How to Get a Home Loan to Turn Your Dream House Into Reality

Owning a home is a cherished dream for many. For Filipinos, finally buying or building a house is one of life’s most important milestones. A home represents stability, security, and a personal space you can truly call your own. It can also mark a big change for your family, especially if you have children. However, turning this dream into reality can be challenging, and the cost of construction often becomes a major hurdle.

In the Philippines, there are three common types of loans available for aspiring homeowners. Government-backed loans and bank loans are among the most popular options for securing the funds needed to build or purchase a house. These loans can also be used for renovation projects on an existing property. In this article, we will explore the main types of home loans in the Philippines, outline the general process of applying for one, and explain the basic requirements for eligibility.

Types Of Home Loans In The Philippines

Bank Home Loan

Applying for a home loan from a bank can be a rigorous process, often involving a detailed review of the borrower’s capacity to repay. In the Philippines, most banks offer different types of home loans, allowing qualified applicants with complete requirements to choose an option that best suits their needs. Compared to other financial institutions, bank home loans typically have lower interest rates. Still, additional expenses such as mortgage registration, notarial fees, and fire insurance premiums can increase the total cost.

PAG-IBIG Housing Loan 

With a PAG-IBIG Housing Loan, members can borrow up to ₱6 million to purchase a home, condominium, or residential lot. The loan is available to both employed and self-employed members. One of its key advantages is the option for a repayment term of up to 30 years. It is also designed to be accessible for the middle-income sector, with regulated interest rates.

Real Estate Developer Home Loan 

Housing loans from property developers are available for buyers looking to acquire properties that are either already built or still under construction. These in-house loans, unlike bank loans, are typically processed faster and often require fewer documents, without the need for credit card approvals.

How To Apply For A Home Loan

Applying for a home loan largely depends on the financial institution you choose. For bank loans, the requirements can vary from one lender to another. Typically, you will need to provide proof of identification, proof of employment, proof of income, and undergo a thorough background check before your application is considered. It is best to ask the institution for its complete list of requirements and secure them before submitting your application. Keep in mind that banks may also have specific eligibility restrictions on who can apply for a loan.

Who Can Get A Home Loan In The Philippines?

Not everyone who can present proof of income is automatically qualified for a home loan. Lenders also evaluate the stability of your occupation, and your age can significantly influence your eligibility. For instance, applicants over 45 years old who wish to secure a 30-year home loan from PAG-IBIG will need their employer to provide insurance coverage until they turn 65. In addition, your spouse’s income and the number of dependents registered under your name are factors that can affect your application.

Turning Your Dream Home Into Reality

Turning your dream home into reality is within reach with the help of a home loan. Building or purchasing a home is an exciting milestone, but it’s important to ensure you have the right financial foundation before taking the leap. With thoughtful planning, a home loan can be a smart way to achieve your homeownership goals.

References

• Getting a Loan for a House in the Philippines? Read This First. (2023, March 9). Moneymax. Retrieved September 22, 2023, from https://www.moneymax.ph/loans/articles/housing-loan-philippines
• Pag-IBIG Fund. (n.d.). Pag-IBIG Housing Loan. Pag-IBIG Fund. Retrieved September 22, 2023, from https://www.pagibigfund.gov.ph/Availmentofnewloan.html