Nook | We're Making Home Loans Simple

Login
  • Home Loans

    We will get you the right home loan from the right bank, faster. Welcome to the future of home loans.

    Get Pre-Qualified

    Find out if you qualify for a home loan from in just 3 minutes.

    Start Loan Application

    The journey to your new home begins here. Start now.

    Book Consultation Call

    Get expert advices from our home loan consultants for free.

    Mortgage Brokering

    We help you with your home loan transaction at no cost to you.

    Cashback

    We'll share some of our commission to you when you get approved.

    Loan Calculators

    Check your financial capacity now.

  • Partners

    Join the many who made the best decision in providing their clients with the best home loan journey available in the country.

    Banking Partners

    Some of the biggest banks in the Philippines with the goal of making home loans simple.

    Retail Partners

    Get discounts and exclusive deals during your home loan journey from these retail shops.

    Affiliate Program

    Refer your friends and family to become an affiliate and receive commission plus discounts for every successful referrals.

    Nook Home Loans - Affiliate Army
  • Latest News

    Featured Posts

    Nook Welcomes Robinsons Bank and Maybank as Official Partners

    Recent Posts

  • About

    Know more about the Philippines' first mortgage broker, how we do it and why only we can do it.

    Nook App

    Transact faster with your Nook home loan consultant.

    Our Process

    We’ll take you through our four simple steps.

    About Us

    Why we are the first and the only mortgage broker in the country.

    Careers

    Join the Mortgage Brokering Industry Pioneer, Nook.

    Contact Us

    We'd love to hear from you.

    Help Center

    What can we help you with?

    Account
    Home Loans
    FAQs

How Banks Decide How Much You Can Borrow

How Banks Decide How Much You Can Borrow

Nook Admin – January 24, 2020

When you apply for a home loan, banks will assess you on a number of different things to work out how much they will lend you.

But what information do they use in deciding the final loan amount? Here is a little bit of insight into the analysis that banks do when they calculate your borrowing power. If is not every factor that a bank will consider but it is a good general guide to consider when starting to look for your next home loan.

How much deposit do you have?

If you want to increase the amount of money banks will lend you, then having some savings behind you is important. A bigger deposit amount can be just as important as a good salary to pay the monthly installments. So it means that even if you have a high salary, if you do not have all that much of a deposit, it will limit you.

Not all income is equal

It is important to know that there are different standards applied to different types of income. For example, income earned from a full time job will be more favourable than income earned on a casual or contracting basis. Also, a self-employed person will have more trouble proving their income compared to a person who earns the same amount of money as an employee. That said, a higher income will help when determining the maximum loan amount you can lend.

Do you have a credit card?

You don’t have to rack up a lot of debt on a credit card for it to penalise you and your borrowing power. Banks will be cautious when it comes to credit cards and may assume that you could spend up to your credit card limit at any time. So if you have a credit card with a P50,000 limit, banks will view that as if you had P50,000 of credit card debt. This is because it is like a liability that you have and could spend at any time.

Everyday expenses?

It is important to take the time to really look at what your day-to-day expenses are because you want to have a home loan that really helps you get into a better financial position – not a stressful one. So banks will look into what your expenses are to determine if you can afford the extra cost of monthly loan installments.

Can you afford a higher interest rate?

When banks do the numbers on you, they do them on a higher interest rate than is currently available to see you can still afford to make the repayments. Rates can change, and they will most likely change a lot over the term of a long loan period. So banks may use a sample interest rate that could be much higher than the current rate. For example, if current interest rates are approximately 6%, the bank may do their calculations on about 8% or 9% to make sure you can still afford the monthly repayments.