Pagibig Housing Loan

How To Apply For A Pag-IBIG Housing Loan

The Home Development Mutual Fund (HDMF) or commonly known as the Pag-IBIG Fund just turned 30 years old last June 11, 2008 but still it remains true to its mission of providing a shelter to call home for every Filipino through the years.

The Pag-IBIG Housing Loan Program is the institution's tool in pursuing its mission, If you are a Pag-IBIG Fund member and still dreaming of a house you can call your own, never worry you are on your way to owning that dream house after reading this article. But before I tell you about the steps in applying for the loan, you might be interested on some pertinent information about the Pag-IBIG Housing Loan Program.

Loan Purpose

The Pag-IBIG housing loan may be used to finance any one or a combination of the following:

1. Purchase of a fully developed lot not exceeding 1,000 square meters, which should be within a residential area;

2. Purchase of a lot and construction of a residential unit thereon;

3. Purchase of a residential house and lot, townhouse or condominium unit, inclusive of a parking slot, which may be: old or brand new

4. A property mortgaged with HDMF; or

5. An acquired asset which is disposed of through sealed Public Bidding or Negotiated Sale, Rent-to-Own Program.

6. Construction or completion of a residential unit on a lot owned by the member;

7. Home improvement; i.e., any alteration in an existing residential unit intended by a homeowner to be a permanent integral part thereof, which will enhance its durability and material value;

8. Refinancing of an existing mortgage loan with an institution acceptable to HDMF, provided that the loan to be refinanced is current and updated at the time of loan application; and the account reflects a perfect repayment history for at least 2 years, as supported by the borrower’s official receipts.

9. Combination of loan purposes shall be limited to the following:

   a. purchase of a fully-developed lot not exceeding 1,000 square meters and construction of a residential unit thereon

   b. purchase of a residential unit, whether old or new, with home improvement; or

   c. refinancing of an existing mortgage, specifically a lot loan, with construction of a residential unit thereon.

Borrower's Eligibility

To qualify for a Pag-IBIG housing loan, a member shall satisfy the following requirements:

1. Must be a member under the Pag-IBIG I, Pag-IBIG II or Pag-IBIG Overseas Program (POP) for at least twenty-four (24) months, as evidenced by the remittance of at least 24 monthly contributions at the time of loan application;

2. A member, whether new or with existing monthly contributions that are still short of the 24-month membership requirement, shall be allowed to make lump sum payment based on the basic monthly membership contribution rates to meet said requirement at point of loan application. Lump sum payment of membership contributions shall be considered a single contribution for the applicable month as of the payment date. Said member shall be required to pay the upgraded membership contribution rates upon housing loan approval and onwards;

3. A member who has contributed for at least two (2) years shall be required to pay the upgraded membership contribution rates upon housing loan approval and onwards;
   

4. For purposes of satisfying the residency requirement, the period corresponding to the Total Accumulated Value (TAV) applied earlier to a member's outstanding loan (offsetting) shall be considered when counting the total number of monthly contributions, provided that the remaining TAV after offsetting does not fall below the equivalent amount of 24 monthly contributions;

5. Not more than 65 years old at the date of loan application and must be insurable; provided further that he/she is not more than 70 years old at the date of loan maturity;

6. Has the legal capacity to acquire and encumber real property;

7. Has passed satisfactory background/credit and employment/ business checks of the developer and Pag-IBIG Fund;

8. Has no outstanding Pag-IBIG housing loan, either as a principal borrower or co-borrower;

9. Had no Pag-IBIG housing loan that was foreclosed, cancelled, bought back, or subjected to dacion en pago;

10. Has no outstanding Pag-IBIG multi-purpose loan in arrears at the time of loan application. A member whose multi-purpose loan is in arrears shall be required to pay his arrearages over the counter to update his account.

Loan Amount

Maximum of P2,000,000.00 Million, which shall be based on the lowest of the following: the member’s actual need, his loan entitlement and the loan-to-collateral ratio.

Loan Payment

• Over-the-Counter (OTC)

• Salary Deduction

• Issuance of Postdated Checks (PDCs)

• Auto Debit Arrangements with Banks

Collateral

• First Real Estate Mortgage (REM)

• Contract-to-Sell (CTS)

Loan Charges

A processing fee of P3,000.00 which shall be paid as follows:

1. P1,000.00 upon filing of the loan application, which shall be non-refundable if the loan is disapproved;

2. P2,000.00 upon loan take-out.
   

Other expenses such as standard appraisal fees, registration expenses, notarial and documentation fees, as well as taxes pertinent to the sale and transfer of the property to the borrower.

Now, here are the easy steps:

1. Attend a loan counseling session at the Pag-IBIG office nearest you and accomplish a Preliminary Loan Counseling Questionaire, Housing Loan Application (HLA) and Membership Status Verification Slip (MSVS);

2. Submit HLA with complete requirements. Pay the processing fee of P1,000.00 (non-refundable);

3. Receive Notice of Loan Approval/Letter of Guaranty and sign loan documents;

4. Proceed to the BIR and present Deed of Absolute Sale (DOAS) between the owner of the property and applicant for payment of documentary stamps and capital gains tax;

5. Proceed to Registry of Deeds for payment of transfer tax and registration fees for the transfer of the title;

6. Proceed to Notary Public for notarization of Loan Mortgage Agreement and annotation of mortgage with the Registry of Deeds and to Assessors Office to secure new tax declaration in the name of the applicant;

7. Secure Occupancy Permit from the Local Government Unit Engineering Office when the loan is for any of the following purposes: Purchase of Lot and Construction of a Residential Unit thereon, Purchase of a New Residential Unit, and House Construction;

8. The following documents should be submitted to Pag-IBIG:

• Original Transfer Certificate of Title (OTC) in the name of the applicant with annotated mortgage

• DPAS with original RD stamp

• New Tax Declaration in the name of applicant

• Updated Real Estate Receipt

• Occupancy permit

• Assignment of Loan Proceeds

1. Wait for the release of loan proceeds

2. Pay monthly amortization in the following month immediately following the loan release.

Buying a house? Consider how to finance it. Most banks offer mortgage loans, opening up the number of options available.

Like consumer products, bank services cater to specific needs. So, first determine what it is your really want in a mortgage loan. Would you like to invest in a house or do you just want to mortgage your existing house? Do you want predictability and security in your loan? Do you want an interest rate fixed for a certain number of years? Know what questions to ask before you jump into action.

Except for their interest rates, banks seem to offer the same mortgage services. Some institutions have lower interest rates and while those would be cheaper to maintain, it isn't the only aspect to consider.

Until they mature, home loans have interest rates re-priced annually. Often based on current market rates (treasury-bill rates plus a percentage spread), interest rates on home loads are affected by events in the country and the world. Because of the unpredictability of interest rates and the volatility of the market, home loan clients usually dread re-pricing.

To address this concern, a number of banks have introduced a "fixing" period for home loans. This fixed period ranges from two years to as long as five years, giving the borrower the convenience of being able to determine cash flow needed for his loan.

These products offer the security of maximum interest rate for the first five years, allowing you to plan ahead and budget your money. In the midst of all the uncertainty in the banking industry, a maximum rate imparts peace of mind. No matter what happens monthly payments will not go beyond what is budgeted. It is an added bonus, however, if they can go lower.

For borrowers, fixed-term interest rates eliminate anxiety as day of re-pricing draws near. It provides the security of guaranteed maximum interest rates giving the best scenario in projecting payments for a given period of time.

With products like these, having a home loan will no longer be a source of apprehension for couples and their families.