Types of Home Loans
Bank Housing Loans: - Offered by BDO, BPI, Metrobank, Security Bank, etc. - Interest rates: 6-9% per annum (fixed or variable) - Loan terms: Up to 20-25 years - Maximum LTV: 80% (you need 20% down payment)
Pag-IBIG Housing Loan: - For Pag-IBIG members with contributions - Lower interest rates (5.5-10.5%) - Longer terms available (up to 30 years) - Maximum loan amount based on contributions
Developer In-House Financing: - Direct financing from the developer - Easier approval, less documentation - Higher interest rates (12-18%) - Shorter terms (5-10 years typically)
Requirements
Basic Requirements (All Lenders): - Valid government IDs - Proof of income (COE, ITR, payslips) - Proof of billing address - Post-dated checks (PDCs)
For Employed: - Certificate of Employment - Latest 3 months payslips - 1 year ITR
For Self-Employed: - Business registration - 2 years ITR - Bank statements (6-12 months) - Audited Financial Statements
The Application Process
Step 1: Pre-qualification - Submit initial documents - Get pre-approved amount - Shop for properties within budget
Step 2: Full Application - Choose your property - Submit complete documents - Pay appraisal fee
Step 3: Evaluation - Bank appraises property - Reviews your credit - Makes loan decision
Step 4: Approval & Release - Receive Letter of Guarantee (LOG) - Sign loan documents - Loan releases to seller
Timeline: 2-8 weeks depending on bank and completeness
Pro Tips
- Get pre-approved before house hunting
- Compare rates from at least 3 banks
- Fixed rates give predictability; variable rates can be cheaper initially
- Factor in all costs: interest, insurance, processing fees