Pagibig Financing

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

Membership

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.

For Employees : How To Become a Pag-IBIG Fund Member?

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Are you a regular employee who always wonder how that Pag-IBIG deduction got in to your pay slip? Or you don’t really care since it is as normal and as inescapable as the income tax?

This article shows you how to become a member of the Pag-IBIG Fund if you are an employee here in the Philippines.

Pag-IBIG Membership For Employees

Earning at least P 4,000 a month? Thanks to Republic Act 7742, membership to the Pag-IBIG Fund has become mandatory for all employees covered by the Social Security System (SSS).

That’s right, all you have to show is you are earning a minimum of PhP 4,000 and you are working in a legitimate company, then you can be a member of the Pag-IBIG Fund.

As for employees earning less than P 4,000 a month, membership to the Pag-IBIG Fund is only voluntary.

So How Do You Exactly Become A Member Of Pag-IBIG Fund?

In most cases, you don’t even have to bother about it since your employer will file your membership to the Pag-IBIG Fund and remit your contributions on your behalf.

In a perfect world, everything is taken care of. In reality, that’s not always the case.

If your company won’t even bother, you can always be in control take the necessary steps yourself. This is especially true if you are considering getting a housing loan anytime soon. You want to show them that you have “perfect contributions” and is ready to take a loan.

Here are some guidelines:

  1. Locate the Pag-IBIG branch that is nearest to your place of work. Usually, this is the regional office of Pag-IBIG Fund.
  2. Proceed to the Marketing and Enforcement Division of the concerned branch.
  3. Request for a copy of the Membership Registration/Remittance Form (MRRF).
  4. Accomplish and submit two copies of the MRRF together with the following supporting documents to the Marketing and Enforcement Division:
    • Members’ Data Form (MDF)
    • Certificate of SSS Coverage and Compliance (for the current year), if private employer
    • GSIS Certificate of Membership, if government employer

Pag-IBIG For Employers

Yes, local employers are taking part in contributing to “your membership.” That’s why some of them (the small businesses, especially) feel a little bit itchy when complying to this mandate.

A problem arises when your company is not even a member of Pag-IBIG. (And this is not uncommon for very small business outfits.) In that case, here are some guidelines for employers.

  1. Accomplish two copies of the Membership Registration/Remittance Form (M1-1).
  2. Prepare the following documents (2 photocopies):
    • SEC registration or the company’s DTI and SSS registration
    • R3 and R1A forms (SSS registration and remittance forms)
  3. Present all documents (M1-1, Registration and SSS forms) to the Marketing Division of the concerned Pag-IBIG branch office for verification (bring all originals for authentication). Secure a referral slip from the Marketing staff.
  4. Proceed to the office’s Cash Division for payment of the first monthly remittance.
  5. Submit the referral slip prepared by the Marketing staff and all verified documents to the cashier.
  6. Succeeding remittance dates shall depend on the schedule of payment of the office. Accomplished M1-1 shall serve as the remittance form for succeeding payments.
  7. Submit to the Marketing office two copies of the accomplished Member’s Data Forms (MDF) of all qualified employees to the Marketing Division on the second month after the first payment of contributions.

The names of newly-hired employees, who are covered by RA 7742, should be included in the accomplished M1-1 form and their corresponding contributions duly remitted to the Fund. The accomplished MDF of the new employees shall be submitted on the following month.

For Sole Proprietorship

  • DTI Registration
  • Mayor’s Permit/ Business Permit

For Partnership/Corporation

  • SEC Registration
  • Articles of Partnership/Incorporation and By-laws

Important Notes:

  1. The original copy of the documents shall be presented for authentication.
  2. Upon submission of complete documents, the Marketing and Enforcement Division shall issue the Payment Order Form
  3. Proceed to the Cash and Administrative Services Division and pay the 1st monthly membership contributions (MC).
  4. Upon payment, present the Pag-IBIG Fund Receipt (PFR) to the Marketing and Enforcement Division.

Summary of Pag-IBIG Fund Membership For Employees

Once you have verified your membership to the Pag-IBIG Fund, your employer should be able remit your monthly contributions (which is deducted from your salary) to the Fund since your employer also acts as a collection agent of the Fund.

Pag-IBIG Housing Loan 101

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One of the main concerns of Pag-IBIG Members is getting a Housing Loan. And why not? That is one of the privileges they can get as members of the Fund Company.

This article will address a number of those basic concerns about Housing Loan.

Who can avail of Pag-IBIG Housing Loan?

Pag-IBIG Loans are allowed only to Pag-IBIG Members who are at least two years already and who have contributed at least 24 months. Of course, there are other requirements, before the loan is finally granted, but the point is Loans from Pag-IBIG is only open to its members.

How much can I loan from Pag-IBIG?

The maximum housing loan amount that can be granted to any member is only PhP 3,000,000. So that means if the property you are considering is priced more than PhP 3M, you need to come up with some form of up-front payment (or equity) to settle the price difference virus the loan amount. Or, you may opt for another financial institution. Please refer to the Mortgage Loan Fundamentals.

What type of Real Estate or Real Estate Projects can be financed with Pag-IBIG?

Pag-IBIG Housing Loans can be used to financed any of the following:

  • Lot-Only Property — It could be a raw land or parcel of land in a subdivision development.
  • House Construction or Improvement — The residential unit should be constructed on a lot owned by the member.
  • House and Lot Purchase — New or old house with lot. If you are buying from a developer, please check with your broker/agent if Pag-IBIG can be used to finance the property you wanted to buy.
  • Refinancing Of An Existing Mortgage Loan

Always bear in mind that you can only get a maximum of PhP 3M loan and you are limited to residential projects only.

How much is the interest rate of Pag-IBIG Housing Loan?

Good question! Most buyers of real estate in the Philippines have no idea of the interest rate that comes with the loan. As a buyer, you should make it a top priority to know about the interest rate and be able to compare it to competing lenders.

(Interest rates are also discussed in Mortgage Fundamentals article.)

Luckily for Pag-IBIG Members, the interest rates are among the lowest in the market! Depending on the amount of loan, the interest runs from 6% to 11.5% per annum.