Wednesday, June 18, 2014

4 steps to a successful home loan

If you're tired of renting and want a home of your own, you might need to take out a loan. You’ll be spoiled for choice with the selection of apartments and homes around Metro Manila and the rest of the Philippines, and banks have a wide range of special loan offers to get you your dream home. 

Even with a pending loan, be safe and have an emergency fund on the side. Set aside at least P50 000 in cash just in case the bank asks for additional paperwork or prolongs their background check.

Consider these four steps to help you  get a home loan... 

1. Settle outstanding credit

Pay off as much as you can of your credit card bill and pay it on time. This will not only improve your credit score but it will make you look good for the banks, and may even get you a lower interest rate. 

2. Gather required paperwork

Almost every bank will require paperwork such as proof of income, an ITR and documentation from the property. At least prepare the proof of income and the ITR, and then ask which forms can be submitted to the bank later, anywhere from a few days to a few weeks after submitting your application. 

3. Keep funds in reserve

Even with a pending loan, be safe and have an emergency fund on the side. Set aside at least P50 000 in cash just in case the bank asks for additional paperwork or prolongs their background check. This at least settles expenses such as housing and construction costs, or pays off any interest incurred from payment delay. 

4. Make a schedule

It's advisable to do the initial work for the bank loan first, and then file for the property you wish to acquire. Ask the bank how long it would take for your loan to be approved, and follow up often. Based on the average time the bank gives you, talk to your broker and ask for options in case the loan gets delayed.  


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