First published in BusinessWorld
ASPIRING homeowners know the struggle of applying for a mortgage. Going to banks with different requirements, interest rates, and a mountain of paperwork — acquiring real estate to call your own is no easy task.
Nook, the Philippines’ first online mortgage brokerage platform, seeks to remedy that.
With the goal of streamlining and simplifying the property loan application process in the country, the platform aims to enable Filipinos to conduct property search, do loan comparisons, and experience a seamless loan application process online.
“Applying for a home loan here in the Philippines can be a tedious and intimidating process. Before prospective clients even begin, they are already overwhelmed with the long list of requirements or the time they need to set aside to accomplish all the application steps,” Chris Elder, chief executive officer of Nook, told the media at a event last month.
“We aim to address this with Nook. We offer users an end-to-end platform, from property search to bank approvals, empowering more Filipinos to gain seamless access to financial options available to them,” Mr. Elder said.
To facilitate this, the company has partnered with top banking institutions in the Philippines, including Asia United Bank (AUB), BDO Unibank, BPI Family Savings Bank, Bank of Commerce, CTBC, China Banking Corp., Rizal Commercial Banking Corporation and Security Bank. Talks with five other banks are ongoing.
Mr. Elder noted the increasing purchasing power of Filipinos and thousands of new residential options built each year present opportunities for the property market, as seen with the continued surge in office and residential demand from locals and foreign nationals.
According to the latest numbers released by the Bangko Sentral ng Pilipinas (BSP), the purchase of new housing units accounted for 74% of residential real estate loans in the third quarter of 2019, with most of the RRELs granted in the National Capital Region intended for the purchase of condominium units (43.1%).
Real estate consultancy firm Colliers International Philippines also predicted in a report last December that it is seeing a “sustained” property market over the next two years, with mid-income condominium units contributing towards the stronger demand.
Mr. Elder added that Nook intends to tap Filipino consumers who are intimidated to begin their home loan search due to various reasons, including not knowing whether they are qualified to apply for a bank loan.
Nook is designed to make applying for a home loan simpler and easier through its website, which allows users to evaluate the most optimal loan option for their target properties.
At the same time, the platform offers a more efficient way for banks to verify prospective clients by removing applicants who do not meet their particular criteria.
Through Nook, an applicant will be able to preview the amount of monthly repayments they have to make, fees, and other requirements from each bank and get pre-qualified in just a few minutes.
The company will help clients in every step of their housing loan process, together with its Nook Home Loan Consultant, free of charge. The platform is based on Amazon Web Services and secured with 128-bit encryption.
Mr. Elder also believes that this is an opportune time for the Philippines to adopt the trend and practices of the industry in countries such as Australia and the United States, where over 60% and 68% of borrowers respectively go through mortgage brokers instead of direct-bank applications to secure a housing loan.
“What Nook offers is direct access to bank partners for your home loans with the easiest application process you can get,” Mr. Elder said.
“It is time that the Philippines recognize how technology can transform the home loan process from application to closing,” he added.