Taking out a mortgage is a major financial obligation with long-term implications, but securing another one raises the stakes. If you think qualifying for a second housing loan is easy just because you already qualified for one before, then you’re mistaken. It’s more challenging because the requirements can be extraordinary.
If you want to buy another house, use these tips to obtain the necessary funding:
Prepare Your Savings
Any relevant Lancaster review would advise you to put down a large amount of money and keep plenty of cash reserves in your bank account. Having a lot of liquid assets can help lower your risk as a borrower. A big down payment essential reduces the money you have to loan, and play a role in your bid for a more favorable interest rate.
If you can’t pay 20% of the property price upfront and have sufficient savings to cover at least three months’ worth of payments, then you probably shouldn’t do it.
Keep an Eye on Your DTI Ratio
Lenders will scrutinize your debt-to-income ratio even further because you’re already paying for a mortgage. In general, you’re likely to be denied if the total monthly amortizations of your housing loans are more than 35% of your gross monthly income. If you exceed the threshold, you should either eliminate some debts, extend your loan’s term, or pay for a higher down payment to meet your prospective lender’s debt-to-income ratio requirement.
Check Your Creditworthiness
Your creditworthiness is one of the biggest factors for your qualification. You should have an excellent credit score with impeccable history to convince any lender to issue you another mortgage.
The Pag-IBIG Fund is one of the best sources of multiple housing loans in the Philippines. If you manage to secure your second mortgage through it, delinquency isn’t an option. If you default on one mortgage, the agency will treat your other loan account delinquent as well.
Think twice before applying for a second mortgage. Having more than one property may be a good investment, but underestimating the hardship of maintaining two housing loans can cost you everything.