Published: January 22, 2021 | Updated: February 9, 2021 | Posted by: Moneymax | Loans
For many of us, buying a home is a milestone. Primarily, this is because a real estate property is a major purchase you would probably need to work for. Secondly, just fulfilling all the requirements and going through the loan process are already accomplishments.
If you’re planning to buy a home (whether it’s your first time or not), looking for a financing company is a top priority. You will need to look for one that is not just reliable but also flexible. In this regard, the Bank of the Philippine Islands (BPI) definitely fits the bill, as they offer the BPI Housing Loan, one of the most competitive loans in the market.
Let this guide give you a walkthrough on the important things about this home loan.
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The bank describes the BPI Housing Loan (or BPI Family Housing Loan) as an ideal loan option for earners who have conservative buying patterns. This is mainly because their package can be customized based on the needs and spending power of the client.
The BPI Housing Loan can be used in two ways. When you use it as a Housing Loan, you can buy a vacant lot, a townhouse, or a residential condominium. But if you use it as a Property Equity Loan, the proceeds can be used for any purpose other than purchasing a real estate property. You can use it to fund your business or refinance an existing loan. In this arrangement, though, your property will be the collateral.
Yes, as long as you are of legal age or will not be more than 65 years old upon the maturity of the loan. You can apply for the BPI Family Housing loan given that you’re a:
Read more: Should I Borrow Money from Private Lenders?
With BPI Housing Loan, the minimum borrowing amount is PHP 400,000. You may also borrow a maximum of 70% of appraised value of house and lot.
For vacant lots or residential condominiums, you can borrow a maximum of 60% of the property’s appraised value.
In some cases, you may borrow up to 80% of appraised value of house and lot whose value does not exceed PHP 5M. For this case, the applicant must be employed and should use the property for occupancy.
To qualify for the loan, the minimum total household income should be PHP 40,000.
The loan terms for the BPI Housing Loan are divided into two categories:
Because the BPI Housing Loan can be either used as a Housing Loan or a Property Equity Loan, the bank has two interest rate categories:
|Fixing Period (Years)||Housing Loan Interest Rates||Property Equity Loan Interest Rates|
According to the bank, the rates above are for new BPI Housing Loan applications. However, repriced interest rates will be applicable to existing borrowers.
Among the major fees that you will need to cover is the Mortgage Redemption Insurance or MRI. If this is a new concept for you, it is a form of life insurance that will cover a part or the entirety of the mortgage balance in case the borrower passes away or becomes disabled. Note that it is already standard among banks to offer this to clients applying for a housing loan. BPI also refers to MRI as Group Financial Security Plan or GFSP.
The coverage of your MRI must be equal to the value of your loan. The fee, on the other hand, will largely depend on your loan amount, age, term, and other factors. Don’t stress yourself too much about this part, as a BPI account officer will discuss this with you when you apply with them.
In case you’re getting a secured loan, the property that you will use as a collateral will need to be appraised by professionals. For this service, BPI charges PHP 5,000.
Of course, you should also take into account other miscellaneous fees, such as documentary fees and penalties. For the latter, it may cost 3% of the monthly amortization or of short payment, whichever is applicable. You can always ask the BPI loan officer in charge with your application about the other expenses you need to cover.
For a speedy loan process, make sure that you submit the needed requirements. You may get a reply from BPI within five (5) working days as long as you have submitted the complete loan documents.
Here’s a list of BPI housing loan requirements and documents that you need to fill out and collate.
If you’re planning to apply for a property equity loan where a collateral is needed, you will need to submit the following:
If a foreigner is married to a Filipino citizen, the purchase of a vacant lot or house and lot will be considered. Keep in mind that the property bought will be under the names of the foreigner and his/her Filipino spouse. The two must be also living or working here in the country for the last two years.
Always remember that a home loan is a commitment that will require not just your money, but also your time and effort. You cannot afford to falter, as penalties may accumulate, and you may even find it hard to recover.
To help you gauge your capacity for this loan, we recommend that you use BPI’s loan calculator. But note that the amount that you will get is just an estimate, as you need to factor in other expenses, such as miscellaneous fees and insurance contributions.
Planning to transfer your existing loan from PAG-IBIG to this BPI? It’s possible, but you just have to make sure that PAG-IBIG will honor BPI’s guaranty.
|Personal Loan Provider||Features|
|Citibank Personal Loan|
|EasyRFC Multi-Purpose Loan|
|SB Finance Personal Loan|
|TALA Personal Loan|
Other loans to consider:
Getting your application approved is the main goal, so make sure that you know what the loan officers are looking for (other than the application forms, of course!). First, you need to have a steady and stable source of income. Banks and lending institutions consider applicants with no stable jobs as red flags. A few years’ employment at a company should help you improve your chances. But keep in mind that some banks may require a specific minimum amount of income.
Many experienced home buyers and even some loan officers advise that you save up a large sum of money that you can use as a down payment. The objective here is to lower the amount of money that you will borrow – the lower the money you borrow, the higher the chances your application will be approved. Furthermore, a large down payment may be actually perceived as a reflection of your good financial management skills. Showing this quality to your lender will help you gain their trust.
You will also need to show your lender that you are a trustworthy and a financially responsible person; you can prove this by showing your credit history, which details how you deal with your debts and bills. To improve your score, you must pay your debts and bills on time and never miss a deadline.
Learn more about housing loans in the Philippines: Everything You Need to Know About Housing Loans in the Philippines
Buying a home can be challenging, but know that there are always financial institutions that can help you out – in this case, it might be BPI.
Before you pick a lending institution, it’s your obligation to do your due diligence. You are not supposed to just pick affordable rates. You also need to weigh a loan package’s pros and cons and consider things from a different perspective (i.e. by asking experienced home buyers).
Always make an informed decision by reading valuable financial literacy resources, such as Moneymax. Stay tuned for more tips and practical advice.
With a goal to help Filipinos lead healthier financial lives, Moneymax regularly publishes tips and tricks on personal finance and lifestyle, among many other topics. For more finance-related news and articles, follow Moneymax on Linkedin.