Documents

How To Become An Expert in Pag-IBIG Housing Loan in 25 Minutes or Less

One of the requirements before a member can avail of a Housing Loan from the Home Development Mutual Fund or simply Pag-IBIG is to attend a housing loan seminar. If you have not been to that kind of seminar before, here are the essential things that they cover:

An overview of the Housing Loan Program. Luckily, most of the contents of this website are focused on this topic, too. That means if you have been browsing around for quite some time, you already have a good deal of knowledge about the Housing Loan in general.
Question and Answer. For those who are really serious about taking a home loan, you can ask the presenter of the seminar any topic that you want to raise that’s related to the program or your particular situation. If there have been questions bothering you regarding the housing loan, this is a good time to ask those and get official answer. So before to ever go to the seminar, it would be good if you prepare a list of your questions.
Membership Status Verification. Before you can even apply for a housing loan, the Pag-IBIG Fund has to take a look at the details of your membership. They will ask you to fill up this small slip and submit it to the Pag-IBIG staff who will be checking on your membership status while the seminar is going on. Just before the seminar ends, you then get a verification whether you qualify for a housing loan or not.

It’s really that easy. Take note that a big part of the seminar is spent discussing the details of the Housing Loan Program. Indeed it is very important that you know more about it.

But don’t you wish you can attend an online Housing Loan Seminar so you can do it from any place in the planet?

Good news: Now you can, right here on this very page! Thanks to Youtube, your wish is granted!

As a side effect of watching these videos, you can actually become an expert in Pag-IBIG Housing loan. You can be proud to discuss it with your circle of friends. Or, better yet, share this article with them.

Videos On The Pag-IBIG Housing Loan

Part 1:

Part 2:

Important topics discussed in the video:

Eligibility Requirements. Things like age, years of membership, etc. You can also read them here.
The Loan Amount You can Take. Please read this article for the details. The video also discusses concepts like Capacity To Pay and Loan-To-Value Ratio.
Loan Document Requirements. Different types of loans require different documents. Read this to find out which one fits your needs.
How to pay for your Housing Loan. Read this especially if you are based overseas or you salary deduction is not possible for you.
Advanced Payments. There is no pre-payment penalty on your amortization, but do you know how to do it right? Here are some tips on how to retire your loan earlier than its designated term.

Special Notes:

However helpful you find this video to be, this is not a replacement of the actual seminar, which is a requirement when you apply for a housing loan.
Just recently, the Pag-IBIG Fund has raised the ceiling on Housing Loan Amount to P 6 million, from previous P 3 million. The interest rate on socialized housing loans has also been subsidized byPag-IBIG to encouraged low-income members to avail of the program. We’ll have more of this in the up-coming articles.

There you have it. Enjoy watching the videos. It’s like attending a Pag-IBIG Housing Loan Seminar from anywhere in the world.

How To Assume A Loan

by Pag-IBIG Financing Admin

Loan Assumption is one of the misunderstood concepts in real estate even among professionals like brokers and agents. A lot of them just don’t know how to go about it or can’t simply do it right.

While it’s true that a Pag-IBIG Housing Loan is assumable, it should be approached very carefully and with the help of a competent lawyer. Once you do it wrong, it could lead to a lot of problems, stressful situations and possibly loss of money.

If you are the one assuming the loan, for instance, one of the worst things that could happen is this: You religious pay the monthly obligation to the loan until such time that it is already fully paid. Suddenly you realize that Pag-IBIG doesn’t recognize you as the buyer and won’t transfer the title in your name. It’s like the original buyer is using “your money” to pay for his loan. How would you react if you are in this situation? Naturally, you would feel deceived. Sadly, a lot of people have been into this situation. And if you know someone who is into this, please do them a favour by sharing this article.

Here, we’ll show you two documents that you can use when assuming a loan and we also provide an sample of each.

The Assignment of Contract

This form is essentially used when one party (the original buyer) to a contract wants to assign his full interest in the contract to another party (the new buyer). In other words, nothing is changed in the contract except the fact that one party is being substituted by another.

When crafting this contract, it is important for the assignor (the party assigning the contract to another) and the assignee (the other party to whom the contract is being assigned) to agree and include an “indemnify and hold harmless” clause. Essentially, this means that the assignor releases full responsibility of the contract to the assignee.

Note: A copy of the original contract should be attached to this form and both parties (and their lawyers) should keep copies of this document.

Sample Form: Assignment of Contract

This assignment of contract is made on (date here) between (assignor name and address) and (assignee name and address).

For valuable consideration, the parties agree to the following terms and conditions:

(list your terms here)

Both parties have signed this assignment on the date specified at the beginning of the document.

(Assignor Name and Signature)

(Assignee Name and Signature)

Notice of Assignment of Contract

Sometimes a third party is involved and needs to be notified in writing when an agreement such as the one above is made. This should be the case when you assume a Pag-IBIG Housing Loan from someone else. The Notice of Assignment of Contract is a document meant for this purpose. On the part of the third party, they are now aware of the fact that a new party takes over the contract and should be the one responsible for all its benefits and obligations.

Sample Form: Notice of Assignment of Contract

Date : _____

To: (Home Development Mutual Fund)

RE : Assignment of Contact

Dear _________________:

This notice is in reference to the contract described in the attached document. (Please see the attachment.)

Please be advised that as of (date of assignment), all interest and rights under this contract which were formerly owned by (name and address of assignor) have been permanently assigned to (name and address of assignee).

Please be advised that all of the obligations and rights of the former party, the assignor, to this contact are now the responsibility of the new party to this contract.

(Name and signature of the Assignor)

Further Notes:

Always consult a competent lawyer when drafting documents of this kind. Don’t make the mistake of just relying on your broker to go about this. I’ve heard lots of stories and complaints from people who did this kind of transaction only to wind up with problems later on. Don’t be one of them.

Tips on Buying Titled Real Estate In The Philippines

by Pag-IBIG Financing Admin

Certificate of Titles 101

In real estate, the term “Title” generally refers to the evidence of ownership a person has over a property. Title comes in many forms including the Tax Declaration and Deed of Sale, to mention just two. What we normally mean when we say Title is the Certificate of Title likewise known as Torrens Title. The Torrens System is an old, long-surviving system of land registration method developed by Sir Robert Richard Torrens and was originally used in Australia. It is highly reliable and has been adopted by many countries in the world, including the Philippines.

A Certificate Of Title is the best evidence of ownership of a piece of real estate, such as land or a condominium unit. It is also considered indefeasible, meaning it cannot be annulled, defeated, or made void by any past event, or error or omission in the title.

In other words, the owner of a piece of real estate is the one whose name is indicated in the Certificate of Title. It follows that this is a very important legal document.

Below are some tips you should remember if you are to buy real estate in the Philippines.

Tip #1: Buy Only Titled Properties

Original Cerificate of Title Philippines There are still vast amounts of land in the Philippines that have no Land Title under the Torrens System. Usually, the only proof of ownership that the seller has is a Tax Declaration. Buying this type property is a perfect recipe for a real estate disaster. As a buyer, you don’t want to get involved with this kind of real estate deal.

Ask the seller to hand you a photocopy of the Title. Take note of the Title Number and the indicated name of the owner. To verify the Title at the Registry of Deeds, you will need at least the Title Number and the Name of the owner of the property. The next tip, should be of great help to you.

Tip #2: The Title Must Be Authentic and Accurate

This part is very important. Take this step very seriously.

Always request a Certified True Copy of the Title from the Registry of Deeds that has jurisdiction of the property. You simply can’t trust the seller’s broker or agent to handle this part. You have to personally do it, or have someone you can trust do it on your behalf.

Once you got hold of the title’s Certified True Copy, compare this with the photocopied Title handed to you by the seller or his broker. There should not be any inconsistencies or discrepancies.

Tip #3: The Title Must Be Clean, Free From Liens and Encumbrances

A clean title simply means one that has no encumbrances or liens. Liens, Encumbrances, and other annotations are printed at the back portion of the title.

Take a look again at the Certified True Copy of the Title. Is the back page clean? It should not have any unnecessary words or sentences other than those related to the property’s technical descriptions.

Special Note: Some Titles have very long descriptions that span more than just the front page. If you are not sure about the things written at the back portion of the Title, please consult it with your lawyer or someone who is an expert in handling such cases.

Tip #4: Double Check If The Property Being Sold Is What Has Been Stated In The Title

This sounds crazy, but some unscrupulous sellers will show you a property and show you a completely different land title, which doesn’t correspond to it.

The Title will always indicate a technical description of the property, its exact location and its boundaries. It would help if you can tap the services of a Geodetic Engineer or a Licensed Surveyor. You can request that such professional verify the accuracy of the land being described and, if possible, make conduct a re-survey of the land.

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“Tips on Buying Titled Real Estate In The Philippines” is written by Carlos Velasco.

Land Title : How To Register and Transfer It In Your Name As The Real Estate Buyer

by Pag-IBIG Financing Admin

When applying for a Pag-IBIG Housing loan, only two things can happen: Your loan application is either approved or disapproved.

Once your loan application is approved, the real work is just about to start. The most important, and tiring process here, is the registration and transferring of the Title in your name as the buyer of the real property – whether it is a lot-only property, a house and lot, a townhouse or a condominium unit.

Depending on the kind or property that you are buying the Title here can mean any of the following:

The Certificate of Land Title, which is also known as the Transfer Certificate of Title (TCT)
The Condominium Certificate of Title (CCT)

Title Registration and Name Transfer

Sample Land Title in the Philippines If you are buying a new property from a real estate developer, or through its marketing arm, they should be able to assist you in the registration and transferring of title in your name. This is one of the advantages of buying from a developer instead of purchasing a property from an individual seller, where the burden of registration is placed on the buyer.

Of course, you can always opt to register the property by yourself, if that’s fine with you and you don’t mind going through the whole process. Again, as already mentioned, if you are buying from an individual, you have to do the legwork of title registration.

In any case, we have outlined below the series of step you need to take to be able to properly register the Title of the property and have it in your name.

STEP 1: Get A Certificate Authorizing Registration

Go to the office of the Bureau of Internal Revenue (BIR)
Once you are at the BIR, present the Deed of Absolute Sale (DOAS), and Loan and Mortgage Agreement (LMA)
Request for the computation of the Documentary Stamps and Capital Gains Tax.
Then proceed to the designated bank and pay for the Documentary Stamps and the Capital Gains Tax. (Usually this is the Land Bank of the Philippines.)
Go back to the office of the BIR and your Bank Receipt
Finally, request for the issuance of Certificate Authorizing Registration (CAR)

STEP 2: Request Issuance of New Title

Proceed to the Registry of Deeds and present the following documents: DOAS, CAR and LMA.
Pay transfer tax and registration fees
Request for the following:
- Issuance of new Title under buyer’s name with proper annotation
- Certified true copy of new title (owner’s copy)
- Certified true copy of new title (RD’s copy)
- DOAS stamped received, LMA stamped received

STEP 3: Pay Tax Declaration

Proceed to the Assessor’s Office
Present the new Title with your name
Pay for the issuance of the new Tax Declaration under the buyer’s name
Secure a copy of the new Tax Declaration

Take note that the steps just presented are just a part of whole Housing Loan Application Process — probably up to the loan approval stage but prior to the release of the loan proceeds. After you are done with Step 3 above, which is the most critical and time-consuming of them all, you have to go back to the Pag-IBIG Fund office or branch that approved your loan application. Present all the necessary documents required for the release of the loan proceeds.

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This article on Title Registration is written by Carlos Velasco.

When Is The Right Time To Buy?

by Pag-IBIG Financing Admin

“Please let me know the document requirements for buying a property and using Pag-IBIG Housing Loan. I want to buy my first home when I go back to the Philippines for my annual vacation leave.”

That’s taken from a letter sent to us by an OFW visitor. Most probably, you too are on the same boat. That is, you want to take advantage of your time in the Philippines to look for a property to buy – or, invest as what the real estate dealers would want you to believe.

(Quick Check : Document Requirements for Pag-IBIG Housing Loan)

December is fast approaching. Nothing beats celebrating the Christmas seasons in the Philippines. And when you come home in the country, you will definitely see a lot of offers to buy a house or condo.
Should you bite the offer?

Is December the right time to buy a piece of property?

Many savvy real estate investors believe that there is such a thing as the right time to buy real estate. We’ll discuss some of them in the following lines.

Buy At the Buyer’s Market

Lacking access to the right information, not many Filipinos are aware of the two kinds of real estate market conditions:

Seller’s Market – There are more buyers than available properties in the market. Sellers, of course, are happy with such conditions. For anyone who is into build-and-sell business, this is the time for celebration.
Buyer’s Market – There are more properties for sale than there are buyers who would take them. Rush Sale, Discounted Offer, Low Down… these signs will be all over the place. Unfortunately, the buyers are not biting the offer.

Sounds like the Law of Supply and Demand in your Economics 101?

It’s a universal law the affects real estate as well.
A good advice worth remembering: “Buy when everyone is selling. Sell when everyone is buying.”

Buy Low (Sell High?)

Most real estate investors operate with this mindset: “Buy. Hold. Sell.”

real estate market philippines It works this way: They buy a piece of property, which is usually in a form of subdivision lot that is to be developed in some future time. Hold it for a couple of years or so, while waiting for the subdivision project to be completed and properly developed. Sell high at the current market price, which is usually higher than the cost of acquiring the property.

Buying low and then selling high leads to profit, right? This technique is sometimes referred to as real estate speculation. There could be inherent dangers with this approach, but for most investors who know what they are doing, this one works.

But even if you are not into buying and selling real estate for business, there is some wisdom in buying at a low price. If one is available and you think it is a good deal, go for it. There is nothing wrong about getting more for less.

Buy When You Are Ready

Forget about real estate investment techniques and all.

Real estate brokers and agents are crazy people. In a down market, they would say, “Now is the right time to buy while the price is still low.” When prices are rising they would say, “Buy now before the price goes even higher.” For them, it’s always time to buy. Why not? That’s their job. After all, they are licensed to do it.

It’s time you tell them to shut up.

This one had to do with good old common sense… and very useful at that.

Buying when you are ready means:

Your employment or business is stable. This is very important. Don’t buy a property if your employment or business is a little shaky. That’s why we have been advocating that you forget about asking if paying 24 monthly contributions to the Pag-IBIG Fund is enough to get a loan. There’s more to the getting a Pag-IBIG Housing Loan than just your contributions. Your employment track record and salary play an even bigger role.
You have saved enough for the down payment. So you think you can afford to pay for the monthly amortization on the house you are eyeing to buy? After all, Pag-IBIG allows you up to 30 years in loan term and you are eligible for that. Wait until you see the down payment. Remember, this is one area which you should prepare too.
You can afford to pay the loan. Make sure that the scheduled monthly amortization on your loan is not too much of a drain on your budget. Remember that you have other expenses too.
You are sure about the property you are buying. Owning a home entails a lot of responsibilities. Sometimes renting is even more beneficial than just buying a home. Make sure that you know the differences. Get your priorities in order. As a general rule, ask yourself if you will be staying in the property for five years or even longer. If the answer is yes, you are better off buying.

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“When Is The Right Time To Buy?” is written by Carlos Velasco.

Housing Loan Preparation: How To Flex Your Financial Muscle

by Pag-IBIG Financing Admin

“Get your finances in order.”

You have probably read that statement several times on different pages of this website. Usually, it is the response we give to visitors who are asking for guidance on how to get, and eventually be approved for, a housing loan from the Pag-IBIG Fund.

The phrase is very brief but it means a lot of things, which I will attempt to elaborate here in details.
Essentially, I’ll be talking financial talks that relate to the following topics:

Employment or Business Track Record
Level of Income
Credit History

That’s it — just these three things are enough to help you flex your financial muscles so that you’ll be ready to face your loan officer. If you get them right, you’ll be smiling for making such a preparation. And take note, the same concept is applicable also to any loan application from any financial institution like the bank and credit cooperative.

Okay, let’s take them one by one.

Employment or Business Track Record

Quite simply, this is revealed by such question as, “How long have you been in business or in your current work or profession?”

The answer to this question is very important to the lending institution because it tells something about the stability of your income.

There are many ways a private lending institution can get a handle of this information. Depending on your source of income, some banks will be asking you the following:

Your contract of employment — with stated terms of contract and salary
Remittances in the Philippines (For OFW)
Bank Statements
Financial Statements for the past 2 years (for businesses)

Pag-IBIG Housing Loan Preparation Checklist In the case of Pag-IBIG Fund, one of the ways they can check this is by simply looking at your membership records with the Fund. Ever wonder why the Pag-IBIG Fund requires its members to have contributed at least 24 months of contributions? The very reason is that, they want to make sure that you have a steady source of income for the past two years. Somehow that gives them a hint of your employment record.

So the next time you are thinking about getting a loan, remember to take more time to reflect first on your employment, professional or business history. Stability in your work or line of business is the key. The longer you are in your work, profession or business, the more chances you have to being qualified for the Pag-IBIG Housing loan.

Pag-IBIG Financing Tip #1: Learn about Loan Pre-Qualification and its importance.

Level of Income

This one is very obvious. The higher your income level, the better chances of getting qualified for a housing loan, and the higher the loan amount entitlement also.

Question: If my income is P 35k per month, am I qualified for a housing loan with Pag-IBIG amounting to P 1.5 M?

Answer: Yes, but you should probably try to settle on a lesser amount of loan or strive to come up with an augmented income. Remember, your monthly amortization will also take a toll on your family’s budget. You don’t want to tie up a bulk of your expenses just paying of your home loan.

The answer to the question above is based on Pag-IBIG Fund’s Guidelines relating the income and member’s contributions to this loan amount entitlement. For more details, please check on the article entitled “How Your Income And Contributions Affect Your Housing Loan Entitlement“.

Pag-IBIG Financing Tip #2: As a general rule, you are safe if you select a loan amount and term where the resulting monthly amortization is less than 1/3 of your net monthly income.

Credit History

A borrower’s bad credit history really turns off any lending institution. Be careful about having a history of cancelled credit card because it will haunt you down once you apply for a loan from any bank in the country.

The current Housing Loan Application Form of Pag-IBIG already includes fields about the loan applicant’s credit cards. But some borrowers who have a bad credit history can simply skip on those blank items so that the Pag-IBIG staff won’t bother. But someday soon, it will become a critical part of the housing loan qualification process.

Essentially, what this means to all Pag-IBIG Fund members who want to apply for a housing loan is that, they should not make any Pag-IBIG Loan they can’t make up. Any unpaid loan you have made with Pag-IBIG can definitely affect any loan application you will make with the Fund.

Pag-IBIG Financing Tip #3: Don’t be careless even on small amount of loans. It can make or break your reputation with the Pag-IBIG Fund.