Step-by-Step Guide on How to Get a Pag-IBIG Loan
Key stats about Pag-IBIG housing loan
1 in every 4 Pag-IBIG housing loan is availed by an overseas Filipino worker
146,443 OFWs availed a housing loan from Pag-IBIG, amounting to Php131.8 billion
In 2018, Pag-IBIG housing loans grew by 16%
In 2018 also, Pag-IBIG released Php75.31 billion in housing loans
Pag-IBIG has 133 branches to date and 23 overseas posts
Pag-IBIG has a total of 13.63 million members
Being a Home Development Mutual Fund (HDMF), or simply Pag-IBIG, member has its advantages, one of which is availing affordable housing loans.
What are the Pag-IBIG housing loan eligibility requirements?
In January 2017, Pag-IBIG launched an online application process through its website. From 27 days of housing loan application process, it is now cut down to 20 days provided that you have the complete requirements.
From fourteen, the requirements are now minimized to include:
1) duly accomplished housing loan application with recent ID photo
2) proof of income,
3) one valid ID,
4) Transfer Certificate of Title (TCT),
5) updated tax declaration and updated real estate tax receipt,
6) contract to sell, and
7) the vicinity map.
The property will then be investigated including the borrower’s credit information so Pag-IBIG may be able to determine that the borrower has the capacity to pay.
Other income documents required
For locally employed individuals, other supplemental documents may be required.
1. Notarized Certificate of Employment with Compensation (CEC)
2. Latest Income Tax Return (ITR)
3. Certified one (1) month payslip within three months prior to loan application
For self-employed members, the required supplemental documents are any of the following.
1. ITR, audited financial statement, and official receipt of tax payment from the bank
2. Commission vouchers bearing the issuer’s name and contact details
3. Bank statement or passbook for the last 12 months
4. Copy of lease of contract or tax declaration
5. Other documents that validate the member’s source(s) of income
For OFWs whose many aspirations always include buying a house and lot for their families here in the Philippines, the supplemental documents are as follows.
1. Employment contract or POEA standard contract
2. CEC with the company’s official letterhead or CEC signed by the employer supported by the employer’s ID or passport
3. ITR filed with host country
Prior to loan release, another set of requirements must be submitted to Pag-IBIG. These includes:
– TCT in the name of the borrower/co-borrower or Certified True Copy (CTC) of the TCT
– Updated tax declaration and photocopy of updated real estate tax receipt in the name of the borrower/co-borrower
– Loan mortgage documents such as Loan and Mortgage Agreement (registered with Registry of Deeds), Deed of Absolute Sale (registered with Registry of Deeds), notarized promissory note and Disclosure Statement on Loan Transaction
Aside from online loan application, the borrowers may now also apply for a housing loan through its 133 branches nationwide.
In case you want to know, the interest rates of Pag-IBIG acquired properties are the lowest. It offers 5.5% for regular housing loans and 4.5% for minimum wage earners. The loan tenor is up to 30 years.
How can a borrower use the Pag-IBIG housing loan?
Pag-IBIG specifies the purposes of the loan to be availed by the members.
Purchase of a fully-developed lot within a residential area; the lot must not exceed 1,000 square meters
Purchase of a pre-owned or brand new residential house and lot,townhouse or condo unit including the parking lot,
Purchase of a Fund-mortgage property or an acquired asset
Construction or completion of a residential unit above a member-owned lot
Home improvement that aims to enhance the durability and material value of the property
Refinancing of an existing mortgage to Fund-accredited institution provided that: 1) the loan is not in default within 12 months and 2) the repayment history is at least 2 years
Combing these loan purposes is also possible. For example, Pag-IBIG allows:
Purchase of the fully-developed 1,000 square meters lot or less and construction of the residence
Purchase of the pre-owned or brand new residential unit and home improvement for such
Refinancing of a mortgage and home improvement for such
Refinancing of a lot mortgage and construction of the residence thereon
What are the steps in applying for a Pag-IBIG housing loan?
The loan can be availed through retail and developer-assisted. When we say retail, the member applies directly to Pag-IBIG. The second is self-explanatory wherein the property developer representative assists the member in processing the housing loan. Through this, the representative may pre-qualify you for the housing loan or recommend a loan structure that is within your eligibility. The steps when availing the loan through the developer is slightly different. It includes the following steps:
1) Reserve the property of your choice.
2) Pay the reservation fee.
3) Fill out the loan application.
4) Sign all the documents that the representative will give you.
5) The representative will process the loan with Pag-IBIG.
6) Wait for the confirmation and further instructions from the representative.
Afterward, the representative will guide you until Pag-IBIG takes out your housing loan.
If you are going to secure the loan from Pag-IBIG yourself, the steps are more detailed.
1) Accomplish the Housing Loan Application (HLA) and Membership Status Verification Slip (MSVS).
2) Secure a copy of the Checklist of Requirements (COR).
3) Submit the HLA with complete requirements.
4) Pay the processing fee of Php1,000 (nonrefundable).
*You will have 15 working days to do steps 1 to 4.
5) Receive the Notice of Loan Approval (NOA)/Letter of Guaranty (LOG).
6) Sign the loan documents.
7) Pay the documentary stamps and capital gains tax at the Bureau of Internal Revenue (BIR). The BIR will issue the Certificate Authorizing Registration.
8) Pay the transfer tax to your local government unit (LGU).
9) Obtain the transfer of the title and annotation of mortgage documents from the Registry of Deeds.
10) Go to the LGU for the transfer of the Tax Declaration.
11) Submit the requirements to Pag-IBIG.
*You will have 90 calendar days to do the steps 7 to 10.
**Your loan will be ready after five (5) working days.
When receiving your loan proceeds, bring two (2) valid IDs with you. The loan proceeds will be released to the borrower only unless the attorney with the SPA needs to receive it if the member cannot do so personally. Finally, you need to start paying for the monthly amortization one month from the date indicated on the check. For home improvement, the payment shall begin one month from the date on the check of the final loan release.
What are the prevailing interest rates of the Pag-IBIG housing loan?
As of January 1, 2019, Pag-IBIG follows the table of interest below based on the preferred fixed pricing period.
Fixed pricing period and Interest rate
1 year – 5.375%
3 years – 6.375%
10 years – 8.035%
15 years – 8.585%
20 years – 8.800%
25 years – 9.050%
30 years – 10.000%
You may use this table for your Pag-IBIG housing loan computation, bearing in mind that the fixed pricing period is the length of the desired lock-in rates. Anyhow, Pag-IBIG has a housing loan calculator available on its website that you can use in determining the amount that you can afford. Through this, you will be able to create a monthly amortization table. Aside from that, the free housing loan calculator can aid in evaluating how much you can borrow based on your income or the value of your property. If you have a desired amount, you may calculate what monthly income may entitle you to avail such amount.
How to pay for the monthly amortization of the Pag-IBIG housing loan?
Pag-IBIG embraces technology, evident not only through applying for a home loan online but also when it comes to paying the monthly amortization. Here are the available payment methods.
1. Over the counter (Bayad Center, SM Business Centers, MLhuiller, and ECPay)
2. Over the counter thru banks (MetroBank and LandBank of the Philippines)
3. Moneygment mobile app thru 7-11 stores
4. ECPay online thru 7-11 stores
When paying for your loan, make sure you know or have with you the Housing Account Number (HAN).
Other tips when applying for a Pag-IBIG housing loan
Prepare all the documents that prove you have a stable income source.
Improve your credit score.
Attend the Pag-IBIG housing loan program orientation.
Settle your outstanding loans first before you apply for a housing loan.
Set a realistic amount that you can conveniently afford to pay.
Pay a higher down payment if you can.
Make your spouse the co-borrower.
Pay your monthly amortization diligently.