If you are ready to purchase a home in the Philippines, locating and obtaining the best housing loan application may be a prerequisite for realizing your dream home.
Borrowers frequently make the mistake of being so focused on finding their dream home and neighborhood that they 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 home purchases incur additional costs. In reality, obtaining a mortgage loan in the Philippines is a lengthy process, but not impossible. There are several ways to streamline the home loan application process.
For example, when purchasing a condominium or a house and lot, the first step is to obtain a mortgage prequalification. Simply put, a mortgage is a loan used to finance the purchase of a condominium, single-family residence, or house and lot. Prior to making an offer, it makes perfect sense to have your money ready (at the very least on paper).
Then you’ll want to educate yourself about mortgages and the interest rates associated with them.. The former is a fixed-rate loan with an interest rate that remains constant throughout the term, whereas the latter (also known as a variable-rate mortgage) is a variable-rate loan with an interest rate that fluctuates based on the prevailing interest rate.
Educating yourself prior to applying for a mortgage will have a significant impact on your future financial situation. After all, a mortgage, like a home purchase, is a substantial financial obligation that will follow you for an indefinite period of time.
As a result, we’ve compiled this list of tips to assist you with your mortgage application.
1. Obtain Prequalification
The first step toward obtaining prequalification for a home loan is to assess your financial capacity. Typically, your bank or lender will enquire about your assets, monthly income (or combined monthly income for married couples), liabilities, and anticipated down payment.
Your mortgage broker or loan officer can help you sort through your options and determine if you are prequalified. Prequalification, on the other hand, does not imply that you have been pre-approved for a home loan. Prequalification is a straightforward procedure that the vast majority of borrowers use to ascertain their borrowing capacity.
2. Obtain Preapproval
Pre-approval is a critical step in the process of property shopping. To demonstrate that you have sufficient income to repay a mortgage loan, you will be required to submit your most recent bank statements, employment information, proof of income, and most recent income tax return, among other documents.
Youu will receive a good faith estimate (GFE) after the approval, outlining the loan’s terms, type, rate of interest, and closing costs. Knowing the precise amount of your loan enables you to compare rates and identify overcharging lenders.
3. Assess Your Home Loan Options
Comparing interest rates between financial institutions can be challenging, but knowing which one offers the best deal can be critical. Three of the most prevalent types of home financing in the Philippines are in-house financing (from developers), bank financing, and Pag-IBIG housing loans.
4. Familiarize Yourself with Interest Rates
The Bangko Sentral ng Pilipinas (BSP) heavily influences the housing loan interest rates in the Philippines. Commercial banks will typically offer a slightly higher rate. For example, 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 expect to pay Php49,594.28 in monthly amortization. Over ten years, you would have paid a total of Php5.95 million, including Php1.95 million in interest.
Thus, when applying for a home loan, take into account all other expenses in addition to the property’s cost. These expenses include taxes, title transfer fees, and other closing costs associated with the purchase of your dream home.
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Camella is the largest homebuilder in the country, with a 40-year history of producing high-quality homes. Camella has a long history in the industry and has built a diverse portfolio of high-quality homes set in world-class settings and dressed in awe-inspiring themes over the years. Green spaces, lifestyle amenities, and commercial establishments are all incorporated into these master-planned neighborhoods.
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Today, Camella also offers pre-sales and ready for occupancy, or RFO, condo units for sale throughout the country in order to meet the growing demand for city living within central business districts. Condominium investments are available in Caloocan, Bulacan, Lipa, Puerto Princesa, Bacolod, Butuan, and Davao City.
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