acquiriNG PROPERTY thru bank financing

Bank Financing is a main financing option to owning a property other than in-house or CASH payments. It will be a long-term commitment as most terms are from 5-15 years at least in the Philippines.

There are also a standard bank requirements for borrowers to comply with to commence application and get into an approval. 

What is a Housing Loan?
In layman’s term, a home loan is simply borrowing money with interest for a specific period of time to purchase or to renovate a house. In case of non-payment or default, the bank can liquidate the property and get back its used loan amount.

It is also defined as a debt you incur when you want to acquire house thru bank financing. You have to pay the amount borrowed with a definite amount regularly for a definite period of time, in addition the bank charge you with interest which also varies in respect to the time you want to pay back the lender. In the Philippines, home loan is available thru list of banks, developers, Pag-IBIG Fund. Interest rates varies from these lenders, we’ll cover it later in this post.

Personal Financial Assessment.
The first thing you need to addressed as a home buyer is your capability to pay back the loan you are planning to ask with the lender. As banks today has a lot of eligibility requirement for borrowers. As sure as it is, what these lenders’ number one question to you is how much is your gross family income. The minimum gross family income requirement differs from one bank to another. Below is the chart of minimum requirement for major banking institution in the Philippines. You also have to consider how much will be left in your pocket once the bank get it’s required monthly amortization. 

Minimum Gross Family Income
MetroBank & PNB
30,000.00

BPI
40,000.00

BDO, Security Bank, Chinabank
50,000.00

RCBC, Unionbank
Depends on the amount of loan

The application and approval process. Banks differ in processing loans, however it all boils down to these 4 steps.
Application. This is the stage where all the needed documents are submitted. You also need to fill up the bank’s application form where the terms and conditions of the loan are stated.
Processing or Pre-qualification. When you have submitted all the required documents which includes all bank application form, employment information, latest Income Tax Return (ITR), bank statements, bank will start to check if you are qualified to avail the loan. Expect a call from the bank representative checking your financial capacity, they will ask questions about your assets, current monthly dues or liabilities and of course your monthly income and its source. The bank will also check the capacity to pay of your co-maker, so make sure to have a co-maker who will be able to pass the banks approval process.  The approval process will conclude if you’ll be able to pay the monthly amortization of the housing loan.
Annotation. If the loan is approved, the bank again will call to inform that your loan application is accepted. Also, bank will usually ask you to sign the Bank Loan Covenant which simply states them as the lender and you as the borrower to fully pay back the loan amount in time.
Releasing. Congratulations, the bank will release the loan you have applied.

List of Requirements for Bank Housing Loan.
When you already assessed that you are financially capable of applying for a home loan, the next to prepare are the documents needed for application. You need to provide everything the bank requires you to submit, the loan account officer will use all the documents to prove you’re eligible to the loan you’re applying to. If the requirements are met, you will be contacted immediately for further instructions and loans can be approved in as fast as 5 bank working days.

Here is a list of major bank housing loan requirements:

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Metrobank
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Identification
Locally Employed/OFW/in Business – Government issued ID, Passport, ACR if Foreigner
Corporation/Partnership – SEC Registration, General Information Sheet
Source of Repayment
Locally Employed – Income Tax Return, Certificate of Employment, 3 months payslips
OFW – Land-based:COE with email of employer, Sea-based: Latest POEA contract
in Business – 6 months bank statement with BOO, Certification of No Overdraft Charges
Corporation/Partnership – 2 years AFS & ITR, 6 months bank statement with BOO, Certification of No Overdraft Charges
Collateral Requirement – Transfer Certificate of Title / Condominium Certificate of Title, Tax Declaration, Contract to Sell or Reservation Agreement (if under developer tie-up only), House Plans / Bill of Materials / Specifications (for house construction only.

PNB
REQUIRED AT ALL TIMES
HOUSING LOAN APPLICATION FORM (duly accomplished)
Photocopy of 2 valid government issued ID’s
Appraisal Fee of P3,500 – non-refundable
If with co-maker/co-borrower/attorney-in-fact, separate application form is needed
IF EMPLOYED:
Income Documents
Photocopy of the latest Income Tax Return (ITR)
Certificate of Employment and Compensation
Alien Certificate of Registration (ACR) and Official Receipt (if resident alien)
Overseas Filipino Worker
Photocopy of Passport
Contract / Certificate of Employment (COE) approved by the POEA, if applicable, authenticated by the Philippine Consulate (if direct hired)
Proof of inward remittance thru PNB or other banks
Crew Contract and Exit Pass from POEA (for seafarers only)
PNB-prescribed Special Power of Attorney (SPA), if applicable
If SPA was executed and notarized abroad, such has to be authenticated by the Philippine Consulate

​USA & US TERRITORY:
The certificate of employment & salary should be authenticated by the Phil. Consulate
Loan applicant to fill-out the Bank’s Credit Information Authority and pay $50.00 for the Experian Report in PNB-Los Angeles Desk Office located at #3345 Wilshire Boulevard, Suite 200, Los Angeles, California 90010, USA
Contact Nos.: 323-802-8001
Telex No.: 6502253656
Fax No.: 213-401-1803
Contact Person: Rowena Tabuzo

BPI 

Housing Loan Application Form
Duly accomplished Application Form
2 valid Identification Cards
If married, both spouses to sign on the application form
If with co-borrower or co-mortgagor, separate application form is needed

Income Documents
If Expat Pinoy (Overseas Filipino Worker)
Contract / Certificate of Employment (COE) authenticated by Philippine Consulate
Crew Contract and Exit Pass validated by POEA (seaman)
Proof of monthly remittances
Notarized or authenticated Special Power of Attorney (BPI FSB Format) 

​Collateral Documents
Clear copy of Owner’s Duplicate Copy of TCT/CCT
Lot Plan with Location/Vicinity Map certified by licensed 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) 

BDO

Eligibility Requirements
Filipino citizen or foreigner (see Visa requirements)
At least 21 years old but not exceeding 65 years old upon loan maturity
Minimum gross family income of P50,000.00/month.
Stable source of income from employment or business
If employed, at least 2 years with current company
If self-employed, at least 2 consecutive successful and profitable years of operation.
Document Requirements
Basic Documents
Signed BDO application form
Clear copy of 1 valid ID matching application details
Marriage Contract, if applicable
For foreigners, photocopy of Alien Certificate of Registration (ACR) showing Visa status as permanent immigrant or Alient Employment Permit (AEP) or Visa ID
Income Documents
If employed abroad (or Asenso Kabayan borrowers)
Latest 3 months proof of remittance, or
Latest 3 months payslip, or
Certificate of Employment or Employment Contract duly autheticated by Philippine Consulate Office, or
For seamen, latest Crew Contract and employment history or Crew Contract and Exit Pass from POEA
Types of Acceptable Visa for Foreigners
Quota or Non-Quota Immigrant Visa:
Alien spouse of a Filipino citizen (Sec 13A Visa)
–  Natural-born Filipinos married to an Alien (Sec 13D Visa)
–  Returning Resident (Section 13E Visa)
–  Natural-born Filipinos naturalized in foreign country (Sec 13G Visa)
Photocopy of Special Retiree’s Resident Visa (SRRV) or Quota/Preference Immigrant Visa
Permanent Resident Status and working Visa granted by Subic Bay Metropolitan Authority (SBMA)
Working Visa issued to Embassy Officials
Collateral Documents
Photocopy of TCT / CCT
Lot Plan with Vicinity Map certified by a Geodetic Engineer
Master Deed of Declaration of Restrictions (for condominiums)

SECURITY BANK

Required Documents:
Home Loan Online Application Form
List of Required Documents
Special Power of Attorney (SPA)
For OFW Borrowers:
Completely filled out and signed application form
Clear copy of one valid ID (photo-bearing government issued) of borrower/spouse/co-borrower/ signatories of the loan
Any ONE of the following income documents:
Certificate of Employment with compensation (issued within the last 6 months)
Latest Crew Contract (for seafarer/seaman)
Latest Employment Contract (for land-based OFWs)
Allotment Slip
Latest 3 months payslip; OR bank statement for past 3 months
Note: For OFWs hired directly abroad, any TWO income documents are required
Consularized Special Power of Attorney is needed if with attorney in fact
Mortgage Redemption Insurance (MRI) Application Form
Relevant collateral documents (Section E)
Collateral Document Requirements
Copy of collateral title (TCT/CTC)
Copy of Tax Declaration on land and/or improvement
Signed Authority to Inspect and Verify (bank form)
Appraisal Fee paid to SBC: OR Number ______________________________
Acquisition from Accredited Developer
Contract to Sell; or Reservation Agreement

UNION BANK

BORROWER ELIGIBILITY
Filipino, of legal age but not more than 65 years old upon loan maturity
With steady, dependable & verifiable source of income
Employed for at least 3 years in a supervisory/managerial position with a reputable company (for employed individuals)
Minimum Gross Monthly Income (GMI):
P50,000/mo. for Metro Manila / Metro Cebu
P35,000/mo. for other provincial areas
Able to pay an Equal Monthly Amortization which is:
< 35% of GMI
< 75% of Net Disposable Income (NDI)
No adverse credit findings like court cases, bouncing checks, unpaid loans, cancelled credit cards, etc.
REQUIREMENTS FOR LOAN APPROVAL PROCESSING
Identification Papers (TIN, Community Tax Certificate, Passport, Company ID, Driver’s License)
Marriage Contract (if married)
Bio-data/Resume
Deposit Statements of Accounts (last 6 months)
EMPLOYED INDIVIDUALS
Latest Income Tax Return (ITR)/W-2 Form
Certificate of Employment stating length of service and monthly compensation package
SELF-EMPLOYED INDIVIDUALS
Audited Financial Statements and ITR for the last 3 years (BIR stamped)
Certificate of Registration of Business Name
Business Profile
Complete list of suppliers and clients
COLLATERAL REQUIREMENTS
Transfer Certificate of Title
Current Tax Declaration
Current Tax Receipts
Current Tax Clearance
Location Plan
BANK FORM
Loan Application
Mortgage Redemption Insurance (MRI) Application
FOR OFWs*
Certificate of Employment stating length of service and monthly compensation package
POEA Contract
ITR (if any)
Payslips (last 6 months)
Special Power of Attorney (Bank Form)
* All documents have to be authenticated by the Philippine Embassy/Consul if issued abroad
INSURANCES AND FEES REQUIRED
P3,500 Filing Fee (non-refundable)
Processing Fee
Mortgage Registration Expenses
Documentary Stamp Tax
Mortgage Redemption Insurance (MRI) Premium
Fire/Earthquake Insurance Premium

RCBC
Accomplished RCBC Home Loan Application Form
Copy of TCT and Tax Declaration (Land & Improvement)
Bill of Materials (Construction)
For Employed applicants: Certificate of Employment  (COE) or latest ITR, 2 valid government-issued IDs, TIN, Utility bill
For Self-employed applicants: Business Registration with DTI, Audited Financial Statements, ITR or bank statements