Bank Financing 101 – Basic Documents for Locally Employed

Are you easily overwhelmed with paperwork? If you are the one tasked to take care of the loan application, we feel you. There are a lot of documents you need to prepare before getting that seemingly elusive bank loan. Fortunately, developers (such as Dolmar) and your realty agents are there to help you with some of the paperwork needed to secure said mortgage.

That said, here are some of the necessary pre-processing documents you may need to prepare in getting a home loan from banks:

Application form. All banks will require this from you. You get this form from the bank itself.

Valid Identification Cards. All banks will naturally require 2 valid IDs to confirm the borrower’s identity. They may sometimes even get a clear copy of a valid ID of the borrower’s spouse or any other signatories of the loan.

The following are the allowed IDs for any bank loan:

• Passport
• UMID (Unified Multi-Purpose ID Card
• TIN (Tax Identification Number) ID, if any
• Driver’s license
• PRC (Professional Regulation Commission) ID
• NBI (National Bureau of Investigation) clearance
• Voter’s ID
• Postal ID
• GSIS (Government Service Insurance System) e-Card (if you are a government official)
• SSS (Social Security System) ID
• Police Clearance (from your local government unit)
• Senior Citizen’s Card
• OWWA (Overseas Workers Welfare Administration) ID
• Seaman’s Book
• Company IDs

Income documents. For the locally employed, you will need:

• Your (or the borrower’s) latest ITR (or Income Tax Return, W2). Some banks may require you to present or give them a copy of the last 2 or 3 years of your ITR.
• Certificate of Employment – which you need to get from your current employer.
• Latest payslips – at least 3 months which should include your salary breakdown.

Collateral documents. While you may know and trust yourself, the same cannot be said about the bank you are borrowing from. Banks will only trust a borrower if they are assured that in any eventuality, the loan can be paid in one way or the other. Enter the borrower’s collateral which is usually an asset or a property owned by the borrower. This collateral should be of either the same or exceeding value as the amount which remains on the loan. Properties of value could be in the form of a second land or house titles, or your current home. For a home loan, the collateral is the house you are buying.

Documents of this type come in the form – but not limited to – the following:

• Transfer Certificate of Title (or a clear copy of it)
• The Deed of Absolute Sale (or Contract to Sell, or the Reservation Agreement) from the developer
• Tax Declaration/clearance/receipts.
• Some – but not all – banks may also require the vicinity map (usually that which has been certified by a geodetic engineer), or a bank form you need to sign giving the bank authority to verify and inspect the property.

MRI (Mortgage Redemption Insurance) application. As the name suggests, it is a life insurance taken on the borrower for the benefit of those he/she may leave behind. In the case of his/her untimely death or total disability, this policy covers part or the entire unpaid portion of the home loan.

Additional forms. Some banks require additional documents or bank forms, depending on the need. For those who are working in the Philippines, they made need the following as well:

• SPA (Special Power of Attorney.) Sometimes when one is employed locally but is based or sent to provinces for work, they will sometimes need an SPA from an authorized representative especially if there are immediate needs related to the loan.
• Latest bank statements in the last 3-6 months.
• Marriage contract, if married.

Understanding what you need for your home loan is half the battle. As long as you know what document copies you need in acquiring a home loan, then the job becomes as easy as pie.