Bank Financing
Most home buyers here in the Philippines cannot afford to pay off the property in cold cash. Imagine buying a condominium worth P2.4Million pesos and paying it all in one time. It would be too difficult! Only few individuals can afford to do this and even those people with enough money would like to leverage and extend the terms so that they can use their money somewhere else (like business and other investments).
This is the reason why housing loans and financing options are available to public in order for the people to own a house without having to shell out its total amount. This is one reason why real estate is a really good investment. There are properties out in the market that you can already move-in for as low as 5% of its total contract price! Such great leverage that you can already use the property with just a small amount of cash out.
While most of the Filipino employees are members of the Home Development Mutual Fund (HDMF), not all properties can be financed thru Pag-IBIG Financing. One can only borrow up to a maximum of P3Million using this fund. In our personal opinion at DRIVEN Marketing Group, a buyer who intends to borrow P2Million and more for a housing loan can already consider going thru Bank Financing since the interest rate for Pag-IBIG Housing Loan is already at 11.5% per year for loans P2,000,001-P3,000,000. This means that the bank interest rates are almost the same (some banks might offer lower interest rates) with Pag-IBIG Financing interest rates for this loan bracket.
Because of the growing need for housing loans, most buyers are considering to get a loan from a bank to finance their homes. Here we share the basic information that you need to know with regarding to Bank Financing Options.
What are the Requirements?
| Pre-processing Requirements | ||
| A. | Borrower Information | |
| • | Duly accomplished application form | |
| • | 2 valid identification cards | |
| B. | Income Documents | |
| If locally employed | ||
| • | Certificate of Employment (COE) indicating salary, position & length of service | |
| • | Income Tax Return (ITR) for the last 2 years or W2 | |
| If Expat Pinoy (Overseas Filipino Worker) | ||
| • | Certificate of Employment duly authenticated by the Philippine Consulate | |
| • | Crew Contract & Exit Pass from POEA (for seafarers) | |
| • | Proof of monthly remittances | |
| • | Notarized or authenticated Special Power of Attorney (BPIFSB format) | |
| If Self-Employed | ||
| • | Articles of Incorporation/By-laws/SEC Registration | |
| • | Audited Financial Statements for the last 2 years | |
| • | Department of Trade & Industry (DTI) Registration | |
| • | ITR with Statement of Assets & Liabilities (SAL) for the past 2 years | |
| • | Bank statements for the last 6 months | |
| • | List of Trade References (at least 3 names with contact nos. of major suppliers/customers) | |
| If Practicing Doctor | ||
| • | Clinic address/es and schedules | |
| If from Commission | ||
| • | Vouchers or bank statements (for the last 6 months reflecting commission income) | |
| If from Rental of Properties | ||
| • | Rental/Lease contracts (indicating name of tenants & rental amounts with complete addresses of properties being rented) | |
| • | Photocopy of Transfer Certificate of Title (TCT) &/or Condominium Certificate of Title (CCT) | |
| C. | Collateral Documents | |
| • | Clear copy of owner's duplicate of TCT/CCT | |
| • | Lot/Vicinity map certified by geodetic engineer | |
| • | Photocopy of tax declaration/tax receipts/tax clearance | |
| • | Endorsement letter/computation sheet/contract to sell from developer stating the contract price (for accredited developer project) | |
| For Construction Loan | ||
| • | Complete set of building plan | |
| • | Bill of materials/specification/cost estimates | |
| • | Building permit | |
| Refinancing of Loan | ||
| • | Statement of account from mortgage lender | |
| • | Proof of payment for the last 6 months | |
| D. | Fees | |
| Non-refundable appraisal fee of P3,000 | ||
| Post Approval Requirements | ||
| • | Original owner's copy of TCT/CCT | |
| • | Certified true copy of the latest Realty Tax Declaration on land and improvements under the name of the borrower/mortgagor | |
| • | Original copy of latest Real Estate Tax Clearance | |
| • | Health Declaration form (supplied) for MRI enrollment with Ayala Life | |
| • | Medical examination with Ayala Life, if applicable | |
| • | Fire/Lightning/Earthquake insurance coverage through BPI-MS, if applicable | |
| • | Opening of deposit account with any BPI or BPI Family Savings Bank | |
| • | For Corporate borrowers, Board Resolution/Secretary's Certificate (form supplied), if applicable | |
| • | Four copies of Special Power of Attorney, if applicable | |
| Fees | ||
| • | Mortgage Registration Fees | |
| • | Mortgage Redemption Insurance Premium | |
| • | Fire/Lightning/Earthquake Insurance Premium | |
