AUB Home Loans: A Detailed Guide to Eligibility and Application Procedures

Securing a home loan is a significant milestone for many, often accompanied by a mix of excitement and apprehension. Navigating the intricacies of loan eligibility and application procedures can be daunting, but with the right guidance, it becomes a clear, manageable process. This detailed guide is designed to demystify AUB Home Loans, providing you with comprehensive insights into their eligibility criteria, the various types of loans offered, and a step-by-step application walkthrough.

Understanding AUB Home Loans: Products and Features

AUB (Asia United Bank) offers a range of home loan products designed to cater to diverse needs, whether you’re buying your first home, acquiring an investment property, or refinancing an existing mortgage. Key features that make AUB’s offerings attractive include:

• Flexible Payment Terms: AUB typically provides flexible payment terms, often extending up to 20 years, allowing borrowers to choose a repayment schedule that aligns with their financial capacity. This long-term view can significantly reduce monthly obligations, making homeownership more accessible.
• Competitive Interest Rates: While rates can fluctuate, AUB aims to offer competitive interest rates. These may be fixed for a certain period (e.g., 1, 3, or 5 years) to provide stability, or variable, which can adjust based on market conditions.
• Loanable Amount: The maximum loanable amount often goes up to 80% of the appraised value of the property. This means you’ll generally need to prepare a minimum of 20% for your down payment. Minimum loan amounts typically start at Php 1,000,000.
• Auto-Debit Arrangement: For convenience, repayments are usually handled through an auto-debit arrangement from your AUB account, streamlining the payment process and reducing the risk of missed payments.
• Variety of Loan Purposes: AUB Home Loans can be utilized for various purposes, including:
  • Purchase of a Residential Property: This covers the acquisition of a house and lot, condominium unit, or townhouse.
  • Construction of a House: For those looking to build their dream home from the ground up.
  • Renovation or Home Improvement: To enhance or expand an existing property.
  • Refinancing Existing Home Loans: To potentially secure better terms or consolidate debts.
  • Lot Acquisition: For purchasing land where you intend to build in the future.

Eligibility Criteria: Are You Ready for an AUB Home Loan?

Meeting eligibility requirements is the crucial first step. AUB, like any financial institution, has specific criteria to assess a borrower’s capacity to repay the loan. While some details may vary, the core requirements generally include:

1. Citizenship and Residency:
   • Applicants must typically be Filipino citizens.
   • For Overseas Filipino Workers (OFWs) or seafarers, specific provisions may apply, often requiring a completed employment contract at the time of application and a minimum gross salary. AUB specifically caters to seafarers with dedicated loan products, implying a structured process for overseas applicants.
   • If you are a non-resident alien, eligibility might be restricted, or additional requirements may be in place.
2. Age Requirements:
   • Generally, applicants must be between 21 and 60 years old at the time of loan maturity. This ensures that the loan term concludes before the borrower reaches an age where repayment might become a significant burden.
3. Income Stability and Capacity: This is a critical factor. AUB will assess your ability to make regular payments.
   • For Employed Individuals:
     • Must be on regular status with a registered company for at least one year.
     • Required documents include Certificate of Employment, latest three (3) months’ payslips, and latest Income Tax Return (BIR Form 2316).
     • A minimum gross monthly income is typically required (e.g., USD $800 for seafarers).
   • For Self-Employed Individuals:
     • Must be in a registered business, operating profitably for at least one year.
     • Documentation includes Business Registration Papers (SEC Registration/Articles of Incorporation/By-laws/GIS or DTI Certificates, Mayor’s Permit/Business Permit), latest three (3) months’ bank statements, Audited Financial Statements (for the last 2 years), and Income Tax Return (for the last 2 years).
     • A list of major trade suppliers and customers with contact details may also be requested.
   • For Licensed Professionals: Must be practicing for at least one year.
4. Creditworthiness:
   • A good credit rating is essential. AUB will conduct a credit check to review your payment history on previous loans, credit cards, and other financial obligations. A clean credit record demonstrates reliability.
   • Absence of any major loan defaults is a key criterion.
5. AUB Account:
   • Applicants are often required to open an account with AUB, as this facilitates the auto-debit arrangement for loan repayments.
6. Collateral Requirements:
   • The property being financed serves as collateral. AUB will require a copy of the collateral title (TCT/CCT), Statement of Account/Reservation Agreement/Contract to Sell, photocopy of the lot plan/vicinity map/subdivision plan, and updated Tax Declaration, Tax Receipts, and Tax Clearance.
   • The property must be liveable, fully constructed, and connected to essential utilities. AUB will conduct its own valuation of the security property.

Meeting these general criteria is a strong indicator of eligibility, but specific cases may require additional documentation or evaluation. It’s always best to prepare thoroughly.

The Application Procedures: A Step-by-Step Guide

The home loan application process, while structured, can feel complex due to the volume of documentation and verification involved. Here are the typical stages of applying for an AUB Home Loan:

Phase 1: Preparation and Initial Inquiry

1. Self-Assessment: Before approaching AUB, assess your own financial standing. Understand your income, expenses, existing debts, and the amount you can realistically afford for monthly mortgage payments. Use online calculators to get an estimate of your borrowing capacity.
2. Gather Required Documents: Proactively collect all necessary personal, income, and collateral documents. Having these ready will significantly speed up the process.
   • Basic Application Requirements: Duly filled-out and signed application form, photocopy of two (2) valid IDs each from the principal borrower and co-borrower, photocopy of Marriage Contract or CENOMAR (if applicable).
   • Collateral Documents: Photocopy of TCT/CCT, Contract to Sell, Photocopy of Lot Plan/Vicinity Map/Subdivision Plan, Photocopy of updated Tax Declaration, Tax Receipts, and Tax Clearance.
   • Income Documents: (As listed above for employed or self-employed).
3. Initial Contact with AUB: You can initiate an inquiry through various channels:
   • AUB Branches: Visit a branch to speak with a lending specialist.
   • Online Application: AUB may offer online application forms on their website.
   • Email/Phone: Contact their dedicated Home Loan department via email at homeloan@aub.com.ph or phone.

Phase 2: Application Submission and Evaluation

1. Submit Application Form and Documents: Complete the AUB Home Loan Application Form accurately and submit it along with all the gathered supporting documents. Ensure all information is consistent and verifiable.
2. Initial Review and Interview: An AUB lending specialist will review your submitted documents. You may be contacted for an interview to clarify information, discuss your financial situation in more detail, and understand your specific home loan needs. This step could take several days.
3. Credit Investigation and Background Check: AUB will conduct thorough credit checks to evaluate your credit history and verify the information provided. This includes checking your credit score, payment habits, and outstanding obligations. For self-employed individuals, business background checks might also be performed.
4. Property Appraisal: AUB will arrange for a property appraisal to determine the fair market value of the collateral. This valuation is crucial for determining the maximum loanable amount.
5. Loan Assessment and Recommendation: Based on the collective information from your application, credit investigation, and property appraisal, AUB’s credit committee will assess your loan application. They will determine your eligibility, the loan amount you qualify for, the applicable interest rate, and the loan term.

Phase 3: Approval and Loan Release

1. Conditional Approval (Pre-Approval): If your application looks promising, AUB may issue a conditional approval or pre-approval. This indicates the amount you could potentially borrow, assuming all information provided is verified and final requirements are met. This is a significant step, as it gives you a clear idea of your purchasing power.
2. Formal Approval: Once all documentation is verified, and the property valuation is complete, AUB will issue a formal approval, signifying their commitment to grant you the loan. This approval will be communicated in writing, detailing the terms and conditions of your loan.
3. Signing of Loan Documents: Upon formal approval, you will be required to sign the loan agreement, promissory note, and other relevant legal documents. It is crucial to read and understand all terms, conditions, and repayment schedules before signing. Consider seeking legal counsel if any clause is unclear.
4. Mortgage Registration: The mortgage will be registered with the Register of Deeds, officially placing a lien on the property in favor of AUB.
5. Loan Release (Loan Take-out): Once all conditions precedent are met, and the mortgage is registered, AUB will disburse the loan proceeds. The funds may be released directly to the seller, developer, or to you, depending on the loan purpose and agreement.
6. First Repayment: You will receive information regarding your first repayment amount and due date. Ensure your AUB account has sufficient funds for the auto-debit arrangement.

Special Considerations for Overseas Applicants (OFWs and Seafarers)

For Filipinos working abroad, AUB has specific provisions, particularly for seafarers. If you are an overseas applicant, be prepared for the following:

• Proof of Income from Overseas: This often includes remittance records, bank statements showing regular deposits, and employment contracts with clear salary details.
• Employment Contract Validation: AUB may require a photocopy of your employment contract with a POEA (Philippine Overseas Employment Administration) stamp.
• Seafarer-Specific Documents: For seafarers, additional documents like a photocopy of your Passport and Seaman’s Book, Seafarers Registration Certificate (SRC) or Worker’s Information Sheet (WIS), and Allotment Arrangement certified by the company are typically required.
• Representative/Attorney-in-Fact: It’s common for overseas applicants to appoint an Attorney-in-Fact in the Philippines to handle the application process, sign documents on their behalf, and represent them during critical stages. Ensure proper Special Power of Attorney (SPA) is executed and authenticated.
• Communication: Maintain open lines of communication with AUB and your designated representative, as timely responses are crucial to avoid delays.

Tips for a Smooth Application Process

To enhance your chances of a quick and successful AUB Home Loan application, consider these essential tips:

• Prepare Thoroughly: Have all documents ready and organized. Incomplete submissions are the primary cause of delays.
• Be Honest and Transparent: Provide accurate information in your application. Any discrepancies can lead to delays or even rejection.
• Maintain a Good Credit Score: Pay your bills on time, avoid new significant debts before applying, and check your credit report for errors.
• Understand Your Financial Capacity: Don’t overextend yourself. Borrow an amount you are comfortable repaying, even if you qualify for more.
• Clarify Any Doubts: If you have questions about the requirements or process, don’t hesitate to ask AUB’s lending specialists.
• Follow Up Regularly: While AUB will keep you updated, a polite follow-up can help you stay informed about the status of your application.
• Consider Pre-Qualification: Before a full application, you might explore pre-qualification with AUB. This informal assessment gives you an idea of what you might qualify for, without a hard credit inquiry.

Conclusion

Securing an AUB Home Loan is a structured journey, but one that is well within reach with proper preparation and understanding. By understanding the eligibility criteria, the various loan types, and the step-by-step application process, you can significantly enhance your chances of a successful outcome. Your future home awaits.