to Borrow / Mortgage
For OFW borrowers
- Clear copy of 1 valid government-issued ID of you and your co-borrower/spouse/signatories of the load being applied for
- Any ONE of the following income documents:
- Certificate of Employment with 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 OR bank statement for the past 3 months
For OFWs hired directly abroad, either a Consularized Special Power of Attorney if you have an ‘attorney-in-fact’ OR other relevant collateral documents.
Depending on your type of borrower, you might be asked for some ‘relevant collateral documents’ to further strengthen your financial credibility. These additional documents depend on the kind of home loan your are applying for.
Other Documents
Marriage certificate, if married
CENOMAR or Certificate of Non-Marriage if single
For Foreigners
For foreigners looking at applying for a home loan either for business or personal residence, it is good to note that the alien should be either married or is engaged to a Filipino national who will stand as the co-borrower.
A second scenario that a foreigner can apply for a loan is when he is single and has a relative (a brother or cousin) who is married to a Filipino national and the sister-in-law or the cousin’s wife could stand as the co-borrower.
What’s in it for me?
The loan’s interest rate may vary depending on the leniency of the bank that you are applying from. Fixed interest rates for the longest period of time are the usual selling points for banks to attract loan applicants. Others compete in the market by offering the best, fastest approval times upon completion of requirements.
Getting in the loop for promotional rates with the longest possible fixed term is also the best way to go when scouting for home loan applications. Year-end promotions are on offer for as much as 6% interest rate fixed for up to 5 years!
Those who are willing to wait in order to cut down on the interest rate could also apply for home loans thru Pag-Ibig Fund. While banks may offer between 6% - 7%, the government financial institution’s interest rate starts at 5.5% fixed interest rate good for 1 year.
Once you have decided which bank to apply with, you need to be aware that approved home loan applications are valid and are waiting for your signature from 6 up to 12 months. Make sure to ask the representative to advise you of the validity.
You should also try to know if you will be allowed to make recomputations for your loan in the event that you find yourself in a financial bump in the road.
What’s the best time?
Do not wait for the turnover before you start looking for a creditor. The sooner you get yourself busy in looking for creditors, the sooner you could get the legwork on the requirements and the sooner you get the approval going. If you wait for the turnover before you start applying for a loan, you might find yourself stuck in monthly payments.
If you are confident of your credit history, you could also open a credit card account to help bump up and show proof of your good credit performance. This will ultimately help you get a few steps closer to the door for that home loan approval.