Title

Pag-IBIG Housing Loan Basics. Plus: Dividends, Lost Land Title, etc

Starting this month and every end of the month thereafter, we will be posting a set of questions we receive from site visitors — especially, highlighting the most important ones that every Pag-IBIG Fund member should know — plus, our respective replies.

If you are like them you and there is something that you want to ask about your membership, home loan, buying plans, Pag-IBIG Fund policies and processes, please don’t hesitate to send your questions by filling up the Contact Form here.

We’ll do our very best to answer your questions.

Meanwhile, on to the Question and Answer for this month of April 2014.

Subject: How Pagibig Financing Works?

I would like to buy a house and lot for 500,000 pesos, but i have 250k only. How will Pagibig help me on this?Can they pay the remaining to the seller then I will pay Pag-ibig through their terms? How does the system works?

Our Reply:

That’s a good set of questions and every beginner should try to understand the whole process of a housing loan.

Pag-IBIG can definitely help you in this area, you don’t need to have P 500k to be able to buy a P 500k worth of property. With only a small amount of your own money (Down Payment), you can acquire a much larger-valued

property by availing of a housing loan. This is called Leverage. And that is a general characteristic of a housing loan — be it from Pag-IBIG, from a bank or any other financing institution.

Some articles to help you understand:

Subject: Co-Borrowing To Purchase

Here is a set of follow-up questions from our visitor named Denice.

1. So it’s perfectly legal to loan for a lot even if I’m using the money to build the house? Because we really don’t have to spend much for the lot i.e. we’re just paying for the capital gains tax and the transfer fees.

Yes

2. How do I compute my net disposable income? Is this the same with gross less tax, GSIS (yes, I work for the government), Pag-ibig, and Philhealth? Or should I also deduct the common monthly expenses per month?

You are correct. There is no need to deduct your other expenses, since it varies greatly from one person to the other.

3. I’ve heard from colleagues that there’s another government agency for housing loans with lower interests compared to Pag-ibig. I’m sure it’s not GSIS since they’ve already stopped offering housing loans. Can you verify if this is true? If so, what’s the agency?

Hmmm… Perhaps it’s the National Housing Authority (NHA) or there is another one I forgot the name but they mostly entertain and serve only the “urban poor.” They’ll have to check the community where the property is being bought and make sure it’s that overly decorated with bells and whistles and other amenities you would expect from a high-end or even mid-level subdivision.

You’ll have to check this out yourself since I’m only speaking from what I’ve known about those agencies. I may be wrong in that area, though.

Subject : Lost the Land Title

Message :

20 years ago I purchased house and lot I and has fully paid it now with updated tax payment. I move in Japan to marry with Japanese husband so I ‘m living here with my family but on that time I lost my Land Title of my property in the Philippines. What is the procedure for inquiring and where I have to inquire a replacement of Land Title in the Philippines.

Our Reply:

You have to consult a lawyer to assist you on that one. The government office in-charge of record keeping for all Land Titles in the country is the Registry of Deeds. You may have to check where their office is located in your respective city or town.

Subject: How to Become a Pag-ibig member?

Message:

Hello.I want to know,I want to become a member,but i dont have any business.but I sell vegetables in market only.Can i become a member?And how?

Our reply:

Pag-IBIG Membership is not just limited to employees. If you are self-employed or you run a business, you can still become a member.

Here is a useful guide to give you an idea:

https://www.pagibigfinancing.com/articles/2010/voluntary-membership-to-pag-ibig-fund-the-self-employed-freelancers-and-non-employees/

To apply for your membership, you have to go to the branch, but it would help if you prepare the documents already before going there. So please read that article.

Subject: Dividends / other option

Dividend -- A way of earning money through Pag-IBIG Fund Membership. — Dividends — One way of earning money through Pag-IBIG Fund Membership

Message:

Good morning to all the staff of PAG-IBIG . I am presently working in K.S.A for the last 21 years but before I left Philippines,I worked for 11 years. I was told by one of the staff of PAG-IBIG last year when I paid my PAG-IBIG that I have paid since 1988, and I have my dividends. Unfortunately, I was notable to follow up because I was out of time

I would like to inquire if , what are my benefits that I can get or avail from PAG-IBIG?

I want to know about the dividends. I am at present building my house and about to be finished. Can I get any cash to financed my house ? Or any suggestions that I can avail? thank you so much.

I am coming home for vacation this March 28,2014 and I am from Cagayan de Oro.

Good Luck and more power to PAG-IBIG

Our Reply:

Here are three of the most important benefits available to you once you become a member of the Pag-IBIG:

1. Provident Savings:

It is here where your money grows. Each year the Pag-IBIG Fund declares dividend and distributes the money to all Pag-IBIG Fund members. Your money, the money contributed by your employer (if you have one), plus the dividends all form part of the so called Total Accumulated Value.

2. Housing Loan:

Planning to buy a house? Pag-IBIG can help you finance your home purchase.
3. Cash Loan a.k.a Multi-Purpose Loan:

To learn more, here is a good article to read: “Benefits of Becoming a Pag-IBIG Fund Member”

We apologize for not updating this website for so long already. But we do intend to keep it active as evidenced by the replies we sent to the site visitors who are sending their questions.

Again, feel free to send us your questions. Use this form to contact us.

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.

~~~

“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.

~~~

This article on Title Registration is written by Carlos Velasco.

On Collateral And The Pag-IBIG Housing Loan

by Pag-IBIG Financing Admin

Can you imagine life without mortgage loans?

To say the least, only a very few families would be living in their own homes. The reality is, most people can’t really afford to pay Spot Cash on a piece of property. Even a 2-year interest-free, installment payment is still hard on the average family’s budget.

But thanks to financing programs like mortgage loans (or housing loans), many families now enjoy having a roof over their heads while still paying the property over a series of monthly payments on a longer term.

The concept is actually very simple. Given the appraised value of the property, a lending institution can assist the buyer in purchasing the property by financing part of the price. Normally, the lending company may shoulder up to 80% of the property’s price and the borrower should be able to raise the 20% cash down payment.

See also :

Fundamentals of Mortgage Loans

The Pag-IBIG Housing Loan Process

Pag-IBIG Member Benefits and Responsibilities

As a member of the Pag-IBIG Fund, one of the benefits you can enjoy as member is becoming eligible for Pag-IBIG Housing Loan and paying it in longer periods of up to 30 years.

One of the most important things you need to understand about Pag-IBIG Housing Loan, or any mortgage loan for that matter, is that, it is a secured form of financing. This means that when you sign a housing loan with Pag-IBIG, there are two points that you need to keep in mind:

You promise to repay loan on time as set in the agreement.
You put the property as collateral to backup your pledge.

The moment you fail to pay on the scheduled monthly amortization, that’s when the Foreclosure clock starts to tick.

It’s a very stressful event and you should do everything in your capacity to contact the Pag-IBIG Fund branch where you applied for the housing loan before it’s too late.

Collateral Requirement of Pag-IBIG Housing Loan

You should already know that Pag-IBIG Housing Loan is only applicable to residential types of properties; not commercial properties.

The collateral requirement of Pag-IBIG Home Loan is very simple: A clean Title (TCT/CCT) issued by the Registry of Deeds.

Important points to remember:

The tax on the real property must be updated.
The borrower is required to submit a copy of tax receipts.

Furthermore, the following properties / Titles are not acceptable as collateral:

Free / Homestead / Miscellaneous Sales Patent Titles
Properties with Encumbrances
Properties with Liens

See the following related articles:

Income and Pag-IBIG Housing Loan Entitlement

Pag-IBIG Housing Loans And Foreclosures

Buyer, Beware

Take note of the above-mentioned list of “unacceptable collateral” because they are very important especially if you are buying from individual sellers; that is, not from developer corporations.

When buying a property, insist on getting a copy of the Title — (TCT for Lot, or CCT for condominium unit). Once you have it, verify its status at your local Registry of Deeds. Always avoid buying properties that belong to any of the three categories mentioned above.

Foreclosure properties are another type of properties you should avoid at all costs until you have educated yourself already on the whole idea. However, if you are not that confident yet, forget about all those money-making schemes they preach in Foreclosure Seminars. These properties are much more complicated and a much more painful investment than seminar experts would want to believe.

~~~

“On Collateral And The Pag-IBIG Housing Loan” is written by Carlos Velasco.

Citizenship, Land Ownership and Pag-IBIG Fund Membership

by Pag-IBIG Financing Admin

A good number of our website visitors came from Filipinos based overseas – both OFWs and immigrants. And occasionally, we also have dual-citizenship holders and former Filipinos who are certainly interested in the Pag-IBIG Fund Program. The messages and inquiries that we received from them are as varied as the different cultures they are currently in.

There is one particular question that struck our attention and we want to cover it hear simply because it many of our visitors can relate to this one and we want them to be informed about this once and for all.

The question came from R. Nunez and he said in part…

“I am a dual citizen but wish to retire early in the Philippines(Filipino/American passport holder).Can I be qualified to become a ‘Pagibig Fund’ member?”

And we replied with this:

“Please don’t make it complicated on your part. You can always use a Mortgage Loan from a Bank in your situation. That way, there is no more membership requirements and other complicated matters that go with it.”

“And yes, you are certainly allowed to own a piece of land under the Laws of the Philippines.”

(For the complete series of replies, refer to this link. )

Again, we are citing that particular inquiry because we want to elaborate further and add a few more important information for Dual Citizenship holders just like Mr Nunez and other former Filipinos as well.

Citizenship and Membership To The Pag-IBIG Fund

The right answer to Mr Nunez question is this: Yes, he is qualified to be a member of the Pag-IBIG Fund under the Pag-IBIG Overseas Program. As a matter of fact, The Pag-IBIG Fund stated that “Membership under the Pag-IBIG Overseas Program (POP) shall be open to all Overseas Filipino Workers (OFWs) with valid visas or employment contracts. Likewise, it shall be open to Filipino immigrants and to Filipinos naturalized in other countries.”

IMPORTANT UPDATE:
The Home Development Mutual Fund (or simply Pag-IBIG Fund) has changed the rule requiring OFW’s to become members of the Pag-IBIG Fund. In other words, the Pag-IBIG Overseas Program is only optional for the OFW’s, because they are now required to become regular members of the Pag-IBIG I.

For more information on the Pag-IBIG Overseas Program, please refer to the following links:

Citizenship and Land Ownership

dual passport -- Philippines and England It is a well known fact that land ownership in the Philippines is granted only to Filipino Citizens and Philippine Corporations with at least 60% interest by Filipinos.

Foreign Nationals are definitely not allowed to own. Most of them simply put the Land title in the name of a Filipino whom they can trust such as the spouse. Or it could be that they are on a long term lease-contract with the land owner.

As for the former Filipinos who are already naturalized in other countries, the Law of the Philippines still allows them to own a piece of land, but with a few limitations.

If this describes you, take note of the following restrictions.

Land must be used for residential or business purposes only.
Limitation on Residential land:
1. maximum of 1,000 sq meters of urban land
2. or one (1) hectare of rural land is allowed
Limitation of Land intended for business use:
1. maximum of 5,000 sq meters of urban land
2. or three (3) hectares of rural land
You can only get either urban land or rural land, but not both.
A maximum of two (2) lots not exceeding the maximum limit in total combined area is allowed. Lots must be located in different cities or municipalities.

As for the Dual Citizenship holders (one citizenship being a Filipino) the Law of the Philippines still allows you to own land in your name just like any Filipino National.

~~~

Citizenship, Land Ownership and Pag-IBIG Fund Membership is written by Carlos Velasco.

Pag-Ibig Housing Loan Requirements

by Pag-IBIG Financing Admin

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

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.

~~~

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

NOTE: Due to a large number of comments on this particular article, any new comment are not allowed anymore.