Am I Qualified of a Housing Loan?

Am I Qualified of a Housing Loan?

Maybe you are renting a house right now or just living with your parents or relatives.  Maybe you are already thinking of getting your own house instead of renting. And you have asked yourself, "Am I qualified of a Housing Loan?" if ever that I wanted to get the house that I want?

We all want our own house, and I will be discussing here some of the criteria whether you are qualified for a housing loan or not and other course of action that you can do if ever that you do not qualify of the house you want to purchase.

For a Housing Loan, one of the major qualification is the capacity to pay which is evidenced by the proof of income i.e. contract of employment/payslip.

For a Pag-IBIG housing loan, here are the basic qualifications;

In addition to this, there is a required income needed on the part of the Buyer for the property he/she is about to buy.

Note: the interest rates here are from the old Pag-IBIG guidelines, these figures are presented only to give idea on the buyer how much is the required income needed on his part.

As seen above, if your housing loan is P500,000 and you want it to be paid in 5 years, you need to have at least P28,956 monthly salary to be qualified.

Or we can compute it this way:

A.)For loans up to P1,250,000 - 35% of your Gross monthly income should be more than the monthly amortization of your housing loan.

Example:
Housing Loan Amount- P900,000
Monthly Amortization - P6,680
Required Gross Income - Should be at least P19,085 (P6,680/35%)

B.) For loans over P1,250,000 - 30% of your Gross monthly income should be more than the monthly amortization of your housing loan.

Example:
Housing Loan Amount- P1,300,000
Monthly Amortization - P9,500
Required Gross Income - Should be at least P31,666 (P9,500/30%)


In cases where your income is less than the required income, one course of action is to have a co-borrower or increase the Downpayment for you to qualify. Pag-IBIG allows tacking of loan of up to three (3) members.

For Bank or In-House Financing, same concept as Pag-IBIG applies.  

I hope that this article helps you understand on the qualification of having a Housing Loan.


Regards,


Ralf Roger Tagao.
Certified Public Accountant
Real Estate Broker

How Much Can I Borrow for a Pag-IBIG Housing Loan?

How Much Can I Borrow for a Housing Loan?

Pag-IBIG Fund now offers up to P6Million housing loan. On the Borrower's standpoint, maybe you're asking how much you can borrow from Pag-IBIG.  It is not automatic that you can borrow a certain amount in Pag-IBIG, there are certain criteria that will determine how you can borrow. 

The Loan amount shall be based on the lowest of the following:

1.) Actual Need

Actual need is usually the value or price of the house you are about to purchase.  If your purpose is to borrow to finance your house construction, then the actual need is the construction cost. If it is for refinancing the old outstanding housing loan, then the outstanding balance of the loan.

2.) Capacity To Pay

Capacity to pay is the ability of the buyer to pay for the monthly amortization of the housing loan that he/she has taken.

In every housing loan, there is a corresponding required Gross income needed to qualify for the loan.

Gross income is being computed as follows:

A.)For loans up to P1,250,000 - 35% of your Gross monthly income should be more than the monthly amortization of your housing loan.

Example:

Housing Loan Amount- P900,000

Monthly Amortization - P6,680

Required Gross Income - Should be at least P19,085 (P6,680/35%)

B.) For loans over P1,250,000 - 30% of your Gross monthly income should be more than the monthly amortization of your housing loan.

Example:

Housing Loan Amount- P1,300,000

Monthly Amortization - P9,500

Required Gross Income - Should be at least P31,666 (P9,500/30%)

3.) Loan-to-Appraisal Value ratio

The loan to appraisal ratio is determined by multiplying a certain percentage on the appraised value of the property.  Pag-IBIG fund has already a team of Appraisers that estimate the value of a certain house and lot or property.

The lowest value on these three (3) basis will be the value of loan that the buyer/borrower can borrow.

Please note that for cases that the gross income is not sufficient to cover the monthly amortization, Pag-IBIG has the "tacking provision" wherein 3 maximum Pag-IBIG members can be co-borrowers.

I hope this blog has given you idea on how much you can really borrow for a Pag-IBIG housing loan.  If you like this article, I appreciate if you can share it to others.

If you're looking for affordable house and lot in bulacan, feel free to contact us. We will give you the best assistance to you.

Regards,

Ralf Roger Tagao,

Your Licensed Real Estate Broker/CPA

Top Reasons Why Choose Pag-IBIG Housing Loan over Banks

Top Reasons Why Choose Pag-IBIG Housing Loan over Banks

These are the lists that I believed Why Choose Pag-IBIG housing loan over Banks

1.) Longer terms of up to 30 years

Pag-IBIG has the longest terms of housing loan of up to 30 years. This enables the borrower/buyer to have a very low monthly amortization. We know for a fact that the lower the monthly amortization, the lower the required income will be to be approved on a housing loan.

2.) With regards to Non-payment (foreclosures)

Pag-IBIG has the longest time of foreclosures processing, most of the time they will give you a chance and consideration to still pay for your unpaid monthly payments. Unlike bank, once you have defaulted on succeeding monthly payments, their process of foreclosures is very fast.

3.) Prepayments or Advance payment of Housing Loan

For Pag-IBIG, you can make advance payments equal to the monthly amortization of your housing loan, this will be applied to the principal which later on shorten the terms of your housing loan. You can also pay all of your loan once you have money without paying pre-termination fee which is usually been charged by banks.  Also for banks, you are required to pay for the interest based on the fixing period if you will pay your loan in advance.

4.) Increase in Interest rates every fixing period

Pag-IBIG may increase the interest rates at a maximum of 2% every fixing period that the borrower has chosen during the time of loan.  For banks, it can be higher.

5.) Your monthly contribution included in your amortization earns Dividends

The monthly contribution that is included in your monthly amortization is earning dividends. This is one of the advantages that Pag-IBIG is giving to its members.

6.) Minimal processing Fee as compared to Bank charges of an average 3% of Loanable amount.

House Buying Procedure

House Buying Procedure

This is the normal Step by Step process in owning your First home.


Step  1 – Contact Us thru email, chat, text or call.

Inquire about the project and model house price, location, payments computation etc.

Step  2 – Schedule your Tripping/House Viewing

Get a date. You may bring a xerox copy of Buyer’s ID, one month payslip or Job Contract so it can be evaluated once you decide to buy.

Step  3 – Reserve a Unit

Choose the location of block and lot.

Fill up:

• Buyer’s Information Sheet (BIS) and
• Reservation Agreement (RA) and
• Other forms

Developer will then pre-evaluate Buyer’s capacity to pay base on payslip, ID, Job Contract or Latest financial statement.  If capable, you may now pay the reservation fee.

Step  4 – Buyer’s Appearance

You or authorized representative (Atty-in-Fact) must appear in person at Developer’s office in for counseling and briefing within seven (7) days from reservation date.

Note: This may or may not applicable to other Developers

Step  5 – Submission of Requirements

Submit requirements within 30 days from reservation date. If some document  is not available, you must inform the office.

Step  6 – Pay your Monthly Downpayment or Equity

Follow the schedule of due dates of your down-payment given during reservation.


Step  7 – Loan Processing

Processing of loan is done after downpayment or equity term. Estimated process time is 3-4 mos., depending on status of house construction.  For Pre-Selling, it might be longer depending on the scheduled turnover of the house.

Step  8 – Loan Take-Out

Your loan is taken-out and payment will be released by Pagibig or Bank. Developer will inform you of loan take-out and guide on the next steps.  Payment schedule of monthly amortization and house inspection will be given.

Step  9 – Inspection

During inspection, check if house is ready for move-in.  If there are minor repairs or retouch , another re-inspection date will be set until house is acceptable.

Step  10  – Move-in

Finally your own new home.  Congratulations!

What Are The Requirements for Pag-IBIG Housing Loan?

What Are The Requirements for Pag-IBIG Housing Loan?

Most of the First Time Home Buyers asked questions about requirements of a Pag-IBIG Housing Loan.

The following are the personal requirements of Principal Applicant, Spouse and Atty-in-Fact for Locally Employed, Self-employed and OFWs.

Also, some Pag ibig documents that must be signed and to be submitted together with the requirements.

Personal Requirements

• 4 pcs. 1 x 1 ID picture
• Photocopy of Birth Certificate (if single)
• Photocopy of Marriage Certificate (if married)
• Photocopy of Death Certificate (if widow / widower)
• Proof of Billing Address (MERALCO, PLDT, Water Bill, etc.)
• Certificate of Tenancy & Valid ID of Landlord (if renting)
• 2 Valid ID with Signature (Government issued)
• Approved Membership Status Verification Slip (MSVS)
• Special Power of Attorney and Valid ID of Atty-in-fact (if any)
• Residence Certificate/ Cedula (photocopy)
• Postdated Checks (Downpayment & Monthly Amortization)

For locally employed, please add these:

• Certificate of Employment and Compensation (Notarized)
• Latest Income Tax Return (ITR)
• Latest 2 months Payslip
• Service Record (if government employee)
• Copy of latest Pag-IBIG ESAV with at least 24 mos. contribution

For Self-Employed, please add these:

• Business Permit / Mayor’s Permit
• DTI or SEC Registration
• Audited Financial Statement (last 1 year)
• Income Tax Return (ITR) (last 1 year)
• Proof of Tax Payment
• Secretary’s Certificate (if any)

For Ofw, please add these:

• Job Contract (Authenticated by POEA) with English translation if in foreign language)
• Certificate of Employment & Compensation (Consularized) – if no Job Contract
• Proof of Remittance (last 3 mos.)
• Photocopy of Passport
• Special Power of Attorney (Consularized)
• Copy of latest ESAV with at least 24 mos. contribution
• Other Proofs of Income, whether original or photocopy, shall be duly validated and certified/initialed by Pag-IBIG Fund Information Officer assigned in the country where the member works.

For Atty-in-Fact (Authorized Representative)

• Latest ID Picture
• Residence Certificate (photocopy)
• 2 Valid IDs (Government issued)
• Tax Identification No. (TIN)

Loan Documents From Pag-IBIG

• Pag-IBIG Housing Loan Application
• Disclosure Statement on Loan Transaction
• Preliminary Loan Counseling Questionnaire
• Medical Questionnaire (if buyer’s is over 60)
• Certificate of Acceptance
• Conformity to Assignment of the Contact to Sell
• Contract to Sell (CTS)
• Deed of Assignment with Special Power of Attorney (DOA)
• Deed of Absolute Sale (H4-74 and H4-75)
• Promissory Note (PN)
• Loan and Mortgage Agreement (LMA)
• Deed of Restriction
• Conformity
• Certificate of House and Lot Acceptance and Completion (CHLA)
• Specimen Signature

I am not a Pag-IBIG Member, How Can I avail a Housing Loan?

I am not a Pag-IBIG Member, How Can I avail a Housing Loan?

"I am not a Pag-IBIG Member, How Can I avail a Housing Loan?" This is the question that I always encounter of those interested in our affordable house and lot in Bulacan.  Most of them are OFWs who are working abroad to provide the needs of their family and eventually buy their own house and lot.

My response on their concerns is that they can still avail the Housing Loan thru Bank or In-house Financing or they can sign up as a Pag-IBIG member. Let us discuss here the three (3) Financing options available to the buyers.

Bank Financing

Bank financing allows you to get lower rates as compared to Pag-IBIG and In-House Financing. However, Bank offer shorter terms as compared to the 30 years that Pag-IBIG is providing.  Also, Bank will charge you with a bank fee which is usually 3% or more depending on the bank. 

In-House Financing

The Developer offers In-House Financing to cater those buyers who have problems with documentation.  The interest rate for In-house is doubled as compared to Bank or Pag-IBIG.  This is for the reason that the Developer is the Seller not a Financing institution.  More often than not, we do not recommend In-house Financing as Bank and Pag-IBIG is more favorable to the Buyer.

Pag-IBIG Financing

Pag-IBIG Fund is a government agency that provide housing loan benefits to its member.  In the Philippines, a locally employed or self-employed individual are required to be a Pag-IBIG member. OFWs are also mandated now to be a member under Pag-IBIG Overseas Program (POP). As members, you can avail a housing loan provided you are already qualified to get one.

Qualifications include, a Filipino Citizen, member of Pag-IBIG with updated monthly contribution and at least have 24 months of total contributions already.  As of now, if you're not yet a member of Pag-IBIG, and you want to avail of the housing loan to buy an affordable house and lot in Bulacan or other areas.  What you should do is just apply for a membership.  You can now pay the 24 months required contribution in lump sum payment (1 time payment).

I hope that this article helped some who have concerns on their Pag-IBIG membership.

If you have queries, feel free to contact me, Mr. Ralf Roger Tagao, a CPA and Licensed Real Estate Broker.  You can refer to our Contact Us Page.