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Braulio Giron Jr

Braulio Giron Jr

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As a result of the ongoing Covid-19 pandemic, interest rates on home loans are at their lowest. For most of 2021, the Bangko Sentral ng Pilipinas (BSP) held key overnight borrowing steady at a record low of 2%, while interest rates on overnight deposit and lending facilities have also remained at 1.5% and 2.5%, respectively. The Home Development Mutual Fund, or Pag-IBIG, on the other hand, also currently offers home financing at some of its lowest interest rates in over a decade.

With that said, it is surely an ideal time to borrow money and invest in a property despite the pandemic. Unfortunately, approval of a home loan is not always guaranteed, since there are specific criteria that need to be met with each type.

Not qualifying for a loan, however, does not necessarily mean not being qualified for homeownership. Knowing what to do next can help in recognizing your options that will eventually lead to a successful home purchase.

Determine the reason for disapproval

The first thing to do upon being notified of your home loan application being rejected is to be mindful of why. 

Since banks are governed by law to follow certain criteria when approving or rejecting loans, they have the same obligation to borrowers to provide details on why there is any reason for the latter. 

If you’re working with a financial adviser, he or she will likely provide details of why your loan application was not accepted and should provide alternative options.

Consider purchasing a more affordable property

One such alternative is to consider the possibility of buying a home priced a little less than the one you were trying to get a loan for. 

This is because there are instances when borrowers are not necessarily denied a loan together but simply don’t receive approval for the principal amount they applied for because it is significantly larger than the borrower’s savings and other finances.

By considering property for sale that is a little more affordable, and subsequently applying for a home loan with a lower principal amount, your credit and other finances may be substantial enough to result in its approval.

Or purchase an outright different type of property

If not because of the price, some home loans get rejected because of the home itself. Most lending institutions follow rigid standards when evaluating the homes their loans are used for because the land titles of these properties also serve as collateral during the life of the loan.

While banks ideally do not want their borrowers’ loans entering default, they always consider the possibility and choose to avoid receiving the rights to a property that is problematic to sell–something they would have to do if a borrower is indeed unable to make monthly loan payments. 

Buying a home that is brand new and built by a reputable developer is an easy way to avoid this type of scenario. You can find the best and latest of those properties here.

Explore other loan options

If the reason for the denial of a loan application is not the property in question, then it might be (actually, it is more often) because of a borrower’s current finances. 

Income that is not yet established enough to be considered sufficient for covering monthly payments, or existing or outstanding loans, can hinder one’s chances at borrowing a large sum for a home.

When this happens, it is best to speak with finance or real estate professionals and ask if other home loan programs may be better suited to your needs and fit your present finances. These would likely also be offered to you when your initial application isn’t approved, as most banks will try to accommodate borrowers’ needs whenever they can to keep them as clients.

Apply for a home loan elsewhere

Even when your loan application with one specific lender is declined, it in no way disqualifies you from applying for a loan with other banks. Granted, most private financial institutions more or less follow similar qualifications for their home loans, but some offer a wider variety of loan programs, while others are also a little less stringent in their approval process.

To make this easier, you can reach out to an Ohmyhome agent, as Ohmyhome can help you make applications for home loans through most major banks, saving you time in the process.

You can also opt to explore options with the Home Development Mutual Fund, which had released a record Php27.39 billion in home loans in the first four months of 2021, 64-percent more than what they lent in the same period in 2020. If you’ve been a remitting Pag-IBIG member for at least 24 consecutive months, you are eligible for a Pag-IBIG home loan. 

Apart from Pag-IBIG, you can also look to mortgage loans from cooperatives, as well as in-house or direct financing from the developers of brand new homes themselves.

Consider borrowing with a co-signer/co-borrower

If for some reason you still do not qualify for any other loan program with any other lender on your own, another route is to submit a new loan application but this time with a co-borrower. The person you sign with, for all intents and purposes, should be one with finances and a credit history that is of the best possible standing for a greater chance at approval. 

This is an option that should be considered a last resort as you’d not want to place any loan liabilities on anyone else but yourself. But in case you do need to explore it, it is most ideal to share the responsibility with someone with whom you will share the home. Your spouse as a co-borrower is who would most come to mind, but could easily be a parent, sibling, or in-law.

It’d be best to check with your loan provider if they allow for applying with a co-borrower, and understand who they deem qualified.  

Looking to move forward with your home buying goals and apply for a home loan? Connect with an Ohmyhome agent to receive expert assistance throughout the entire property process, be it finding a home to buy or applying for a loan for it. To view the best and latest houses and condos for sale in the Philippines, visit Ohmyhome.com or download the Ohmyhome app today!


Ohmyhome was launched in the Philippines in September 2020, following the company’s establishment of a tech team in the country in 2017. Ohmyhome was originally founded in 2016, and subsequently rose in Singapore as a leading PropTech solution and licensed real estate agency.

Ohmyhome expanded into the Philippines so that Filipino home seekers can have a real estate partner that they can trust to have their best interests at heart and can be relied upon to provide exceptional services throughout the entire property journey.

Featuring thousands of properties across many of the Philippines’ major real estate brands, Ohmyhome differs from other local platforms by going the extra mile and extensively helping buyers narrow down their choices and find the property that best suits their budgets, home needs, and lifestyle preferences.

The company’s Real Estate agents help in the shortlisting of options and provide professional services through the entire purchasing process. These include assistance in property inspections, negotiations, the finalization of the Conditions of Sale, deposit collection, the submission of property documents, as well as providing buyers regular updates. 

Ohmyhome helps Filipinos find their dream homes, all while making sure each real estate transaction is complete and is an efficient and enjoyable experience.

Stay connected with Ohmyhome Philippines by following our official Facebook, Instagram, and LinkedIn accounts.

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get an agent

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FOR OFWS

Buy a Property in the Philippines

Come home to the property of your dreams.

Buying for Investment

While you’re away, we take care of your property investment.

Buying for Home Ownership

We help OFWs find their forever home.

DO IT YOURSELF​

Prefer to do-it-yourself?

Check out how our platform can help

Browse Resale Listings

Connect with sellers through our app

ARTICLES​

Steps for First Time Buyers

Like any new experience, buying a home for the first time is daunting.

Home Buying for Your Family

Make sure you’ve thought about these things before you decide to buy a house.

Get The E-Book

Sell

get an agent

Sell with an Agent

Dedicated experts at your service

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Post a Listing for Free

Connect with buyers through our app

Articles

Factors Affecting Home Value

Know the factors that affect property value before you buy a home.

Mistakes to Avoid in Selling

Make sure you’re not committing any of these fairly small, common mistakes.

Passive Income from Real Estate?

Real estate generally appreciates in value and can also be rented out.

Sell Your Property Fast

This is how you can attract more homebuyers.

Get The E-Book

For Tenants

get an agent

Rent with an Agent

Dedicated experts at ayour service

ARTICLES

Renting vs. Owning

Either way, it’s much easier outside Manila.

House or Condo?

Both have advantages and limitations. Everyone has different preferences.

Do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Search or Post your home

Connect with landlords through the app

For Landlords

get an agent

Lease with an Agent

Dedicated experts at your service

ARTICLES​

Assessing Property Value

Of course, knowing your property’s true value is key to any great investment.

Home Staging Tips

With this checklist, you get a better chance of finding a long-term tenant.

Do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Search or Post your home

Connect with tenants through the app

Our Properties

By Developer

SMDC

Properties from the good guys.

Robinsons Land

Raise, live, and connect.

Moldex Realty

The gateway to ideal community living.

PIK

Russia and Europe's largest homebuilder

For Ofws

What we do for OFWs

Safely secure your dream home from overseas.

Buying for Homeownership

Connecting you with the top developers nationwide.

Buying for Investment

For a seamless and stress-free property investment.

LOCATION GUIDES​

Life in SYNC is a Life Well Balanced

A good home gives good shelter, but a...

Quezon City Community Guide: Why Invest in Property in ‘QC

Quezon City is the Philippines’ second...

Break from the Metro: Why Buy a 
Home in Antipolo

While some seek their faith in Antipolo...

Buy a Home in Lipa for a Break from the Big City

Lipa continues to emerge as a good...

Finance & Investments

Your Starter Guide for Investing in Homes for Sale

Buying a home is a major expense but...

Why Employers Must Invest in Employees’ Homeownership

Employees sign-up and stay with the...

How to Successfully Save for Your Dream Home

With how high property prices are, ho...

Rent or Own? Either Way, It’s Easier Outside Manila

Manila has always been one of the co...

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