Tips and Traps

When Is The Right Time To Buy?

“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.

Forget About That Dream House, Buy A Functional House Instead

by Pag-IBIG Financing Admin

Have you ever entertained that thought of buying a home of your own?

If not yet, beware! It’s one of those nasty things that could give you sleepless nights… next only to Facebook.

From the design of the house and the size of the lawn, to the number of rooms and the kind the furniture to buy, we all want to have the best house as much as possible.

Large lawn with a nice garden, a 3-car garage, a relaxing view of the city, friendly neighborhood, spacious living room, sound-proof entertainment room for the guest, large kitchen for the chef in you, close to downtown, and finally just within budget.

There’s just one problem: You can’t have it all – especially if you factor in the money, money, money.

A Dream House Is Good, But…

Whether you like it or not, everything comes with a price. If you want to have a high life and experience the most luxurious living on earth, you have to be ready to pay for it.

Want to buy your dream house?

Sure! But first, wouldn’t it be nice if you reach the level of income that you have been dreaming about?

A Functional House — Your First Home To Call Your Own

house plan - bungalow The wise buyer keeps everything in proper perspective. You want to be able to enjoy living in your house with your family so that eventually you can call it a home. And at the same time, you don’t want it to be too much of a drain on your finances.

Of course that’s possible. But first you need to wake up from dreaming about your “dream house”. Getting a reality check and thinking about owning a functional house that fits your needs and your budget is far more rewarding.

Second House As Dream House? Yes, Way!

Forget about that dream house, especially if you are just buying your first home. You can always buy that dream house later, or get to build a custom-designed one, once you are able to afford it.

First things first: you need a functional house.

To this end, let the following tips guide you along the way.

Tip #1: Your Budget — Buy A House That You Can Afford.

That means you have to work on your budget. If you are like most real estate buyers, you would probably need a housing loan to purchase the house. Thanks to Pag-IBIG Housing Loan, that should not be a problem.

You need to determine how much you can comfortably set aside each month and send it to the mortgage company – that’s the Pag-IBIG Fund or your favorite bank. A good rule of thumb to follow is that, your monthly amortization should not be more than one-third of your gross income. If you want to be really safe, use Net Income instead of Gross Income — that’s even better. If you are a two-income family, it’s best if you can use just one income to cover the monthly amortization expense.

It may come as a surprise to you, but one of the mistakes made by real estate buyers is buying a house they cannot afford.

Yes, you read it right. It’s possible to buy a house that you can’t afford. And that involves being dishonest about your income and finances. But sooner or later, it’s this kind of buyer who eventually winds up eating the dust and losing the property. Avoid this kind of trick as much as possible.

Tip #2: Location – Accessible, In Good Neighborhood.

Did you know about the top three most important things to consider when buying or investing in a real property?

It’s location, location, location.

That’s called hammering it down your head. And I hope, you’re getting it so far.

A good location is one that is highly accessible to public transportation. This is especially true if you have kids who are going to school.

Another thing to consider is the property’s proximity to the amenities and facilities of your city or town. Are there malls and recreational centers nearby? How far is it from the market?

Take note that a good location could also affect the value of the property. For example, properties that are closer to the business center tend to be priced higher than those farther down the town. You need to strike a balance between this and the budget that you set.

Above all, is the neighborhood safe and flood-free? Buying in a good neighborhood is one of the keys that determine whether your property will go up or go down in value.

Tip #3: House Features and Specifications – Must Be Functional

What is a functional house? Only you have the right answer to that one. After all it has to do with your needs and of those people who will be living there.

Before you even begin taking a look at a house, consider that you have the following nailed down on your list:

the number of bedrooms
the number of bathrooms and toilets
car park
single-storey or two-storey?

That’s the basic. You could go on and on with the list — things like the hot and cold shower, built-in cabinets, fancy faucets, etc. Of course, the more you have those, the more price add-ons you can expect. You need to decide at the onset if those things are necessary upon move in or you can do away without them and just have them later on when you are already living in the house.

The best part about following the suggestions above is that you get to enjoy the house and have a peace of mind knowing that you have invested on the right thing.

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“Forget About That Dream House, Buy A Functional House Instead“ is written by Carlos Velasco.

I Won PhP 850,000 in Pabahay ni “Binay” and You Too Can

by Pag-IBIG Financing Admin

Yes, you too can…

…get scammed if you are not very careful.

Let me explain.

I was supposed to be feeling lucky this morning.

The first text message I got was from a friend saying, “Thank You.”

What a lovely day! This is the kind of SMS message I’d like to read first thing in the morning, every morning. I could not be more happy than that.

A single round at the toilet and a quick tooth brush later, then… beep, beep — the Android kind of beep.

Oh, I have a new message.

The second message was an appeal to the greediness in me. The text message goes this way

D/MILLIONAIRE’S CLUB OFFICE OF THE PHILS., nforming u dat ur cel# Won!, in PABAHAY NI “BINAY” 2011!, Worth, Php850,000, DTI-NCR permit# 1603s11, Pls.call me now!!..I’m Atty. VLD.

Note: I intentionally put only the initials of the lawyer’s name (that’s VLD) used by the sender to protect his identity and reputation. I have not heard of the lawyer’s name before I personally believe that the scam artist could be using someone else’s name for obvious reasons.

The message was sent using this number: +639067546784.

I have no reason to apologize exposing that number publicly on this high-traffic website. Whoever you are, shame on you!

Obviously this is scam attempt that has gone high tech, using cellular phones. By the time this article is posted on the website, it should have circulated a thousand times already waiting for its naïve victim who is apt to believe in getting something out of nothing.

Of course, nothing is free nowadays. Or, it’s best to carry that kind of mindset wherever you go.

scam money trap

These scammers might be hoping that out of the thousand messages they send, a few would actually fall prey and send them whatever they are asking, which could be

an initial deposit sent through Western Union or whatever.
a cell phone load, which is kind of funny for a member of the so called Millionaire’s Club
or your credit card information

If you care about your friend or family, please share this article to them so that at least they get warned.

Did I Get Scammed?

Of course not… I mean, not yet.

But, who knows? I could get victimized one of these days. I hope not.

This morning, I won over the scammer. I’m still feeling lucky I have my common sense intact.

So how did I know it was a scam?

Here are some points or defects that I detected from that message.

I Can’ t Win In A Raffle — Why on earth would I win in a raffle I did not even join?
D/MILLIONAIRE’S CLUB OFFICE OF THE PHIL — The Philippine Government is not stupid enough to use that kind of name in any of its agencies.
Erroneous Punctuation Marks — The message sender apparently doesn’t know how to use proper punctuation marks and therefore the whole message is Non-Official.
The cell number — This is just like any ordinary cell phone number. Big companies and government agencies are using specially reserved numbers for official notifications and correspondence.
“Please call me now!” — What? I call you? Wow, here’s a first-class jerk… a member of the Millionaire’s Club, but… he can’t even afford to give me a quick phone call to inform me that I won in a raffle, which I did not even join.

It’s possible that you, or someone you know, could be getting this kind of SMS message.

Again, please share this page to someone you care. You don’t get to see this kind of article in any place.

Another Note: This is a scam alert in general. But since it uses the name “Pabahay Ni Binay”, it gets mentioned here in this website, which is primarily focused on Pag-IBIG Financing. This is in line with our intention of helping our site visitors get educated about the Pag-IBIG Fund and its programs and services.

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This article is written by Carlos Velasco.