Almost everyone dreams of having a place they would call home. Unfotunately a lot of people has fallen to debt ruining their creit standing. That being said it would be difficult to get bank loan for a new home if you have a bad credit standing. So the question now is can you get a new home with bad credit standing in the Philippines?
Before I answer that question I’ll explain what a credit standing is. Basically it measures a borrower’s capability to pay debts. Missing payments on your bills, especially credit card and bank loans would have a negative impact on your credit standing. Hence It would be difficult for someone to get a bank loan or get a credit card application approve. Now you may be asking why is this relevant. It is simple. Having a bad credit standing would lessen your chances of getting a housing loan approve.
Going back to our topic. Can you get a new home even with a bad credit standing in the Philippines? Yes you can that is if you are going to get a housing loan with Pagibig.
Alright so let me tell you my story. My wife and I dreamt of having a place that we would call home. But due to some bad decisions when we were younger with credit cards, we ended up having them all cut and all the money that I got for years of service in my previous company went to paying credit card bills.
As of today we don’t use credit cards, which is a bad decision by the way. Why? Instead of having them all cut we should kept at least 1 or 2 at least. It was difficult to get a credit card application approve after. The main reason why we had them all cut is the fear of not being able to manage the credit card and go back being in debt. But we missed out on the opportunity of getting a housing loan using a bank loan. You should know that home loan interest is higher compared to a pagibig loan. But having another option is a good thing.
So it took as while before getting our home for two reasons. First we did not have enough funds.to pay for the 10 to 20 percent down payment. Second was the fear of not getting our loan approved.
So after years of renting, we saw this very affordable houisng in Pampanga. We are not required to pay downpayment outright. But instead we got a sweet deal of paying the equity for two years which is roughly 5300 pesos per month.
When we first saw the house. We fell in love with it. We wanted to get the house instead of paying for rent. So what did we do? Off course we ask if get the house even if we had bad credit. The broker immediately ask us what was the issue about our credit standing. We had to be honest. We couldn’t risk paying yhe equity without being sure that the housing loan would be approve.
We had to rely on faith. Faith that somehow the housing loan would be approve despite our situation. So far two years we had to pay for the equity with fear that our housing loan would be denied in the end. I guess we had to take the word of broker when she said that if you have a job and have more than 24 months contribution, and the monthly salary is sufficient enough then it would be fine.
We started paying the equity in 2016 and two years after we had our loan approved and getting ready to move in.
So basically it wouldn’t hurt to try. But before you give your first payment you have to ask your broker about the approval process of the housing loan. How much should your monthly salary be to get approve.
I think one of the factors that got my pagibig housing loan approve is the lenght of my stay.with my current employment which is 7 years and going. My monthly salary would be second.
A word of caution, since the establishment of the Credit information corporation (CIC), the approval process might be different. CIC by the way is a state run entity that manages and stores credit information. Startimg 2016 CIC has been getting credit information from banks and other entities that store credit information.
Again ask your agent if there has been changes with Pagibig housing loan approval. Check your home loan eligibilty.
Share your thoughts.
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