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Owning a Property in the Philippines is now easy and affordable. Most developers are offering flexible payment terms with at least 20% equity that could paid up to 36 months. The remaining balance will be applied through Bank Financing or Housing Loan.
Applying for a Housing Loan is easy. In this blog, I will show you each step in applying for a Housing Loan and explain to you each process.
FIRST STEP :
Get Application Form and ask for the Pre-Processing Requirements from the Bank. Here's a list of the usual Pre-Processing Requirements:
Note : The SPA should be in the Bank's Format. Each Bank has their own SPA format and will not honor any other SPA Format except theirs. Also, take note that if the Borrower is in the Philippines while executing the SPA, it should be notarized and submit a photocopy of his/her passport showing the date of entry. If the borrower is in abroad to execute the SPA, it should be consularized (notarized in front of Philippine Consul) then have it Authenticated in DFA. The Final SPA should have a Red Ribbon and a Seal.
Note : The title should be a photocopy of the Owner's Duplicate, not the Certified True Copy from the Registry of Deeds. Banks will have to verify the Owner's Duplicate and compare it with the Registry of Deed's Copy.
1. Certificate of Employment and Compensation (COEC)
2. ITR for the past 2 years
3. Payslips for the past 6 months
1. Mayor’s or Business Permit
2. DTI Certificate of Business Name Registration
3. ITR for the past 3 years
4. Audited Financial Statements for the past 3 years
5. Bank Statements for the past 6 months
6. List of Clients and Suppliers
1. Consularized Certificate/Contract of Employment and Compensation
2. Payslips for the past 6 months
3. Proof of Remittances for the past 6 months
Submit these documents to the Bank and pay for the Appraisal Fee. Processing time will start upon submission of complete requirements and payment of the appraisal fee.
Note : Appraisal Fee is Non-Refundable. This includes actual inspection of the property as well as Title Verification in the Registry of Deeds.
THIRD STEP :
Appraisal or inspection of your property since this will be offered as Collateral. The Appraiser will conduct the actual inspection and verify the property’s title in the Registry of Deeds. In here, they will check if the title has no issues such as Lis Pendens, Error in the Technical Description, Annotations, and others.
Another step is the Credit Investigation (C.I.). This is a part of the verification process and this time it has to do with the Borrower’s Character, Capacity, Capital, and Condition. The Bank will verify the borrower’s Residence, Business, Employment, and Credit Checkings with other Financial Institutions.
Note : If the Borrower has record of bad credit such as cancelled credit cards and past due loans that were already settled, Banks will require you to submit a Certification from those financial institutions where you have a record and will be processed in a Case To Case basis.
If approved, the Bank will call you to schedule a meeting for the signing of Bank Documents. Expect a lot of documents to be signed such as the Real Estate Mortgage (REM) Contract, Promissory Notes (PN), Signature Cards, Auto-Debit Form, Letter of Guarantee (LOG) and others.
Note : LOGs are issued by Banks if the loan purpose is Purchase of a Property or Refinancing. Also, when signing these documents, make sure that you are not signing Blank Documents especially the LOG and the REM Contract. But for the PN, usually the Interest Rate and Date of Release have been left blank since the execution of this document is upon release of the loan proceeds.
FIFTH STEP :
Payment of the Bank Fees and Charges. These are charges for the Annotation of the Bank’s Mortgage on the title and are mostly Government Related Fees.
Note : These are ONE TIME PAYMENT ONLY except for the MRI and Fire Insurance which has to be paid until Loan Maturity.
SIXTH STEP :
The Bank will forward LOG to the Seller (for purchase) / Bank (for refinancing) and compliance of other requirements.
Here are the usual Post-Approval Requirements :
Note : All these documents must be under the Borrower’s Name
FINAL STEP :
Upon compliance and submission of All Documents, the Bank will annotate its mortgage and release the loan proceeds.
Note : First Monthly Amortization payment shall commence 30 days or one month after loan release. For example, if loan was released on February 10 the first monthly amortization shall will be on March 10 and every 10th of the month thereafter. Be reminded that the MRI and the Fire Insurance shall be paid yearly. But there are several Banks who charged MRI monthly, so borrowers must clarify this with their Banks.
MODE OF PAYMENT: