I have received a significant number of hits on my post about my Pag-IBIG loan experience in my other blog that I decided to write about how we applied for one in this blog.
We bought our home during the last quarter of 2006. Our property is located in Cainta, Rizal and is just a few blocks away from Ortigas Avenue Ext. and a neighborhood mall. It was priced at Php 2.5 million and the price is reasonable for a 100 sq. m. house and lot. We did not apply for a Pag-IBIG housing loan right away. For one, the maximum loanable amount is only 2M. Initially, we paid the 500 thousand equity (20% of the contract price) in partial payments. The equity included the reservation fee and the in-house payments that we gave from the time we signed the contract to sell up until the third month of our stay in our new home. Our house was newly built when we moved in, by the way. The package did not include the perimeter fence and gate. We just had it built a few weeks after moving in.
So, when we found out that we have already completed paying 20% of our property's contract price, we started on applying for a Pag-ibig housing loan. We chose to apply for a housing loan under Pag-ibig because it had the lowest interest rates. The commercial banks were giving 13% to 16% interest rates on loans while Pag-ibig offered on 11% for loans of 2 million. Aside from that, we learned that should the principal borrower die or be disabled during the course of the loan, the loan is already considered paid. Commercial banks do not offer this.
We went to the Pag-IBIG office in Makati and attended a loan counseling seminar. There we learned the basics of a Pag-IBIG Housing Loan. My husband accomplished a Housing Loan Application form and Membership Status Verification Slip. The staff also gave us a list of the requirements that we and our developer will be submitting along with the forms. We paid the Php 1,000 non-refundable processing fee after that and were advised to wait for the notice of loan approval.
We submitted everythig that was required on our part and that included payslips, certificate of employment, and the copy of the contract to sell. We also paid around 53 thousand pesos for the Transfer of Title and other real property taxes. Our developer was able to submit some of the documents that were required of them. After that, we received the Notice of Loan Approval. The notice indicated that we were only granted 1.6 million pesos for our housing loan application. We had to raise the remaining 400 thousand pesos just so our developer can work on our document and file them with Pag-IBIG. Pag-IBIG will only allow our developer to take out the amount once our documents are completed. That was still in 2007.
Our developer had an administrative problem within their company and failed to submit the documents that Pag-ibig required them to submit. It turned out that they had a major renovation of their organization and the person that was in-charge of our account was fired from the company. Our documents stayed with them untouched for more than a year. In fact, it was only this April 2009 when they have finally submitted all of the required documents and took out the 1.6 million pesos that was loaned to us. In fairness to them, they took care of the loan application extension fees and processing. For more than a year, we did not pay a single cent for our home because Pag-IBIG started our first monthly amortization a month after the day our developer was able to take the money. It was our developer's loss, not ours. By the way, we had to pay around 12 thousand pesos again for another set of realty taxes and also had to issue 12 postdated cheques for the first year of our loan.
Was it a blessing in disguise that our developer was not able to complete our document immediately? Frankly, I say no. We spent so many times following up our documents with them. It was like living in a limbo. We wanted it to be settled as soon as possible because we needed to feel secure that the house we are living in will become ours once the loan is over. I only felt a little secure when I saw that the title already showed our names. We were able to save for months on amortization costs but the anxiety we had wasn't worth it. So, just a tip, choose a developer or a home contractor who is dependable should you choose to apply for a housing loan.
Starting May of this year, our home has been officially under the Pag-IBIG Housing Loan program. We will be paying 16 thousand pesos a month for thirty years for our home. We plan to have our loan restructured and shortened once our finances are more secure. For now, we feel good that we were able to enjoy the benefits of being a Pag-IBIG fund member and the fact that our loan will also give us bigger dividends when retirement comes.