Admit it―you feel a twinge of envy whenever you see a random person’s reel where they do their weekend house-cleaning rituals, languish on their beds or couches during rainstorms, or decorate their aesthetically appealing space. And then you start to wonder when you’ll be able to move out of the family home and finally get your own place.
You may be thinking that it will remain a pipe dream. After all, getting your own place, buying your own furniture and appliances, and paying your own bills is a major (and expensive!) undertaking. Still, it doesn’t mean that it will never happen. It may take a while. But if you plan for it, and you stick to the plan, you’ll soon be a proud homeowner, too!
The most important thing that you need to secure is a home loan, of course (unless you can pay for your future house in cash). To help you get approved for a home loan, make sure to do the following.
- Fix Your Credit Score
A bad credit score is one of the top reasons banks or lenders reject a home loan application. So how do you know if you have a bad credit score? You can request for your credit report from accredited credit bureaus in the Philippines, or you can assess yourself based on your missed payments for loans or credit cards. A canceled credit card is definitely a negative hit on your credit score. Same with a personal loan that you never fully paid off.
So before you apply for a home loan, do something to fix and clean up your negative credit history. Settle all your unpaid dues. Once you’re fully paid, secure a bank clearance as proof that you’ve cleared your debts.
- Reduce Your Debts
Aside from your credit score, banks also look at your debt-to-income ratio, which ideally shouldn’t be more than 36% of your gross monthly income. The fewer your debts, the better. If you have too many loans or credit card debts, that leaves you with too little to pay for your monthly amortizations. So pay down your debts to lower your debt-to-income ratio and make you more qualified for a home loan. This includes not making any big new purchases on your credit card or being a co-borrower of a friend’s loan.
- Be More Financially Stable
Having a stable and permanent job when you’re applying for a home loan is also crucial. Banks look at your capacity to make the loan repayments for the next, say, 10 to 25 years. If you keep on changing employers or if you’ve only started with your new company, you may want to wait until you’re more stable in your job before you send in your home loan application.
- Boost Your Savings
You can borrow anywhere from 80% to 90% of the appraised value of the property. The remaining 10% to 20% will have to come out of pocket. This is why it’s important to have a significant amount of savings to help you pay for other expenses that go with home buying, such as down payment and miscellaneous fees.
- Determine Your Financial Capacity and Your Budget
Pick a house, condo unit, or apartment that will be right for your budget. Be smart and practical about it, and keep it within your means. For example, you really don’t need a 3-bedroom unit if you’re going to be living solo. Also, don’t forget to factor in all your monthly expenses, like utilities, groceries, transportation, insurance, and more. These things will still need to be paid every month on top of your rental fees or monthly amortizations.
- Check Home Loan Calculators Online
If you really want to know how much you’ll pay for your home loan, you can try home loan calculators online. RCBC has an online home loan calculator where you can compute your monthly payment based on the selling price, down payment, fixing option, and loan period.
Simply choose your loan type (low monthly amortization or with insurance coverage for the entire loan term?) and your loan purpose (house and lot acquisition, home refinancing, or home renovation etc.). This should give you an idea if your finances can handle your home loan payments.
- Get Pre-Approved
If the figures from the online home loan calculator look promising, you can try to get pre-approved. A home loan pre-approval means that banks or lenders have looked at your financial background and determined how much you can afford for a home loan.
Getting pre-approved can save you valuable time because you can target your home search to your price level. You won’t get attached to a house you can’t afford, and there’ll be no unpleasant surprises or delays because of your credit score when it’s time to apply for a home loan.
- Choose the Right Home Loan
There are many banks you can go to for a home loan. But make sure not to send multiple home loan applications. Doing so can impact your creditworthiness and make you look credit-hungry.
Instead, compare banks and lenders. Choose by considering your pre-approved loan quotation, if any, and looking at its interest rate, the maximum amount you can borrow, processing fees, and other loan charges.
You can apply for an RCBC home loan if you’re at least 21 years old, with an employment tenure of at least a year, or running a profitable business for the past two years. The minimum gross monthly income requirement for employed applicants is ₱40,000.
You can even apply for an RCBC Home Loan online. Get a home loan starting from
₱300,000, and start your RCBC Home Loan application with just a few clicks and by answering a few questions.
If you’re not yet ready for your dream house purchase but still want to move out, you can rent a small apartment, townhouse, or studio unit. What’s important is to experience adulting in a way that will not be overwhelming to you. So take it slow, and do it one step at a time.
If you need a financial boost to pay for the deposit and the advance, as well as to purchase the things you’ll need for your rental, consider getting a personal loan. An RCBC Personal Loan can help you fund your move ASAP and pay low monthly amortizations for up to 36 months.
Make that big move or that dream home happen this year. Call the RCBC hotline at +632-8877-7222, visit the RCBC website, or drop by an RCBC branch for more information.
