Bank Financing in the Philippines

Are you planning to avail of properties through bank financing?
Let us see if bank financing is the best option for you.

Bank financing is a financing option to avail of property, even cars and personal loans. At bank financing, or banks, has the strictest process on loan approval of it's clients, many documents to submit, certain income will be required along with some collateral.

Basic Requirements
Certificate of Employment and Compensation (for local)
Job Contract (for OFW)
Photocopy of 3 months bank statements
Photocopy of latest 3 months payslip
Latest Income Tax Return
2 valid (Gov't) Identification - photocopy and with 3 signatures
Proof of Billing
4 pcs 1x1 pictures

Additional Requirements

Special Power of Atty. for OFW (Bank Form and Developer Form)
Joint and Solidary Undertaking (JSU) for co-borrrowers
Filled out Housing Loan Application
Clearance from Credit Company
Photocopy of Passport
Photocopy of Seaman Book

If you are going to avail at a developer, you need to pay the Down Payment(DP) which mostly 20% of the Total Price. Some are offering 10% down payment or 30% down payment.

The lower the down payment at bank financing means a high appraisal of the property you are going to avail but a usual rate in the Philippines is 20% DP.

For example:

Total Price is Php. 2 Million less required 20% DP is Php.400,000 = Loanable Amount is Php. 1.6 Million

At above example, your Loanable Amount at bank financing is Php. 1,6 Million, you may now compute for your Monthly Amortization with the table below.

Sample Computation: Suppose an 8% interest rate and you want to avail at 5 years.

MA = LA x  (Factor Rate of 5 Yrs at 8%)
MA = 1,600,000 Million x .0202763943
MA = 32,442 per month           
where: MA is Monthly Amortization,  LA is Loanable Amount

For Net Disposable Income (NDI) Requirement
NDI = MA / 30%
NDI = 32,442 / .30
NDI = 108,140 Income per month




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About the Author

Jerome Morada

Realtor & Webmaster

Good day! I'm Jerome, your friendly Real Estate Broker with PRC License 0012399 and HLURB registration. Just sharing simple tips, please share if you find it useful! Thanks!

2 (mga) puna:

  1. What Banks are offering 5% Down for Homes?

    ReplyDelete
  2. Thanks for dropping Jeffrey! Here in the Philippines, some banks are offering 5% DP and 95% loanable to economic housing projects.

    ReplyDelete

 
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