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1. BDO's useful insightson home loan's
Loans, whenput to good use, canprovide the commonFilipinothe leverage to a wide range of investments, from small
purchasesto the big-ticket items like cars or houses.
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When investedrecklesslyandirresponsiblyhowever, loans are oftenreducedto mere horror storiesthat talk of ballooning
interests, absurd service fees and other hiddenchargesthat canreadilyput anindividual deepinto debt.
It is thus criticalfor anindividual to first have a clear grasp ofwhat a loanis, the different types that willsuit varying needs and
concerns, andhow you can make the most out of these facilities, especiallyifyou are planning to go for bigger purchases like a
house and lot.
Housing loans, inparticular, will require knowing andunderstandingthe risks andhuge responsibilities that come withavailing
these facilities, since the amounts involvedare usuallyhuge.
To prepare youfor anypotentialloanuptake, either soonor inthe future, Dang Manulat, senior vice president andheadfor the
consumer lendinggroup-home loanbusiness of BDO Unibank, has providedInquirer readers useful insights on some of the
frequentlyaskedquestions concerning housing loans. These insights can serve as a guide in helpingyou decide whichl oanbest
suits your need.
1 What is a home loan? Home loanis a financingfacilitysecured bya real estate where funds can be used for the followingloan
purposes:purchase of vacant lot;purchase of houseand lot;purchase of townhouse unit;purchase of condominium unit;
house construction;refinancing/take out;house renovation/home improvement;and reimbursement of acquisition cost.
BDO Home Loan, accordingto Manulat, offers anall-infinancingoption, a separate financing arrangement, whichyou canavail
to finance everything that you need at all stagesof owning a home. The all-infinancing optioncovers incidental expenses such
as transfer cost, title registrationfee and insurance premium.
2 Who are eligible to apply? BDO considers as eligible to applyfor a home loanemployed individualswith regular status and
have stayedwith current companyfor at least two years;self-employedindividuals whose businesses have beenoperating for
the last two years;Filipinos or Filipinos withdual citizenship;individuals whoare 21 years old, but not exceeding 65 years old
upon loanmaturity;individuals whohave a minimumgrossfamilyincome of P50,000 per month;and those withnoadverse
finding basedon bank’s guidelines.
3 How is this eligibilitydetermined? At BDO, eligibilityis usuallydeterminedor measured mainlyinthree areas.
One, BDO looks intothe individual’s capacityto repaythe loan. Aside fromrequiringa minimumfamilyincome, banking
institutions usuallyensure that the totalamortization of anindividual must not exceed40 percent ofthe gross monthlyincome.

2. Also beinglookedat is the character of the borrower, whichusuallycenters onhis or her willingness to paythe loan. To assess
this, BDO checks onthe client’s payment historyor handling of past andexistingloans. Ifallloans have beensatisfactorily
handled, it creates a positive impressionthat the client is a responsible borrower andhas thus less riskfor default.
Anybad loan recordwill meanwhile serve as a redflag for the bank.
Another consideration is that the propertyfor mortgage must be residentialandwithinthe serviceable area of BDO. It must
carrya clean title or not currentlymortgaged withother bankor financial institutionuponloanapplication.
4 How does one applyfor it? Luckily, the healthycompetition among different financial institutions has easedthe process of
applyingfor a home loan.
In BDO’s case, depositors andwalk-inclients mayapplyandsubmit their loan applicationinthe banks more than730 branches
nationwide; or upon completion ofdownpayment requirements, buyers ofaccreditedreal estate developers canapplyfor BDO
Home Loan throughtheir developers.
“Clients maybuyfrom inventoryof propertiessoldbyaccredited brokers or salesagents. The accreditedbroker or salesagent
will assist them in filingthe loanwithBDO throughtheir designatedHome Loanaccount officer,” Manulat explained.
Other applicants mayalso send online application via www.bdo.com.phandanaccount officer will respond withinthree
banking days.
5 What are the requirements? When applying for a BDO Home Loan, make sure you alreadyhave these basic requirements:
completelyfilled-out and signedhome loan application form;photocopyof one validgovernment-issuedIDwith photo and
signature;andmarriage contract if applicable.
Additional requirements, however, maybe requested dependingon source of income andloanpurpose.
6 How long does it take to processa loan?For BDO, it takes five banking days to processthe loanuponreceipt of complete
applicationdocuments. Once approved, the client will be requestedto sign the loan documents andsubmit a copyof original
collateraldocuments such as Transfer Certificate ofTitle (TCT), Real Estate Tax Receipt (RETR), Tax Declarationof Landand
Improvement (if any).
Borrowers will have to wait for another 10 bankingdays after these additional documents are submitted for the releaseof loan.
7 Is there a maximum or minimum amount one can borrow? Whoor what determines the amount of loan that canbe granted?
The loanable amount is determinedthroughthe value of the propertyto be mortgagedandthe borrower’s capacityto pay.
Currently, BDO offers a minimumloanamount of P500,000 while the maximum amount cango as high as 70 percent of the
appraisedvalue of the propertyto be mortgaged, provided that the total monthlyamortizationwillnot exceed40 percent of
the gross familymonthlyincome.
8 What is the range of interest rates offeredbyBDO?According to Manulat, interest rates range from 7.75 percent to 11.50
percent annuallythat can be fixedfrom one year to upto 20 years, respectively. BDO gives the borrower the optionto choose
for the fixingperiod, after which, yearlyrepricing will be appliedbasedon prevailing market rate.
9 How does one payfor the acquiredloan?A client starts paying hisor her loanafter 30 days from date of the loanrelease.
Amortization is usuallypaidmonthlyvia automatic debit arrangement (ADA) against borrower’s BDO current or savings
account.
10 What are the benefits ofacquiringloans fromreputable institutions like BDO? At the moment, BDO provides clients
competitive interest withfixed-rate options andflexible payment terms plus a guarantee of fast loan processing. And as an
added perk, clients withapprovedhome loans can avail ofa free home insurance.

3. “This automaticallyentitles you to insurance coverage fromfire and lightning, typhoon, flood, earthquake and robberyand
burglary,” Manulat concluded