Pag-ibig Housing Loan
As I mentioned in my earlier post, there’s a few important things that are left unsaid on the Pag-IBIG official site. It’s instead discussed in the loan counseling session that you’re required to attend first. (note: I’ve read elsewhere that it isn’t required anymore. I would still attend though, because of the info shared there that might not be on their site.)
I haven’t attended myself, so I relied on two coworkers who have attended and loaned from Pag-IBIG. (I’ll post an update once I am able to attend the seminar/orientation)
The first thing you’ll need to be aware of is that their records might not be
centralized. This can be a hassle if you’ve worked in different parts of
the Philippines – or even just different cities in Metro Manila. You’ll
have to go to each branch and ask them to forward your
contributions and records to your current Pag-IBIG/HDMF branch
(the one you are loaning from; coincidentally, I’m told you’ll have to loan from the office with jurisdiction on the property you are buying).
Presumably, Pag-IBIG can tell
you where to go based on your employment history. You can call up these
offices and confirm that you have a record there. I’m not sure if the
forwarding can be requested online or over the phone, though.
You need to get your records updated as it will impact the amount you can loan. Which brings us to a few of important points…
First, the amount you can loan depends on your monthly contribution. So if you would like to loan Php1M, your monthly contribution needs to be around Php500. HDMF contributions are usually set at no more that Php100, so you’ll have to request your employer to increase it.
Second, you must pay in advance the contribution for two years when you loan. So for Php1M, you pay Php12,000 in advance.
The rest is through salary deduction.
Third, if you miss 3 consecutive monthly payments, your mortgage could get defaulted and Pag-IBIG may start the foreclosure process.
Aside form that, there’s a couple of quirky things: when you take out a loan, you pay a Php1000 processing fee. If your loan actually gets approved, you pay an additional Php2000. (Parang padulas lang, pero legit.)
Additionally, you may have read about Mortgage Redemption Insurance (MRI). If the principal borrower dies, the loan is covered in full by this insurance. (If two people took out the loan, only one can be the principal borrower. So if the secondary passes away, the loan just continues.) That’s the good news.
The semi-bad news: it’s an additional yearly premium you have to pay. The premium is also incorporated in the monthly payment.
MRI, along with other Fire and Allied Perils Insurance, the premium is prepaid upon loan take out. That means you pay the first year’s premium as you take out the loan.
So the real “bad news” is that there is a considerable upfront cost when buying a property through a loan – insurance premiums, processing fees, other fees (possibly: attorney’s fees, taxes, doc stamps, etc.) and the down-payment (since you can only loan up to
80% 90% of the total asset value).
It’s unavoidable though. The same expense is incurred through bank loans, and probably through SSS as well.
As for the other details…instead of an information dump, here are a couple of videos we can watch instead. It’s a bit dated (2012), but the details should still be correct.
Did I get something wrong? Any info to add? Let me know by leaving a comment below.
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