Housing loans and you: A quick primer

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After trawling through hundreds of online ads, talking to several condo agents on the street, and asking for suggestions on your Facebook news feed, you finally found your dream house. Now, all you have to do is come up with the money. While some people can afford to throw down cold, hard cash and buy the property outright, most of us will have to rely on good old housing loans. Thankfully, banks in the Philippines are taking note of the rising trend in home owning, and have made housing loans more flexible and affordable for the everyday Pinoy.

Housing loans are very easy to apply for, but you’ll have to spend some time preparing all the necessary documents you’ll need before you even get to the bank. While most banks require the same documents from borrowers, they do have their slight differences. If, for example, you are buying a house with your spouse, you might need to submit a copy of your marriage contract, as well as two government-issued IDs apiece. This is specifically for those taking out loans from BDO, PNB, BPI, Chinabank, and Unionbank. Additionally, BPI and PNB have separate application forms for co-borrowers.

Some banks will have very particular requirements to determine your eligibility for a loan. For example, PNB will require you to submit a certificate of employment, as well as the latest income tax return you can provide. RCBC and Chinabank both require your sedula and a residence certificate. Furthermore, the latter will want your resume and biodata for application. If all these forms and requirements make you feel a bit overwhelmed, don’t be! The general rule of thumb for most banks is that the more information you provide regarding your assets
and income, the smoother the processing of your loans will become.

But it doesn’t stop there. Banks will require further documents that pertain to the property that you will be purchasing. Some of them might require a Transfer Certificate of Title or a Condominium Certificate of Title before they provide you with a loan. You might even be required to submit property tax declarations and other documents, at the behest of your bank.


Citizenship will also play an important part in your eligibility for a bank’s housing loans. For example, the PNB and Chinabank will only lend to Filipino citizens, so expats need not consult with them. BDO, Metrobank, BPI, and RCBC however will lend to both Filipino citizens and foreign nationals. On the other hand, Security Bank and Unionbank will lend to anyone, regardless of citizenship requirements.

Another thing to consider about your eligibility for a loan is your age. Banks will only lend to people at least 21 years. However, if you will be at least 65 years by the time your loan reaches maturity, your bank might not be very inclined to approve the loan. It’s best to consult with your bank first about this, as some of them may be more lenient about their age requirements.

Of course, banks will also look at your income to determine if you are eligible for a housing loan. Metrobank and PNB have the lowest monthly income requirements, allowing those with an income of at least P30,000 per month to avail of their housing loans. BPI is at the midpoint with a requirement of an income of P40,000 for prospective borrowers. On the pricier end of the spectrum, BDO, Security Bank, and require their borrowers to have a monthly income of P50,000 per month. However, RCBC and Unionbank do not specify general income, but they do have them. If you’re looking to borrow from the last two banks, head on over to your nearest branch and ask about their requirement for general income to avail of their housing loans.

Depending on what you want to purchase with your housing loan, banks will give you an estimate of how much they can lend you while still making sure that you can make your payments. Major Philippine banks differ in their minimum loan amount, years to pay, and interest rate. With all these in mind, you will want to pick out a bank that gives you favorable loans at an affordable interest rate.

Security Bank offers the biggest minimum loan and lowest interest rate of all banks. They require a minimum loan of P1 million at an interest rate of 5.25%, payable in 20 years. BPI and PNB offer P400,000 and P750,000 minimum respectively, with a reasonable 5.50% interest rate. They differ in years to pay, with BPI offering 25 years and PNB with 20 years. Metrobank has a minimum of P500,000 payable in 25 years, at an interest rate of 6.0%. Chinabank and Unionbank are tied with their minimum loan of P500,000, both payable within 20 years at an interest rate of 6.50%. Finally, the priciest of these loans comes from RCBC. They may have a very low minimum loan of P300,000 payable in 20 years, but they charge an 8.80% interest rate. These figures come from 2016, and may have changed slightly during this year. Consult with your respective banks before you pick one out.

If you’ve prepared your documents and requirements well, you won’t need to wait very long to get your cash.
Most of these banks will process your loan within 5-15 working days. To be honest, you might spend more time working on your documents than waiting for your loan to be processed. If you’re looking to get a loan fast, you’d do well to start processing these documents now. There are plenty of detailed guides online that will help you step-by-step, so pull out your phone and start taking notes.

With all that, it’s relatively easy to avail of a housing loan for your dream home. With proper organization and coordination with your bank, you’ll be moving into your new home in no time.

ARNOLD JOHN PHILLIP OCENAR

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