Changes in schedule at home and in work have given me a little time to concentrate on this blog, and I’m hoping that the extra hours would allow me to answer your many questions about Pag-ibig’s housing loan.

I know there’s no way I would be able to answer each and every question as they come, considering that I’ve received over 500 queries since this blog started.

What I’m going to do therefore is compile all your queries into a Frequently Asked Questions (FAQ) list that you can browse anytime. Right now, I’m still collating all the questions that had been asked and, once that’s done, I will try to give a comprehensive answer to all of them.

I will need a few days to do all of these, so please come back now and then to check if the FAQ section is up. Thanks.

The e-payment system will hopefully make it easier for you to pay your monthly contributions.

Some overseas Pinoys have also inquired if it is possible to apply for Pag-Ibig Overseas Program (POP) membership online. There’s currently no such thing.

However, overseas Pinoys may file their application with any of the following offices:

* Pag-Ibig Overseas Program (POP) Office
* POP Overseas Offices
* Accredited Overseas Marketing Representatives
* Metro Manila and Provincial Offices

There are POP overseas offices in North America, Europe, Middle East, and Asia Pacific.

Once you are a member, paying the monthly contributions is easy through the e-payment system. The system allows POP members to pay through any remittance center or overseas branch of the Philippine National Bank (PNB).

The e-payment system, called the Overseas Bills Payment System, was launched only last month. Pag-Ibig, in a news release, said the system utilizes PNB’s overseas banking network to optimize service to Filipinos overseas.

Net disposable income is what’s left of your salary after deducting taxes, mandatory contributions to Pag-ibig and Social Security System (SSS) for the private sector or Government Service Insurance System (GSIS) for the public sector, and loan or other payments (if applicable).

Since Pag-ibig decides on the lowest amount of loan that a member may take out based on either contribution, actual need, loan-to-collateral ratio, or capacity to pay (based on the net disposable income), it is the latter factor that is usually used as basis for most housing loan computations.

The table below is a listing of net incomes and their equivalent housing loan amounts pegged on the loan terms or the number of repayment years.

(For loans over 750,000 pesos, see the rest of the Pag-ibig income table.)

If, for example, you want to take out a housing loan of 500,000 pesos, you must have a net monthly income of about 25,000 pesos if your loan term or number of repayment years is five years. You may still avail of the same loan if your net monthly income is 10,000 pesos if you choose a 20-year loan term.

Now that you know the amount of housing loan you can take out, the next step is to determine your monthly amortization. How much do you need to pay Pag-ibig Fund on a monthly basis if you take out a 500,000-peso housing loan for 5, 10, 15, or 2o years.

The table below lists loan amounts and corresponding monthly payments based on loan terms (5, 10, 15, 20, 25, 30 years).

For loans above 750,000 pesos, see continuation of amortization table.

You’re a Pag-Ibig fund member and want to acquire the house and lot or the lot where you want to build your home through a Pag-Ibig housing loan but don’t know how to go about it.

Let these easy steps published in the Pag-Ibig publication “Pabahay ni GMA” and posted in the agency’s website guide you.

1. Attend a housing loan counseling session at the Pag-Ibig Fund office nearest you.

Applicants are asked to accomplish a preliminary loan counseling questionnaire, housing loan application form, and membership status verification slip (MSVS).
Based on these documents, Pag-Ibig officers will determine if the applicant is eligible for a housing loan. Eligible applicants are then given a checklist of requirements that they must comply with before they move on to step 2 in the list.

The requirements include: certificate of employment with salary breakdown (notarized), latest 1 month payslip, Income Tax Returns (ITRs) and W2 for the last two years, photocopy of a company ID or any valid ID with signature, proof of billing, birth certificate, marriage certificate, community tax certificate, and 1×1 picture (4 pieces).

For overseas workers, the requirements are: a special power of attorney (SPA), ID with signature of person designated in the SPA, photocopy of passport (pages 1 and 2), latest job contract, and POP contribution with record book.

To know some eligibility requirements of the agency, check out Pag-Ibig’s housing loan guidelines.

2. Submit to Pag-Ibig your loan application form together with all the requirements in the checklist and pay the processing fee of 1,000 pesos. The amount is non-refundable, even in the case that your loan gets disapproved.

3. Wait for notice of approval or letter of guaranty from Pag-Ibig on your housing loan. After your loan is approved, you will need to sign loan documents at the Pag-Ibig office.

4. Proceed to the Bureau of Internal Revenue (BIR) and present the deed of absolute sale between you and the owner of the property. You will also need to submit other necessary documents like tax declaration and tax receipt or clearance for the payment of capital gains tax and documentary stamps tax and secure Certificate Authorizing Registration (CAR).

If you want to know beforehand how capital gains tax and documentary stamps tax (DST) are computed, check out this post on taxes in real estate transactions.

5. After getting CAR from BIR, proceed to the notary public and have your Loan Mortgage Agreement (LMA) notarized.

6. The next agency to visit is the Registry of Deeds where applicants will need to pay transfer tax and registration fees for the transfer of title and annotation of mortgage.

7. If you’ve taken out a loan to purchase a new residential unit or a lot where you’ve had a house constructed, you need to secure an occupancy permit from the engineering office in the city or town where the property is situated.

8. Next stop is the Assessors Office where you will need to secure a tax declaration for your property, which may be a house and lot or lot only. This is to be used as basis for your real property taxes.

9. After visiting other government agencies, you need to go back to the Pag-ibig Fund Office, armed this time with the following documents:

* Original Transfer Certificate of Title in your name which has the mortgage annotated on it
* DOAS with original RD stamp
* New tax declaration
* Updated real estate tax receipt
* Occupancy permit
* Assignment of loan proceeds

10. The second to the last step is to receive the loan proceeds that you will use to pay the seller of the property.

11. The last step is to start paying the monthly amortization base on the scheduled date.

Interest rates are at six percent for loans up to 300,000 pesos, 7 percent for loans above 300,000 to 750,000 pesos, and 10.5 percent above 750,000 and up to 2 million pesos.

As an indefeasible and imprescriptible document, a land title can neither be annulled or voided nor subjected to prescription.

Hence, a good rule to follow when acquiring property would be to buy only those covered by an original certificate of title (OCT) or transfer certificate of title (TCT).

Realtor Wilfredo G. Montuerto, who is the managing broker of the Montuerto Realty Development Corp., said during a lecture on real estate appraisal that he discourages clients from buying properties covered only by tax declarations.

A tax declaration is not a guarantee of ownership and conflicts regularly arise over properties covered only by this document, said Montuerto. Some cases of conflict involve several people having tax declarations to and laying claim on a single property.

A land without a title and whose owner can only show a tax declaration as his basis for ownership is not registered under the Torrens system.

A modified Torrens system of land registration has been in effect in the Philippines since 1903. The system at the start involved judicial confirmation and recording of real estate ownership through the Court of Land Registration.

Later on, however, the task of registering deeds was turned over to a registry of deeds created in every city and province. More information about the Philippine Torrens system may be read in the Department of Justice website’s entry on the history of the Land Registration Authority (LRA).

Even if a seller of a property can present a title, Montuerto said it is important to countercheck the document presented with existing records at the registry of deeds because there are syndicates that fake land titles.

He also advised that buyers do a “trace back” of previous title records in the title copy–verify up to 2 to 3 preceding titles and see how these were cancelled or how the change of ownership occurred, whether by les pendens or a deed of absolute sale. A les pendens annotated on the back of the title means the property has a pending lawsuit or is under litigation.

If possible, Montuerto said buyers should verify up to the mother title, which is what is known as the original certificate of title (OCT).