Acquiring a home loan is not easy, especially when it’s your first time applying for one. You are likely to make a mistake when you apply for a mortgage for the first time and this is understandable. The excitement that comes along with buying a property usually gets in your head, resulting in clouded judgment and poor decisions.
To get approved for a mortgage, you have to be informed. Here are some common mistakes that first time homeowners make when applying for a mortgage, and how you can avoid them.
Not knowing your budget
We all dream of having a house surrounded by a picket fence, located at the most prestigious address in the country. Unfortunately, not everyone can afford this type of property. Aiming for an expensive property when your savings can’t handle it will only get your application denied. Always look for properties that match what your current bank account can afford.
Having a bad credit score
Credit scores are vital in getting any type of loan. A good credit history shows an applicant is responsible with his or her finances and is capable of paying the mortgage. Increase your credit score first before applying for a mortgage.
Not comparing loans
There are tons of loan options available on the market today. There are three options that a Filipino home buyer should consider: a Pag-IBIG loan, a bank home loan and in-house financing. Try to shop around and compare each option. The Pag-IBIG fund is perfect for Filipinos with modest incomes. Bank home loans offer low interest but come with a tedious application process. Meanwhile, some developers offer in house financing that’s easy to apply for but has a high interest rate.
Incomplete documents
Before applying, make sure that you already have all the documents the lender requires. Lenders, both private and government, have their own application forms that you have to fill out. Documents such as government issued IDs (i.e. passport, driver’s license, Unified Multi-Purpose ID), proof of employment, income tax returns, and pay slips will be needed. The more cooperative and responsive you are with your lender, the better chance you have of getting approved for your mortgage.
