The Basics of Bank Loans: What Are the Chief Requirements For A Home Loan in the Philippines?

Getting a house is one of the accomplishments that most Filipinos want to achieve. Having a place provides a sense of fulfillment, independence, and success. While some have no problem getting their own homes, many need financial assistance. Data from the Bangko Sentral ng Pilipinas (BSP), or Central Bank of the Philippines, shows that the demand for real estate loans has been growing at least 20 percent per year [1]. A prospective borrower should know the home loan requirements when buying a house.

This article lists the primary documents and house loan requirements, but since banks have their packages, the best course of action is for the borrower to contact the bank and get further details.

First and foremost, some of the central banks in the Philippines that offer housing loans are [2]:

Land Bank also offers a house loan, but its home loan requirements are much different than the others. Meanwhile, some banks, like the Development Bank of the Philippines (DBP), do not offer bank loans.

Any prospective borrowers should possess the primary home loan requirements in terms of age, employment status, level of income, and citizenship.

A borrower should be at least 21 years old and not exceed 65. However, the age limits may vary depending on the bank. According to Lamudi, several banks, such as Union Bank, give favorable consideration to borrowers up to 70 years old for bank loans. Meanwhile, Sterling Bank of Asia only allows borrowers up to 60 years old, but those who are older can still apply with a co-maker.

Potential borrowers should be employed for at least two years for employment status. Self-employed or business owners are obliged to submit home loan requirements, and they might be asked to include paperwork including their taxes, profits, income, business permits, and other documents.

For income, the borrower’s monthly income should be specified so that the loaning institution can make sure that the borrower can afford or pay for the bank loans. To apply for a house loan, the banks often look at the household’s gross monthly income, but it depends on some checking the individual earnings. For example, a minimum monthly gross income of PhP50,000 is required in China Bank if you live in Metro Cebu or Metro Manila. Those living outside the two mentioned cities must have at least PhP30,000. PhP30,000 is Metrobank’s required minimum monthly income, but the borrower’s location is not a factor.

As for citizenship, it varies per bank, but generally, all Filipinos are eligible to apply for bank loans. Meanwhile, foreigners and Filipinos who are no longer citizens of the Philippines can still borrow, but they have to see which banks cater to them. Some of these banks are RCBC, BDO, BPI, and Metrobank.

More documents can affect how fast one’s house loan can get approved. Some home loan requirements may vary from bank to bank, but some papers should be prepared upon application.

For one, all banks would require filled-out application forms and two government-issued IDs if they want to apply for house loans. If the borrower is married, he or she might be asked to include a copy of his or her marriage contract and the spouse’s signature. This depends on the bank, and some of those that practice this are BDO, BPI, PNB, Union bank, and China Bank.

Maybank’s home loan requirements for borrowers are to file their certificate of employment (COE) and the income tax return of their spouse or a death certificate if the borrower is a widower. There are some cases in applying for bank loans when separate documents are required to be submitted if there are two co-signers.

Other items that can be used for verifying income may include the following:

For documents that pertain to purchased property, the banks might ask for a Transfer Certificate of Title (TCT), property tax declaration, Condominium Certificate of Title (CCT), and others [3].

See Yoorekka Magazine for more housing loan tips and guides in the Philippines!