Three important tips for easier home loan approval
At this point, you may have had the chance to compare housing loans in the Philippines to those in other countries, and found that trying to get a housing loan approved is just one part of the long process of buying your own home. It’s also easily the part that could make or break your dreams of buying or building your dream home.
It’s no simple feat to get a home loan approved, but instead of waiting for the decision, why not bolster your chances of getting approved? Here are some tips to make your home loan application and approval much easier.
Save as much as you can
You might think that this is obvious, but when you’re told to save, you might be focused on just the amount of the downpayment. At the very least, you’ll need to have 20 percent of the property’s total price ready, and that’s a large amount in itself especially with properties closer to the metro scaling higher every year.
You’ll have to factor in other things when it comes to your savings. Moving into a new home can be just as expensive as buying one, so you’ll want to factor an extra 2 or 3 percent of your paycheck into your savings to ensure that you’ve got enough to buy the house and make the move.
Having larger savings also lets banks see that your income is stable enough to support the payment of a loan. You’ll also have the option to put up a larger amount of money as the downpayment, as it reduces the loan-to-value ratio, giving you a better chance of being approved.
Do your research
There are a lot of banks that offer housing loan in the Philippines and most of them can give you options when it comes to interest rates, while some can even guide you towards the best home financing option based on your finances.
Between all that, you’ll also want to be on top of everything that you need. Ask yourself the following questions:
• How big a property do I want to purchase?
• Can I afford the mortgage on that property?
• Can I get someone to be a guarantor for my loan?
• How quickly do I want to be able to pay off the loan?
Factor these things into your research, and ask people who you know have already purchased homes. You’d be surprised how much faster your home loan application goes to approval if you find the right combination of favorable factors.
Get your finances in order
Banks and lending institutions in the country tend to be conservative when it comes to granting a loan, which means that every aspect of your finances, employment, and lifestyle will be called into question and analyzed.
Your loan approval will also depend on the information you provide, so make sure you get all the details right.
One of the characteristics that banks and lending institutions look at is the ability to maintain payments on a mortgage. When it comes to getting your finances in order, you’ll want to clear out any debts you may have and make sure any overdue bills have been paid.
If you’ve got accounts with other banks, the institution you plan on borrowing from will also take it into consideration. Finally, you’ll want to look at your credit history, bank transactions, and any financial documents that you submit. This way, you can spot any errors that may have been made, and have an explanation for any discrepancies that the bank might find.
The certainty of a home loan being approved is never 100%. The odds that your loan gets approved largely depends on the review process. It is most ideal to apply for an amount that realistically fits within your regular cash flow. That way, you can get a decision on your application faster.
Banks and lending institutions will vary in approval times, interest rates, and other loan conditions, making it best to compare loans via online platforms to see what best fits you.