When buying a property whether for end-use or investment, one of the main factors to consider is to avail for a Housing Loan. The next question is which bank to get it from and for how long will it be paid on a monthly basis?
The general rule to identify your loanable amount is the 30-70. 30% of your monthly income should be the maximum monthly payment for the loan. In other words, for every P100,000.00 ($1,874) monthly income, your allowable monthly payment is P30,000.00. This will cover a loan starting P3.6M ($68k) for a minimum 10 year given the lowest interest rate. Contact me anytime for an updated sample computation.
While waiting for your calls and texts, let us cover the top factors in choosing the best deal for a home loan.
- Interest Rates – for a 5 year fixed interest rate, the standard is 6.8%. The major bank that shares these rates are Metrobank, BDO, and Security Bank. While HSBC offers a lower standard rate of 6.75%. And PSbank offers the highest with a 7.5% interest. The best way, which I always recommend to clients, is to take advantage of the Home Loan Promos that each Bank launches for a period of time. The good news is that BPI will be launching a lowered interest rate with waived fees starting July 2018. Lowered interest rates down to 6% for a 5 year fixed interest plus P60k waived fees on appraisal and handling are up for grabs! Contact me on this for more details.
- Requirements – Ease on the required documents is also a plus factor as it is already a hassle going through the scrutiny and credit investigations of the Bank. The most client-friendly Bank I have experienced this year is the Security Bank and BDO. The most conservative and strict is Metrobank, as they asked for other supporting documents, prior the official approval.
- Appraisal Fees – This is the first cash-out required by each Bank after initially assessing your capacity and legitimacy to avail a Home Loan. Appraisal Fees starts P3.5k til P5k. Most major banks offer have the same appraisal fees within Metro Manila except for Metrobank that requires a whopping P5k.
- Turn-Around-Time – How fast do they process it on a normal basis with complete requirements? Every Bank varies, but the best way to ensure that Bank Officers act on your Application is to always follow-up, through email and give them a call. Best to get the name and contact details of the Loan Officer from the Main Office (not the branch) to get the accurate status of your loan.
Other tips to get the best deal the fastest possible time:
- Get the certified true copy of the title and the tax declaration of the property you intend to purchase. It should be clean and free from additional annotations.
- Complete documents include, Valid IDs, Income Statements from the employer or your business documents and the latest 3 months Bank Statements. Be ready with the supporting documents as well, i.e. Marriage Certificate, Annual Income Tax Returns, References, etc.
- Follow-up at least every after 3 days, but be courteous and respectful with your loan officer or Broker and Agent handling the transactions for you.
Buying a home is not as easy as 1,2,3 but given the right property, good price and the promise of escalating valuation of your real estate investment will be worth it. Make sure to deal with Licensed Realtors with proven expertise and track record to avoid misrepresentations and unnecessary problems as you go along.
Feel free to comment below your personal experience in availing home loan in the Philippines.
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