Are you looking for how to loan in pag ibig then this article is for you with all the necessary information about how to loan in pag ibig.
The ownership of a home is an accomplishment which anyone can take pride in. For those who own homes, it’s an indicator that they’re financially secure. For others it’s a way to show status. Even with the constant swarm of issues triggered by COVID-19 More Filipinos were looking for opportunities to buy a home in the past year, resulting in the Pag-IBIG Fund offering PHP 1.25 billion of loans for housing. [1]
Real estate is a major investment that can cost a lot of money. The process of purchasing a property can be a bit complicated. Did you know that purchasing the home you want can be made easier by using a Pag-IBIG home loan?
With rates as at 3%, and terms for repayment of up thirty years. home loan is among the most accessible and affordable home finance options within the Philippines.
If you’re considering applying for this loan We’ve put together basic guidelines that cover the basics of the program, as well as ways to improve your odds of being approved.
Table of Contents
How Pag-IBIG Loan Works
As per the PAG-IBIG Fund the loan for housing allows you to take out as much as PHP 6 million to fulfill one of these reasons: [2]
- Residential Lot Purchase
- Purchase of a lot and house
- Purchase of condominium units
- Purchase of a residential lot or unit (including costs for transfer of title)
- Construction or renovation of your home
- Refinancing your home loan
- The combined loan is a way to achieve
A Housing loan application from Pag-IBIG isn’t as simple as it appears, but it is. Also, getting acceptance for the loan. It’s a huge amount of your time, energy and money, to be able to meet the documentation and eligibility prerequisites.
If you’re planning to finance the purchase of your dream home with Pag-IBIG You must understand the basis of the lending decision. The approval process and the amount that is borrowed, will be contingent upon the ability of the borrower to pay, amount of loan, the actual needs, and ratio of loan-to-value. [3] To determine these, Pag-IBIG conducts background and credit and employment checks.
How Long Does the Housing Loan Processing Take?
In accordance with the Pag-IBIG Citizens Charter 2020 [44 The processing of the application for a home loan will take about twenty days to complete.
If you provide all the documentation for your housing loan Your credit will then be approved in 17 days. If the Pag-IBIG Board approves the housing loan you have applied for it releases the loan funds three days after the date you submit the necessary post-approval paperwork.
Tips on Getting Approved
Here are some other actions you can take to improve the likelihood of being accepted for a housing loan.
1. Settle Any Overdue Pag-IBIG Loan Payment
Are you in the process of paying off a loan from Pag-IBIG? In the event of a late payment, it could affect your chances of being an approval for a new loan. Particularly, the agency denies requests for housing loans from borrowers who have not paid their multi-purpose loan or foreclosed/canceled home loans in the company.
Also, check your account with Pag-IBIG for loan in case there are any to be aware of if you’ve missed payment. You must pay off any outstanding loans before the time you make an application for new home loan from Pag-IBIG.
2. Keep a Stable Source of Income
Are you thinking of leaving your job? Think about the effect of your leaving your job on your housing loan application. It will not help the chances of being approved for a mortgage, even more so if you move to a job that pays less or pursue a career that has irregular income.
Pag-IBIG will review your employment history to determine whether you’re financially stable enough to manage all the monthly mortgage payments. Your work history proves your stability in income.
Ideally, you will have an income source that has been steady for at minimum two years. The longer you remain with your employer and the longer you stay with them, the more you’ll earn. It’s best to stick at your current job when you’re considering an IBIG loan soon.
3. Check Your Credit Report and Improve Your Credit Score
Most people do not realize the significance to their score on credit until they require it. If you are unsure about this concept to you, consider your credit score as an indication of your reliability and commitment when it comes to credit and other financial obligations.
Any late payment on your loan and credit card payment, as shown on your credit report can be a red flag for lenders. If you have a poor track in repayments, as well as a low credit score is less likely to be approved for a loan.
Check your credit report for errors at least once a year prior to applying for a home loan using the Pag IBIG Fund. This gives you ample time to make any corrections and boost the credit rating. You can check your credit report by logging into The Credit Information Corporation [5or 5 or any of its credit bureaus accredited by it.
4. Apply for an Amount You Can Actually Pay Back
The members who qualify for Pag-IBIG membership can borrow the amount of PHP 6 million to finance an investment property. However, that doesn’t mean you’re not eligible. The agency will still determine if you’re eligible for the loan. The same confirmation and assessment will apply even if borrowing smaller than PHP 6 million.
Be sure to plan out the amount you’ll be able to. Be real. Take into consideration your finances and ability to pay back the loan. Do you have the funds to pay the principal and interest on your income per month?
Pag-IBIG provides a home loan affordability calculator [6] that calculates quickly how much you could borrow and how much you will have to pay in monthly amortization. The calculation is determined by your income, your selected time frame for loan, the fixed pricing period, and also the estimation of the value of the home you’re looking to purchase.
The calculator for housing loans from Pag-IBIG is also helpful if need to determine the monthly gross earnings for the sum you’d like to take out.
5. Make a Higher Down Payment
If you are able, make more for your down amount. Why? Apart from a steady source of income, having a substantial down payment can prove your financial security. It’s also beneficial for you as you’ll borrow a lesser amount from the Fund Pag-IBIG, which could mean less monthly amortizations.
Ideally, you should pay at 20 percent of the property’s worth. If you are able to pay more, that’s great. If you’re determined to make an additional down payment and you’re willing to put off your purchase, you might consider making another source of income, like part-time jobs or an entrepreneurial venture. If you’re lucky enough to receive an unexpected windfall, like an unanticipated inheritance, commission or bonus, you can use it to pay for your down amount.
6. Ensure Your Income Document Reflects All Your Earnings
The Certificate of Employment and Compensation (CEC) could determine the success or failure of your housing loan application. The income document that reveals your gross monthly income as well as other monetary benefits, proves that you are able to repay the loan.
Your CEC should include accurate and current information that is current and accurate. For example, if, for instance, you recently received an increase, your CEC should be able to show your current month’s salary. If you’re receiving benefits de minimis [7or ] or other allowances that are not tax-deductible ask that your manager in HR provide these details too.
7. Consider Applying for Pag-IBIG Affordable Housing Loan Program
If your income isn’t high it’s difficult to be eligible for the majority of loan options for home in Philippines and even for the typical home loan from the Pag-IBIG Fund.
However, you could be eligible for Pag-IBIG’s Affordable Housing Loan Program (AHP) [8] which is geared towards low-income and minimum wage earners.
For those who earn PHP 15,000 per month within Metro Manila and PHP12,000 monthly in the provinces the maximum loan amount will be PHP 450,000. The loan for housing is with a 3% interest rate over a five-year fixed period. The loan’s term will vary the most expensive monthly repayment is just over PHP 8,800, while the minimum amount is PHP 1,897.
| Loan Term | Monthly Amortization |
|---|---|
| 5 years old | PHP 8,085.91 |
| 10 years | PHP 4,345.23 |
| 15 years old | PHP 3,107.62 |
| 20 years | PHP 2,495.69 |
| 25 years old | PHP 2,133.95 |
| 30 years | PHP 1,897.22 |
8. Make a Checklist of the Requirements to Submit
Are you ready to apply for an loan? You’ll need to create a variety of documents to submit your application. In order to keep track of the document you’ve already secured as well as the ones you have to complete Create a list of all the requirements for a housing loan as well as their respective status in an excel spreadsheet.
Additionally, put all your documents into one envelope or folder to ensure everything is organized when you send the mortgage requirements to the Pag-IBIG.
Requirements for a Pag-IBIG Housing loan
- Housing Loan Application Form
- Map of the Vicinity of the property
- Additional requirements for loan purposes. For instance, if seeking a home improvement or construction loan to build your house then you must submit your Bill of Materials or Construction Cost that is executed by an engineer registered with the government or architect.
- Evidence of income
- Updated Tax Declaration or Tax Receipt
- Valid IDs
- Updated title to land
9. Bid Wisely on Properties Under Negotiated Sale
The borrower who wants to purchase properties subject to the negotiated sales ([9]) are required to submit an offer by submitting an offer to purchase inside an envelope sealed. The borrower who makes the highest bid will have the opportunity to buy the property. Pag-IBIG has a list of properties in this category, with the bidding time that you must adhere to.
The process of negotiating a bid can be thrilling, however it is something that requires a lot of contemplation. It is recommended to visit the property that is being showcased first, as the majority of houses in negotiation are constructed but they’re abandoned or require remodeling before you are able to move into.
Here are a few points to keep in mind before making an offer:
- Properties are offered in an “as is and as is” basis, meaning you agree to the current physical condition of the property.
- Offers must not be lower than the market value for property as that is set by Pag-IBIG.
Homes that are sold under negotiated sales are also available for purchase with discounts depending on the mode of payment, which you’ll specify when you place an order.
- 30% discount on cash transactions made in the next 30 days
- 20% discount on short-term availment that is payable by equal monthly payments over 12 months
- 10% discount on the long-term use of
Pag-IBIG Housing Loan Application FAQs
1. How much income per month do I require to get considered?
Pag-IBIG ensures that your monthly installment does not exceed 35 percent of your income. If your monthly payment for the loan for housing is PHP 7,700, then your income should be greater that PHP 20,000.
Determine how much you’re able to pay for monthly amortizations. In this way your budget won’t be substantially affected.
2. What should I do if I feel my pay isn’t enough?
You can try different ways to earn money. Pag-IBIG will consider all kinds of income sources, including freelance jobs. Simply submit proof of regular payments from your freelance employers over the last 12 months.
Here are the required documents that you may submit if you do not have a certificate for Employment or have a low-income:
- Commission vouchers that bear the names of the issuers
- Certified True Copy the Transport Franchise of LGU for tricycle driver and LTFRB for other public utility vehicles
- Copy of the lease contract and tax declarations to those that own rental properties
- Barangay Certificate and notarized Certificate of Engagement to owners of sari-sari retail stores and on-call maintenance personnel technicians, and the owners of mini grocery stores
3. I have loans from other banks. What effect will this have on my Pag IBIG mortgage application?
Pag-IBIG conducts credit inquiries to determine if you’re suffering from outstanding loans. Being in debt with the banks, or from other creditors won’t hinder your loan application provided that all of the loan payments can still be paid for by your income from a regular source and you’ve completed your payment on time.
4. I don’t have a minimum of 24 months’ worth of savings or contributions. What should I do to get me to qualify to get a loan for housing?
Pag-IBIG offers a lump-sum payment for contributions and savings. If you have cash in your account, you can make a single payment to satisfy the requirements.
5. Is there a maximum I’m able to take out from PagIBIG?
The maximum loan amount for a home loan amounts to PHP 6,500,000, the Pag-IBIG examines many aspects before determining the amount of loan to be granted. In addition to your actual requirement as well as your preferred loan amount and your financial capacity as well as the Loan-to-Appraised Value ratio.
Indicate the price you’re seeking and provide documents that show the cost of the property that is to be purchased or the cost for construction.
The loan amount is typically 95% for appraisals of up at PHP 1.7 million, and 90% on appraisals that exceed PHP 1.7 million.
6. Do I have to pay insurance for my mortgage?
Yes. A portion of your home loan payments will be deposited toward Mortgage Redemption Insurance (MRI) that provides fire protection insurance.
Final Thoughts
Possessing a real estate investment isn’t always easy. It’s not the case anymore, particularly due to the Pag-IBIG Fund backing your case. The application can be difficult and demanding, but you must remember the advantages you’ll get at the end of the day which include a lower rate of interest and a more convenient payment time.
If you’d like to speed up your application and have approval quickly take the above tips for a Pag-IBIG home loan in your head. It is also possible to contact Pag-IBIG staff for additional information like additional documents specifications.
If you got rejected, don’t lose hope. There are other options for financing your home in the Philippines like bank loans for housing, that you can take advantage of at affordable rates.
We hope all the above information has helped you on How To Loan In Pag Ibig and if not kindly drop a comment below.