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Pag-IBIG Housing Loan Alternatives

by Pag-IBIG Financing Admin

Real Estate Loan is indeed the most popular service available to the Pag-IBIG Fund Members. In terms of the interest rate, it is very competitive (in many cases even lower) compared to the other mortgage loan financing alternatives in the Philippines. (The other Real Estate Financing alternatives will be discussed in the succeeding paragraphs) Another great advantage is the longer payment term of up to 30 years.

Some Uses of the Pag-IBIG Housing Loan

If you have not yet stumbled on it from the other articles, here are some uses of the Pag-IBIG Housing Loan.

  • Lot-Only Property Purchase
  • House-And-Lot Purchase
  • Construction of A Residential Unit
  • Home Improvement
  • Refinancing of Existing Mortgage Loan

Looking at that, it’s hard to imagine how an eligible Pag-IBIG Member should not take advantage of this benefit. Go for it if you have the chance.

Housing Loan Eligibility

But then again, to even qualify for the loan, a member should at least meet the minimum requirements listed below.

  • Must be a member for at least 2 years and has contributed at least 24 months. Take note: no more one-time payment of the 24 months contribution this time.
  • Must not be more than 65 years old at the time of loan application.
  • Must not be more than 70 years old at the date of loan maturity.
  • Must have NO outstanding Pag-IBIG Housing Loan either as principal or as co-borrower.
  • Must have NO outstanding Pag-IBIG Multiple-Purpose Loan in arrears at the time of application.
  • And most importantly, must not have a previous Housing Loan that was foreclosed, cancelled, bought back or subjected to dacion en pago.

For some becoming a member of the Pag-IBIG Fund is already too much of a hassle. There are membership dues to remember; seminars to attend to when applying for a housing loan; the difficulty in sending the monthly dues, etc. Some members have been inactive for a number of years already. Still others are not even eligible for Pag-IBIG Housing Loan.

If this is your case, there are still home financing alternatives for you. Consider the following…

Bank Financing

The first big daddy of Real Estate Financing in the Philippines is, of course, The Bank. They offer a variety of Home Financing Products that you can choose from.

The good thing about Bank Financing is that there are a lot of competitions going on. You should shop around and decide for yourself the best one based on the following factors:

  • Professional Service – How cool is it if your banker treats you like a King? I can tell you don’t get that kind of professional attention in Pag-IBIG.
  • Interest Rate – The lower, the better for you.
  • Payment Method – As painless as possible especially if you are working overseas. Check for the Internet Banking feature.

Tip: When you approach a loan officer, you may want to do away with that expensive Clive Christian Perfume. It will be to your advantage if you wear something that smells like money instead. I hope you know what I mean by that.

Other Similar Financial Institutions to Consider:

  • Credit Cooperatives
  • Money Lenders

In-House Financing

This one is very simple. There are only two parties involved: you, the buyer and the seller, which is usually the Real Estate Developer.

If you are constructing a house, the developer acts as if it were The Bank. It finances the home construction and you, in turn, pay directly to the developer.

Like the Bank Financing, In-House Financing almost always requires that you put a down payment (20% of the selling price or so) and amortize the balance for a given term. This Financing Scheme also bears an interest. The series of monthly amortizations will reflect your payment for the principal amount borrowed plus the interests.

The primary advantage of In-House Financing is its simplicity.

Bank Financing vs In-House Financing

The primary downside, however, is the stiff interest rate that goes with it. At the time of this writing, the going interest rate of many In-House Financing Schemes is in the range of 18% to 21% per annum. Compare that with the going interest rate the banks are charging, which is in the range of 8% to 12%, and you will be in for the shock of your life.

When it comes to Home Financing, simplicity can be very expensive.

~~~

“Pag-IBIG Housing Loan Alternatives” is written by Carlos Velasco.

Filed Under: Buying Tips, Housing Loans, Other Loan Types, Real Estate Finance Tagged With: Bank Financing, Housing Loan Eligibility, In-House Financing, Mortgage, Mortgage Loan, Pag-IBIG Housing Loan, Real Estate Financing, Real Estate Loan

The Pag-IBIG Multi-Purpose Loan

by Pag-IBIG Financing Admin

So far on this website, we have mostly focused on topics related to Pag-IBIG Housing Loan. That is indeed the most popular service or benefit available only to qualified Pag-IBIG Members.

The other popular program is the Multi-Purpose Loan (MPL) or sometimes referred to as Personal Loan. The Pag-IBIG Multi-Purpose Loan is essentially a financial assistance to Pag-IBIG Member that they can use for any of the following purpose:

1. Minor Home Improvement – Take note that this is only for minor home improvements. For renovation works requiring larger amount of money, you may want to avail of the Housing Loan for Home Improvement.

2. Small Business / Livelihood Financing – Good news to those who run small businesses or those planning to have one. You may use the proceeds of this loan to finance your small business venture whether it is for expansion or for initial start-up capitalization.

Pag-IBIG Personal Loan

3. Medical Assistance – If you find yourself in need of money for that medical bill, Pag-IBIG Multi-Purpose be of help.

4. Educational Purpose – You can even use it to finance your education.

5. Purchase of Appliances and Furniture – This refers to those toys that you have been wanting to buy.

6. Others – The list could go on. Actually, there can be many other things you can use that loan for.

Loan Amount, Interest Rate, Loan Term

Your loan entitlement depends on the number of contributions made and the Total Accumulated Value (TAV). Remember that TAV is defined as the member’s personal contributions, the corresponding contributions of his employer and the total dividend earnings.

So, how much can you loan exactly? The list below serves as reference.

  • 24 to 59 months contributions = Up to 60% of TAV
  • 60 to 119 months contributions = Up to 70% of TAV
  • 120 months contributions or more = Up to 80% of TAV

As you can see, the longer you have been contributing to the Fund and the larger the amount contributed, the bigger loan amount is also available to you.

The one nice thing about the Pag-IBIG Multi-Purpose Loan is that the interest rate can be as little as 10.75% per annum. That’s one of the most competitive rates in the market you can find.

The loan is to be amortized over a period of 24 months.

Loan Payments and Penalty

Paying for the loan is easier for those who are employed: payments can be done through salary deduction.

However, if you are voluntarily contributing, the following methods of payments are also available.

  • Over the counter
  • Auto-debit arrangement with accredited banks

A penalty of 0.5% of any unpaid amount shall be collected from the borrower for every month of delay.

How To Apply For Pag-IBIG Muti-Purpose Loan

1. Secure an MPL Application Form and checklist of requirements from any Pag-IBIG Fund Office.

2. Accomplish and submit the Application Form together with the requirements at the servicing branch.

3. Wait for the Loan Approval based on the date reflected on the MPL Acknowledgement Receipt.

4. Claim your check with your valid ID and the MPL Acknowledgment Receipt.

Filed Under: Other Loan Types Tagged With: Home Improvement Loan, Loans, Multi-Purpose Loan, Personal Loan, Salary Loan, Total Accumulated Value

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