Do you know that you can borrow money from Pag-IBIG Fund to buy a decent home for your family? How? Let us discuss this very important topic in this blog.
The Pag-IBIG Fund exists primarily to enable the Filipino workers to save money in order to buy a decent home for their families. Two concepts: Savings and Buying a decent home.
Although this program is explained to the Filipino workers, there are still a number of Filipino workers who do not use their savings to buy a decent house. First, they don't know if they qualify. Second, they think they can't afford. Third, they don't know what house to buy.
WHY YOU CAN BORROW MONEY TO BUY A HOUSE?
Every month, your employer deducts P100 from your salary for your Pag-IBIG contribution. This is a mandated contribution or forced saving program under RA 9679. The SSS (for private employees) and the GSIS (for government employees) collect P100/month from all Filipino workers through salary deduction.
Your saving (or monthly contribution) is doubled per month.
Every month, you are deducted P100 from your salary. This P100 saving earns another P100 at once. This is "double your money" is a second. Where did the other P100 come from? From the state? No. It's the counterpart of your employer. This counterpart is also mandated by law.
However, if you increase your monthly contribution to P200 or P500, your employer is mandated only to give P100. If your employer is generous, she can match up your contribution to encourage you to save more.
Your savings earned dividend per year. Your savings (your personal saving plus the counterpart of your employer) will earn dividend income per year subject to the declared value of the Pag-Ibig Fund. In 2018, Pag-Ibig Fund declared 6.91% dividend rate which is higher than the bank rates. (Update: In 2020, Pag-IBIG Fund declared 5.62% dividend).
Where did the 6.91% dividend rate come from? The Pag-ibig Fund declared net income of P33.17 billion in the year 2018. 86% of this net income is given to all Pag-Ibig Fund members as dividend income. This income is tax-free.
The Pag-Ibig Fund is earning mainly from housing loans extended to real estate developers and its members who borrow money for housing.
You can borrow money to buy a house and other purposes.
As a Pag-ibig Fund member, you can qualify to borrow money from Pag-ibig Fund to buy a decent house for your family.
You can withdraw your saving after 20 years. Moreover, at the end of the 20 years, you can withdraw your savings plus your employers counterpart plus your dividend income. This is why it is called savings.
WHAT IS THE PAG-IBIG FUND?
The Pag-Ibig (Pagtutulungan: Ikaw, Bangko, Industriya, at Gobyerno) Fund is a response of the government to twin problems of the Filipino workers: Savings and Housing. The fund was created to establish a national savings program and an affordable shelter financing scheme for Filipino workers.
Under Republic Act No. 9679 - the Home Development Mutual Fund Law of 2009, Pag-ibig Fund has two mandates: (1) to set up a forced savings scheme for all Filipino workers, and (2) to invest the fund in housing via loans to members and developers.
MANDATORY MEMBERSHIP
Under RA 9679, every Filipino worker who earns at least Php 1,000 a month should be a member of the Pag-Ibig Fund. This includes household helper defined as persons who render domestic services exclusively to a household such as drivers, gardeners, cook, governess and other similar occupations.
MANDATORY MONTHLY CONTRIBUTION
Under RA 9679, every Filipino worker is mandated to contribute/save Php 100 per month, regardless of their monthly income. And in every Php 100 employee’s contribution/saving, the law mandates the employer to counterpart the same amount. At once, when you contribute/save Php 100 you are earning another Php 100 coming from your employer.
FORCED SAVINGS FOR RETIREMENT
It is actually savings because, after 20 years, you can withdraw what you have saved plus the employer’s counterpart and the dividend (or earning of your money). Every year the Pag-Ibig Fund declares dividend and your dividend is automatically added to your contribution. Per experience, the Pag-Ibig Fund's dividend is far better than the bank’s interest rates.
PAG-IBIG FUND LOANS
As a Pag-Ibig Fund member, you can avail of its loan programs such as: 1. Calamity Loans 2. Multi-Purpose Loans 3. Housing Loans
THE PAG-IBIG CALAMITY LOAN
When the Office of the President or your Local Sanggunian declared your place under State of Calamity, you can apply to the Pag-Ibig Calamity Loan up to the maximum of 80% of your Total Accumulated Value (TAV) with 5.95% interest rate per annum payable up to 24 months. You are given 3 months grace period before you start paying your amortization.
THE PAG-IBIG MULTI-PURPOSE LOAN
The Pag-ibig Multi-Purpose Loan (MPL) is a financial assistance to Pag-ibig members for house repair, minor home improvement, home enhancement, tuition or educational expenses, health and wellness, livelihood; or other purposes. You can borrow up to 80% of your Total Accumulated Value (TAV) with 10.5% interest rate per annum payable up to 24 months. You are given 2 months grace period before you start paying your amortization. You have also the option to renew your loan after you have paid at least 6 months monthly amortization.
THE PAG-IBIG HOUSING LOAN
In Pag-Ibig, your dream for owning a house and lot is within your reach.
▪ Easy to avail (we provide free assistance)
▪ Lowest Interest Rates (as low as 3% per annum)
▪ Longest Payment Period (up to 30 years)
▪ High Loanable Amount (up to ₱6 million loan)
WHY IT IS BETTER TO GET PAG-IBIG HOUSING LOAN
Pag-IBIG Fund offers the longest repayment of housing loan up to 30 years (the bank usually offers 20 years and in some cases, only up to 15 years. The longer your repayment period, the lower is your monthly amortization. Whereas the bank requires at least P50,000 monthly income, the Pag-IBIG Fund even offers to the minimum wage earners (up to P12,000 gross monthly income per month).
When we compare the interest rates of Pag-IBIG Fund to commercial banks that offer home financing, the Pag-IBIG Housing Loan is better. Consider below:
OWN A HOME THRU PAG-IBIG HOUSING LOAN
What are the house-and-lot or condo units that you can buy through the Pag-Ibig Fund?Actually, most of the subdivisions and condominium projects in Cebu have Pag-Ibig Housing Loan. However, I highly recommend these projects in Cebu City, Mactan Island and Carcar City.
(1) House and Lot CORAL VILLAGE - Suba Basbas, Lapulapu City - P9,000/month
(2) Condo PLUMERA - Basak, Lapulapu City - P6,149/month
Read here on How to Apply for Pag-IBIG Housing Loan.
This discussion is for educational purposes only. Consult your lawyer for advice on your specific case. For any questions, contact us.
If you’re planning to buy a residential lot, house-and-lot, or condo unit, get in touch with us at 0920 207 5035 or email cebuhousefinder@yahoo.com for free assistance.
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