What is a house loan and what makes it beneficial to you? Housing loans give you (the buying public) the opportunity to own your dream house and real estate property, giving you more payment options when buying the property. Housing loans can also guide you in the direction of home ownership by having more affordable monthly installments.
To buy your dream home, here’s what you need to know when it comes to getting home loan in the Philippines!
Why Get a Housing Loan?
As previously mentioned, while housing loans provide many opportunities for home buyers, getting a housing loan is practical especially when seeking financing options. This happens right before closing a deal with your desired home. Compared to bank loans, they offer lower monthly mortgage payments.
Loans 101: Types of Housing Loans Offered in the Philippines
Government
To support Filipinos in buying their dream homes, various government agencies in the Philippines offer different housing loans such as SSS, GSIS, Pag-IBIG, NHMFC, and SHFC.
Banks
Here are the types of housing loans offered by banks: Bank of the Philippine Islands (BPI), Banco De Oro (BDO) Security Bank.
Government-Offered Housing Loans
Social Security System (SSS) Housing Loan
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When being guided with housing costs, this takes you to the Social Security System (SSS) Housing Loan. This government-offered housing loan provides a government-run social insurance program with a government-run approach alongside SSS housing loans that offer a lot of benefits.
GSIS Housing Loan
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Using the Ginhawa for All Housing Account Restructuring and Condonation Program, existing home account buyers are allowed to upgrade their housing accounts. The GSIS Housing Loan encourages full payment due to the partial interest, waiving of penalties, and reduction of partial interest reduction, which means that the sum of owed housing bills is lowered.
Pag-IBIG Housing Loan
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The Pag-IBIG home loan comes with a mission to provide Filipino individuals with a governmental-control approach. These individuals are particularly low-income and middle-income families who are given a chance to find affordable housing and own their dream homes. In addition, the Pag-IBIG Housing Loan is formerly known as the Home Development Mutual Fund.
National Home Mortgage Finance Corporation (NHMFC) Housing Loans
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The National Home Mortgage Finance Corporation (NHMFC) increases the loan supply for affordable housing and provides for the secondary market. This housing loan operates and finances home mortgages, compared to the Pag-IBIG Fund.
Social Housing Finance Corporation (SHFC) Housing Loans
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The Social Housing Finance Corporation (SHFC) Housing Loans provide low-income finance households and unauthorized settlers and assist those with lower incomes. Like LGUs that engage in housing developments, individuals obtain their own dream homes by collaborating and building projects with secondary markets.
Housing Loans Offered by Private Banks
Bank of the Philippine Islands (BPI)
This comes with the need for a fully completed application form alongside two legitimate identification cards. One of the best examples is, if you are married, both you and your partner the application must sign the application form. In case there is a co-borrower or co-mortgage, then filling out a second application form is a must.
Banco De Oro (BDO)
In need of funding assistance for different objectives? Banco De Oro (BDO) provides opportunities in support for purchasing a condo unit, a townhouse, a home, and a lot, as well as involving home improvement or renovation works, and home-building.
Security Bank
When dealing with Security Back, it is important to note that a minimum of age 21 and a maximum age of 65 is the time the loan matures.
Tips on Getting Your Loan Approved
First, it is essential to ensure that you are qualified. As a primary requirement, you are eligible for housing loans offered by banks when you are 21 years of age and not older than 65 years old. Applicants must also be self-employed as required by bank loans. 24 months of contributions are also very much needed primarily for Pag-IBIG, SSS, and GSIS housing loans.
Additionally, these three things should also be considered:
- Debts should be eliminated. It is recommended to make sure that all of your debts are paid off so that you will have a higher credit score.
- Ensure to always pay your bills on time. Often, Bills including electric and water bills and internet connection are needed when doing background checking procedures for bank loan applications.
- Ensure to have a steady income since loaning takes a lot of responsibility which requires financial burden. To qualify for a home loan, make sure to take this essential advice.
Loans Rejected?: 3 Reasons Why It Might’ve Happened That Way
You may be rejected if your credit score is below the minimum. As required by the lender, be aware of your credit ratings while shopping around for appropriate loans that are in keeping with your credit range so that you do not go through this mistake.
Unfortunately, not all lenders release this kind of information, which makes it more difficult for you to determine whether you are keeping a sufficient salary when securing loan approval.
While lenders take your income and credit into account, not all information may be told. With that said, there are additional reasons you can be rejected: Your history of employment, home stability, and liquidity issues or cash flow. There is no harm in taking these reasons seriously even if they have not immediately influenced you. Always remember to reapply whenever you are in a much better situation.
We hope learned something from this, and we wish you well on your journey to getting your dream home through the types of housing loans in the country!