Simple Guidance For You In Housing Loans

You are about to make one of the most important and most stressful decisions in your life. That is buying a home. However, in order to do so, you will need financing. There are so many banks and providers of loans in the Philippines, offering so many different types of home loan that can be quite difficult to find your way through.

Below, is a series of steps to follow that will make the loan application simpler.

1. Determine the amount to borrow

Before you approach a bank or provider of loans in the Philippines, you need to determine your annual income so that you can borrow the amount you need. Currently, many of the banks and loan providers with websites have an online calculator that computes based on the average interest rates. Just input your annual or monthly salary,  the amount you wish to borrow and the length of time over which you wish to repay the advance.

The calculators are fundamental and they do give an estimate of the amount you may be qualified  to borrow. They don’t consider any existing loans or additional outgoings held.   You must remember that very few lenders will consent to a credit of more than 80% of the assessed value of the property and you must find the initial 20% of your funds or another source.

2. Find out if you will qualify for a home loan

It may seem odd to work out whether you qualify for a loan before applying for one. However, it is a good idea to check your credit score and the eligibility criteria for your chosen lenders before applying. If you are reasonably sure before you apply for a loan, you will not have any unpleasant surprises later on. This is important because if a bank or a lender refuses you a home loan, you may find it more difficult to apply to a different provider of loans, even with a reduced loan request.

When you apply for a home loan there will be credit and background checks made to ensure your viability as a loan candidate. You will need to be honest with yourself and to your loan provider. Ensure that you have all of the required documents before you apply.

3. Search for a provider of loans

This is bit difficult. There are so many loan providers and banks advertising their home loans and interest rates but it is hard to find out which is the best for you and the home loan you require. When the banks and lenders advertise their interest rates and fees, they always emphasize the minimum rate. This is a marketing ploy and that low rate, may not apply to you, your loan or even to the location of your (proposed) property.

Do your research and find out which has the best interest rate for you. You don’t need to make an application to ask questions of the loan brokers and the interest of customer service. They will be happy to help you with your inquiries.

Find out the types of home loan they provide. Is there an option to take a break for a month if unexpected circumstances occur? Can you be flexible in your repayment schedule if you have the resources to pay extra? You will also need to find out what their repayment terms are and whether you are eligible.

4. Have the courage to negotiate

The banks and providers of loans in the Philippines want your business and they are willing to be competitive to do so.  The low interest rate that so many lenders advertise is rarely the one that will apply to your loan. However, lenders have a certain amount of leeway to ensure they secure your business and if you negotiate well, you are more likely to get closer to that low rate than anyone who doesn’t. There is no guarantee of being able to negotiate but the axiom is “If you don’t ask, you don’t get.”

5. Be aware of any fees

When you decide to take on a home loan you need to pay the upfront fee for an appraisal of the property you wish to buy. The lender will refund this fee on completion of the loan agreement.  You should also have the down payment for the property you wish to buy. Other than this, there shouldn’t be any unexplained fees.

6. Make sure you have insurance

What would happen if you were unable to make your monthly repayments? What would happen if you were to die before you have paid the loan in full?  These aren’t happy questions, but you need to ask those questions because you can’t predict the future. You or your family could be in danger of losing the home you are buying now.

Most banks and providers of loans in the Philippines operate with an insurance agency to provide either MRI (Mortgage Redemption Insurance), PMI (Private Mortgage Insurance) or PPI (Payment Protection Insurance) policies to ensure against situations such as unexpected unemployment, terminal illness and death.

7. Understand everything and keep asking questions

If there is any part of the home loan agreement that you don’t understand, keep asking questions until you understand. Taking out a home loan is a huge commitment that will have an effect on your finances any time from ten to thirty years. Don’t let the experience overwhelm you and don’t allow impatient loan officers to bully you into committing to the agreement before you are completely happy with your understanding of every aspect.

The process of buying a new home and procuring the finance to do it is very stressful. However, if you get as much information as you can before applying for the loan, you will be much better prepared for what you need to do when dealing with the loan companies.  If you are fully prepared, you can spend more time enjoying your new home. What are you waiting for? Find a home loan provider and your own place now.

Kash Martinez, understands the intrinsic attributes of making excellent content that suits the needs of every business especially when it comes online financing. She can conceptualize and implement marketing plans, explores profitable B2B opportunities and then absorb Loan Solutions PH services.