Pagibig Financing

Pag-IBIG Fund, Housing Loans, Mortgage, Membership, Foreclosures, etc

Housing Loans

Why This Question Is Wrong: “Can I Pay The Whole 24 Months Contribution One-Time So That I Can Avail of the Housing Loan?”

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Yes, that’s a wrong question and later I will explain why.

The main purpose of this article is simply to tell you not to ask that question from now on, because it’s a wrong question. Enough of that question. Period.

The Right Answer To The Wrong Question

We have received that kind of question several times and the answer has already been put at the FAQ Page of this website. You can go visit that page if you don’t want to read a lengthy explanation.

But since you are already here, heck, let’s answer that.

Maybe someone already told you that you can pay the whole 24 months upon membership and right there and then apply for a housing loan. That used to be possible. But the management of Pag-IBIG Fund found out that it’s been abused many times with some members doing it just for the sake of getting a loan.
And so they fixed the loophole. A new rule was implemented and it is not anymore allowed do it. In other words, if you are a new Pag-IBIG Member, you really have to be actively contributing for a period of 24 months before you can begin applying for a housing loan.

So Why Is It A Wrong Question?

The very question itself shows that the person asking is in desperate need of a loan. Unfortunately, just because you are desperate need of a loan doesn’t mean you will get the money. As a matter of fact, the odds are against you if you display such a behavior.

It’s a wrong question because:

  1. Pag-IBIG Fund Doesn’t Care If You Need A Loan.
  2. Pag-IBIG Fund Doesn’t Know You Yet.
  3. Pag-IBIG Fund Can’t Tell If You Have The Means To Pay For The Loan.

Okay, let’s tackle it one by one.

Reason #1: Pag-IBIG Fund Doesn’t Care If You Need A Loan.

One of the erroneous notions Pag-IBIG Members have is thinking that they are entitled to a loan. Unfornately, no. Just because you are a member of the Pag-IBIG Fund doesn’t mean you can apply for a loan any time and get the proceeds too.

Reason #2: Pag-IBIG Fund Doesn’t Know You Yet.

Most people who are asking such question are either not yet members or new Pag-IBIG Members. That means, these people have no proven records yet at Pag-IBIG. They are like strangers asking for a loan. They could be here now and gone the next day, who knows?

As a member, it is to your advantage if you maintain a clean, active and impressive record with Pag-IBIG Fund before you even attempt to apply for a loan. See to it that your records are updated and your contributions are up-to-date.

Reason #3: Pag-IBIG Fund Can’t Tell If You Have The Means To Pay For The Loan

Think about it. When you get loan, you are most likely to benefit from it and Pag-IBIG is taking a risk in granting you the loan. So to lessen the chances of making a mistake in granting the loan, and therefore losing money, Pag-IBIG has to make sure that they are giving it to the right guy — the one who has the means of paying the loan.

One of the ways Pag-IBIG checks for you are capable of paying the loan is by checking on your employment records such as employment history, contract of employment, salary, etc. So, before applying for a loan, see to it that your finances are in the right order.

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This article is written by Carlos Velasco to help Pag-IBIG Fund Members understand the importance of the 24-month period of active membership to the Fund. The question is also among the most asked by the website visitors and with this article we at PagIBIGFinancing.com hope to make things clear for all Pag-IBIG Members.

Benefits of Becoming A Pag-IBIG Fund Member

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It’s a deplorable fact: A lot of Pag-IBIG Fund Members, especially the employees, are not aware of the benefits they can derive from becoming (forcibly, since it is mandatory) a member of the Pag-IBIG Fund. For some, getting a payroll deduction for Pag-IBIG contribution is an automatic acceptance of something that is unavoidable -– no questions asked, no complaint unless the net salary is already far too low to even pay for electric bill. After all, there must be some deductions to the salary just like Income Tax, SSS or GSIS, right?

Well, since you are already at it and since it is an inescapable fact that you (and your employer) will be deducted with Pag-IBIG contribution, wouldn’t it be good also if you know where your money is going and what you are getting in return? After all, that’s still your money.

Here, we’ll discuss the three benefits you can get by participating in Pag-IBIG Fund. This is applicable to any member of the Fund : employees, OFW’s under Pag-IBIG Overseas program, and voluntary members alike.

If no one has explained this to you in the past, please read it carefully and share it to any Pag-IBIG Member whom you care about.

Okay, without so much talk, here are the three basic benefits you can get from being a member of Pag-IBIG.

  • Housing Loan
  • Short Term Loan
  • Provident Savings

That’s it. Only three benefits so far and you need to remember and understand those. Detailed explanation of each one follows next.

Housing Loan — This is perhaps the most popular program benefit of the Pag-IBIG Fund. Any member knows a little bit about this. In fact, the mere mention of the term “Pag-IBIG Fund” almost always translates to Housing Loan.

One of the mandates of Pag-IBIG Fund is to be of assistance to the public in providing cheap financing for their housing needs. Pag-IBIG accomplishes this by working in partnership with the local Real Estate Developers and arranging affordable loans to real estate buyers (Pag-IBIG members).

An affordable loan means lower interest rate compared to the prevailing rate in the market and payable in longer terms. At the time of this writing, Pag-IBIG Fund offers a home loan at a low interest rate of 6% (for PhP 400,000 loan) with a loan term of up to 30 years. A qualified member can get a maximum loan amount of up to 3 Million Pesos.

Short Term Loan — Just like SSS and GSIS, Pag-IBIG Fund also offers financial assistance to qualified member by granting short term loan.

There is a Calamity Loan for members affected by unforeseen calamity like flood, fire, volcanic eruption and other similar cases. There is also a Multi-purpose loan that you can use for whatever reasons: financing a micro-business or buying the latest toy you have been dying to get.

So, the next time you need money, before asking from your friend (who has every doubt if you can ever pay him back), try your luck at Pag-IBIG Fund.

Provident Savings — This is something that a lot of members are not aware of. If you are one of them, pay attention to this part.

Another way of looking at your contributions to Pag-IBIG is to consider it as your savings, which you can withdraw at maturity date. Pag-IBIG Fund makes it very clear that your contributions, plus that of your employer will earn dividend. Now, you can get all that money, called Total Accumulated Value (contributions plus dividend), when it reaches maturity.

Unlike the money in a bank regular savings where the interest rate is given, your earnings in Pag-IBIG is not readily foreseen ahead of time. In other words, you are essentially participating in an investment and your earnings will depend on the overall performance of that investment.

Speaking about Savings under Pag-IBIG Fund, you may also want to check the Pag-IBIG II Program, which is another investment option from Pag-IBIG and is available only to its members.

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This article on the Benefits of Becoming Pag-IBIG Fund Members is written by Carlos Velasco.

The Pag-IBIG Housing Loan Process

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This can be filed as one of the frequently asked questions: “How can I apply for a Pag-IBIG Housing Loan?”

This article addresses that question in a very straight-forward and easy-to-understand manner.

So without further ado, here are the steps to take.

Step #1: Attend The Loan Orientation. Officially, it’s called Loan Counselling Session. It’s conducted at any Pag-IBIG Office all over the Philippines. Check your nearest Pag-IBIG Fund office to check their scheduled Loan Counselling Session.

Step #2: Fill Up Some Documents. Normally, you will be asked to accomplish the following documents:

  1. Preliminary Counselling Questionnaire – Some basic questions that are easy to answer.
  2. Membership Status Verification Slip (MSVS) – This will be used by the assigned staff to check your records and contributions to the Pag-IBIG Fund.
  3. Housing Loan Application (HLA) – This is the official document where you signify your intention of getting a loan.

If you are qualified for a loan, you will be given the Checklist of Requirements (COR) depending on the purpose of your housing loan. Fill-up the HLA only after knowing your status. (Read Step 3)

Related: Are you qualified for a Pag-IBIG Housing Loan? Click here to find out.

Step #3: Submit HLA And Other Required Documents. This will probably take a couple of days to comply. But once all of the documents in the requirement checklist are ready, submit them together with the Loan Application Form. You will be asked to pay the processing fee, which is non-refundable.

Step #4 Wait for The Notice of Loan Approval or Letter of Guaranty. Or if you can’t wait on your mail box, phone them to follow-up the status of your loan application.

Step #5. Sign Loan Documents. There are some and will be provided at the Pag-IBIG Fund office.

Step #6: Visit the Bureau of Internal Revenue and Registry of Deeds.

  • Pay for the documentary stamps and capital gains tax at the BIR.
  • Have the Registry of Deeds put an annotation of mortgage on the Land Title.

Step #7. Get Loan Proceeds. But you have to show Pag-IBIG Fund the following documents:

  • Original Transfer Certificate of Title (TCT) in the name of the applicant with annotated mortgage
  • Deed of Absolute Sale with original stamp from the Registry of Deeds
  • New Tax Declaration in the name of the applicant
  • Updated Real Estate Tax Receipt (for house and lot, if applicable)
  • Occupancy Permit (secured from LGU Engineering Office, if applicable)
  • Assignment of Loan Proceeds

That’s it for the Pag-IBIG Housing Loan process — only seven steps.

Most likely, you will also be asked to make an advanced payment on the first monthly amortization immediately following the loan release. So have your cash or check ready.

Further Note: If you are buying a property from a real estate developer, this whole process would be easier. All that are needed is for you to follow Steps 1 to 3. Ask your agent or broker if he/she can assist on the housing loan application most often you will be extended an assistance.

Other Articles Related to Pag-IBIG Housing Loan:

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The Pag-IBIG Housing Loan Process is written by Carlos Velasco in response to website visitor requests.

Pag-IBIG Housing Loan Default and Foreclosure

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Most real estate purchases and investments are made with the use of borrowed money; that is by mortgage loans.

In an ideal world, these mortgages are paid on time and are eventually fully paid including all the interest incurred by borrowing the money. But unforeseen circumstances do sometimes happen, which lead to loan defaults and, worst of all, mortgages being foreclosed.

Foreclosures are often painful on the part of the borrower and a hassle on the part of the lender. This is the reason why lenders are very strict in evaluating loan applications. It is not uncommon for lenders to ask for very detailed personal and financial information from their clients.

Why Loan Defaults Happen?

Given the fact that Housing Loan Default is something to be avoided, there are some reasons why they happen. Here are some common ones:

  • Personal and Financial Problems — the loss of a job, emergencies, calamities, or being assigned to another city.
  • Physical Flaws Of the Property — weak structure, dilapidated roads, flood-prone area, etc.
  • Legal Problems — land title disputes, marital problems

Loan Default Leads To Foreclosure

For regular Pag-IBIG Housing Loans, loan default happens when the borrower or any of his co-borrowers…

  • fails to pay three consecutive monthly amortizations
  • fails to pay monthly membership contributions
  • fails to comply other obligations of the loan

In the case of Pag-IBIG Rent-to-Own units, a default happens if you fail to pay three consecutive monthly rentals.

If the borrower defaults on a loan, the outstanding loan, accrued interest, penalties, fees and other charges become immediately due and demandable. Aside from that, Pag-IBIG also imposes that the “unpaid monthly payments shall continue to be charged with a penalty equivalent to 1/20 of 1% of the amount due for every day of delay.”

What To Do If Foreclosure Is Underway?

A foreclosure is a very stressful situation. Once you are at a point near that, knowing the options to take can greatly help.

If you find yourself unable to continue to make the scheduled payments on a mortgage loan, consider the following alternatives before it’s too late:

1. Sell the property and repay the loan. If you are lucky to have a friend or relative who has ready cash to pay for the property, this is the way to go.

2. Have someone assume the loan. Announcing to the whole world that you are in financial distress may help after all. Who knows, someone down there might be a good candidate and he could be interested in assuming your loan.

3. Restructure the loan. Discuss this with the lender; the Pag-IBIG Fund, in this context. A Loan Restructure might help reduce the payments temporarily.

4. Just let it be. That is, just allow the lender to continue with the foreclosure. Some properties really deserved to be foreclosed, most especially those that are really giving you a lot of headache instead of a roof over your head.

Prevent Foreclosure By Avoiding Loan Defaults

As a member of Pag-IBIG Fund, loan defaults and foreclosures are things to be avoided like a dreaded virus. Remember that once you have faced a foreclosure in your Pag-IBIG Housing Loan, you may be denied housing loans in the future.

One of the ways of preventing loan default is by first being honest with your finances. Before deciding to use a housing loan, consider your monthly expenses, you may have to do away some if your house is on top of your priority list. This requires a lot of discipline.

It is also very important that you know how to buy the right property that fits your needs. Don’t even consider buying in depressed areas and unsecure or unsafe neighborhood.

Note From The Website Administrator :

This website is not just about giving you inside information on Pag-IBIG Financing. We also intended to help everyone who is facing a foreclosure. If you know someone who has a property financed by Pag-IBIG and is on the verge of a foreclosure, please refer him / her to this website. The property can be listed here FREE of charge for every web visitor to see.

Again, that’s a FREE listing offered to distressed Pag-IBIG Members.

To avail of the FREE service, please send the details or leave us a message using the contact form provided on this website.

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This article on Pag-IBIG Housing Loan Default and Foreclosure is written by Carlos Velasco.

Getting a Loan? First Consider Getting A Pre-Qualification.

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This is a very common scenario: Juan thinks he likes the house shown to him by the real estate broker. On impulse, he pays for a reservation fee to hold the property in his favour without even considering how much he has to cover for the down payment. A few days later thinks about mortgage financing.

Can you spot what’s wrong with Juan’s approach to buying?

Most likely than not, this will eventually lead him to losing his reservation fee… down the drain. Poor Juan, he never even knew what he is getting into.

Of course, Juan is not alone. I’ve seen many, many cases like this happen over and over again. I don’t know if it is the excitement of buying a house or just plain ignorance that caused them to be trapped into the deal.

For most of us, real estate is one of the most expensive investments we can make. That is why, many properties are bought in instalments, usually using mortgage loans with a little down payment.

Before you buy a piece of real estate, it helps if know the following:

  1. The Amount of Down Payment you can comfortably shell out.
  2. The Loan Amount you can comfortably shoulder.

Of the two, the second one is far more important because a mortgage loan entails a longer payment period and will probably take toll on your household budget.

The Loan Pre-Qualification Process

Pre-Qualification is an assessment process used to determine how much loan you can get. It can be either informal or formal.

An Informal Pre-Qualification can be done by you or by any real estate agent. This is a really quick-and-dirty method of determining how much you can afford based on the following factors:

  • Your income
  • Outstanding Debt

Since the person doing an informal pre-qualification is not really committed in giving you the loan, what usually happens is the whole process becomes simply an exercise in fantasy. That is, you could bloat your income or lower down your current debt. An ball park figure might come out giving you an idea of how much loan you can afford or you might be granted.

On the other hand, if you are really serious in buying a property, you should get a Formal Pre-Qualification. This process takes a little longer. At the very least, it involves the following:

  • Going to the office of a lending institution (Bank, Pag-IBIG)
  • Having you sign a Loan Application Form
  • You lay down your financial life on paper (your income, other assets, liabilities, outstanding loans, etc)
  • You may be asked some personal questions
  • Submitting some form of income documents
  • Checking On your Credit History

No Guarantee Of Getting A Loan

Take note that getting pre-qualified is not a guarantee that the lending institution will also grant you the loan that you can possibly afford. That involves an entirely different set of assessments.

The fact of the matter is you can pre-qualify yourself if you know the parameters used by the lender in the pre-qualification process.

The advantage of getting a formal pre-qualification is once you apply for a loan, the processing time will be a bit shorter since some preliminary steps have already been done in evaluating you as a loan applicant. The trick is to apply for a loan immediately as soon as you got pre-qualified. If you delay it, then you have to undergo another set of evaluations and a new set of fresh documents will be asked of you.

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This article on Loan Pre-Qualification is written by Carlos Velasco.

Pag-Ibig Housing Loan Requirements

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So you’ve finally decided to invest in real property using Pag-IBIG Housing Loan?

You figured that it’s about time that you apply for that Pag-IBIG Loan after all those years of faithful contributions to the Pag-IBIG Fund.

Now you ask yourself: “What are the requirements to avail of Pag-IBIG Housing Loan?”

There are standard requirements asked from the applicant upon Loan Application and prior to Loan Approval.

Additional requirements will also be asked from the applicant when deemed necessary by the Pag-IBIG Fund.

Documents Required Upon Loan Application

  • Housing Loan Application (HLA) notarized with ID photo – original copy
  • Approved Membership Status Verification Slip (MSVS) – original copy
  • Certified true copy of Transfer Certificate Title (TCT) of the property by the Registry of Deeds (latest title)
  • Photocopy of updated Tax Declaration
  • Location plan and Vicinity map

For Employed Pag-IBIG Members:

  • Notarized Certificate of Employment and Compensation (Pag-IBIG Format)
  • Notarized Certificate of Employment and Compensation (Employer’s Format) and one month latest Pay Slip
  • Income Tax Return/Certificate of Tax Withheld (W2 – Form 2316) and one month latest Pay Slip

For Self-Employed Pag-IBIG Member:

  • Income Tax return (one year) with Audited Financial Statements and Official Receipt of tax payment from Bank
  • DTI Registration
  • Business or Mayor’s Permit

For Pag-IBIG Overseas Program (POP):

  • Employment Contract or Employer’s Certificate of Income, duly certified by the employer (with English translation if in foreign language) or other valid Proof of Income
  • Special Power of Attorney (SPA) notarized prior to date of departure or duly certified and authenticated by the Philippine Embassy or Consulate in the country where the member is staying, for members abroad

See also: Top 5 Things Every OFW Should Know About The New Pag-IBIG Law of 2009

Additional Requirements

pag-ibig housing loan application
Depending on the purpose of your housing loan, Pag-IBIG may ask that you submit the following upon Loan
Application.

Purchase of Lot or Purchase of Residential Unit

  • Contract to Sell Purchase Agreement – original copy.

House Construction or Home Improvement

  • Building Plans, Specifications and Bill of Materials duly signed by the Licensed Civil Engineer or Architect
  • Real Estate Tax Receipt

Refinancing of an Existing Loan

  • Statement of Account on the outstanding balance and also indicating the purpose of the loan
  • Any of the following documents:
    • Official Receipt for the past twelve months
    • Subsidiary Ledger
    • Any proof of payment for the past twelve months

Lot Purchase and House Construction

  • Comply the requirements for lot purchase and for lot construction.

Note: Pag-IBIG Fund reserves the right to require additional requirements
to facilitate the loan evaluation process.

Documents required prior to Loan Release (upon approval)

  • TCT in the name of the borrower with proper mortgage annotation in favor of Pag-IBIG Fund (Owner’s Copy)
  • Certified true copy of TCT in the name of the borrower with proper mortgage annotation in favor of Pag-IBIG Fund (RD’s copy)
  • Photocopy of New Tax Declaration in the name of the Borrower and Updated Tax Receipt
  • Proof of Billing
  • Loan Mortgage Documents
    • Loan and Mortgage Agreement with original RD stamp
    • Notarized Promissory Note
    • Disclosure Statement on Loan Transaction
  • For The Employed Members : Collection Servicing Agreement with Authority to Deduct Loan Amortization or Post – Dated Checks
  • For The Self–Employed Members: Post–Dated Checks

Additional Documents Prior to Loan Release Depending on Loan Purpose

Purchase of Lot or Purchase of Residential Unit:

  • Deed of Absolute Sale with original RD stamp.

House Construction or Home Improvement:

  • Building, Electrical, and Sanitary Permits duly approved by the building officials
  • Occupancy Permit.

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Pag-IBIG Housing Loan Requirements is written by Niel Kyro Jo.

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