PAG-IBIG HOUSING LOAN
THE TOP TIPS
A Pag-IBIG Housing Loan application isn’t as easy as it sounds, though. Neither is getting an approval for the loan. It will take so much of your time, energy, and even money to comply with all the eligibility and documentary requirements.
If you plan to finance your new home through Pag-IBIG, you must understand its basis for making lending decisions. A Pag-IBIG housing loan approval, as well as the amount to be loaned, will depend on a borrower’s capacity to pay, requested loan amount, actual need, and loan-to-value ratio. To evaluate them, Pag-IBIG conducts background, employment, and credit checks.
Settle Any Overdue Pag-IBIG Loan Payment
Do you have an outstanding loan with Pag-IBIG? Any missed payment can ruin your chance of getting approved for a new loan. Specifically, Pag-IBIG declines housing loan applications from borrowers with unpaid multi-purpose loans or foreclosed/canceled housing loan accounts with the agency. So, check your existing Pag-IBIG loan accounts, if any, to know if you’ve missed a payment. Make sure to pay off any outstanding loan before you apply for a new housing loan with Pag-IBIG.
Keep a stable source of income
Thinking of quitting your job? Consider the impact of
resignation on your Pag-IBIG housing loan application. Job hopping will
only hurt your chance of getting approved for a housing loan—more so if you
switch to a lower-paying job or a career with irregular income.
Pag-IBIG will check your employment history to assess if you’re financially stable enough to handle all your monthly mortgages. Your employment tenure proves your income stability. Ideally, you have a steady income source for at least two years.
Apply for a Realistic Loan Amount
Pag-IBIG has a housing loan affordability calculator that computes how much you can borrow and pay in monthly amortization based on your income, your chosen loan term and fixed pricing period, and the estimated value of the property you want to buy. The Pag-IBIG housing loan calculator is also useful if you want to know the required gross monthly income for the amount you want to borrow.
Consider Getting a Co-Borrower
Is your income insufficient or unstable to qualify for a loan? Having a co-borrower or co-maker with regular employment and excellent credit history will help you improve your chance of getting a Pag-IBIG housing loan approval. Pag-IBIG allows two or three members (including the principal borrower) who are up to second-degree relatives to apply for a single housing loan. This means you can partner with your spouse, sibling, parent, in-law, or cousin whose income will be added to yours to better qualify for a Pag-IBIG housing loan.
However, be careful when asking someone to sign a loan with. Not everyone in the family will agree to be responsible for any unpaid debts you make. It’s best to get a co-borrower whom you’ll share the new home with and who’s genuinely willing to help you out.
Make a Higher Down Payment
Before you apply for a housing loan, save up enough money for the equity or down payment, which is at least 20% of a property’s value. You can pay a larger amount to lower your loan-to-value ratio, monthly mortgage, interest rate, and loan term, raising your chance of a Pag-IBIG housing loan approval.
Make Sure Your Income Document Reflects All Your Earnings
Your Certificate of Employment and Compensation (CEC) can make or break your Pag-IBIG housing loan application. This income document, which shows your gross monthly income and other monetary benefits, proves your capacity to pay. Your CEC must contain accurate and updated information. For instance, if you’ve recently got a raise, it should indicate your latest monthly salary. If you’re receiving de minimis benefits or non-taxable allowances, request your HR manager to include those figures as well.
Consider Buying a Lower-Priced Home
You might fall in love so much with a property’s beautiful design and a prime location that you overlook its price relative to your income. Don’t get too blinded, lest you make that common homebuyers’ mistake.
Remember: your priority is to finance your new home through a Pag-IBIG housing loan. You won’t get the loan approval if you’re aiming to fund an expensive three-bedroom condo when you can afford a modest townhouse. Even if you purchase a property that doesn’t fit your idea of a dream home, you’ll sleep better at night knowing that you have a roof over your head and still can afford to pay your monthly amortizations.
Apply for the Affordable Housing Loan Program If Your Income is Low
If you’re earning PHP 15,000 or less per month, it’s hard to qualify for most home loans in the Philippines, even the regular Pag-IBIG housing loan. But fortunately, you may qualify for Pag-IBIG’s affordable housing loan program (AHP) that caters to low-income and minimum-wage earners. For the first five months of 2018, more than 10,000 minimum-wage and low-income earners have already availed of this low-cost house financing scheme.
Filipinos with a monthly income of up to PHP 15,000 in Metro Manila and PHP 12,000 in the provinces may avail of the AHP. It has a 3% annual interest rate for the first five years of the loan term. You can borrow up to PHP 450,000 under the AHP.
Check Your Credit Report and Improve Your Credit Score
Your credit history will make a huge difference in your
housing loan application. Any delinquency in your credit card and loan payments
is a red flag to lenders. If you have a bad track record of repayments, you’re
less likely to get approved for any loan.
Review your credit report at least a year before applying for a Pag-IBIG housing loan. This will give you enough time to correct any errors and improve your credit score. You can access your credit report through the Credit Information Corporation or one of its accredited credit bureaus. Simply present your valid ID to get a free copy once a year.
Attend a Pag-IBIG Housing Loan Programs Orientation
Although it’s no longer compulsory for borrowers, the government agency still conducts free seminars to orient anyone who’s interested in applying for a Pag-IBIG housing loan. Make time to attend the Housing Loan Programs Orientation—it’s a great opportunity to learn everything about the Pag-IBIG housing loan straight from an insider. You can get an instant response to your questions and concerns.