Filipinos perceive that owning your own furnished home is an indication of one’s success! Having your own house-and-lot is a tangible manifestation that you are financially stable, ready to settle and build your own family.

According to a consensus done by PSA, 3 out 5 families in the Philippines own the house-and-lot they reside in. That is 62% of the total number of Filipino families. In another statistical result, it shows that 42.6% of the residential real estate loans (RREL) are related to single attached/detached houses.

So what is a real estate loan? What is financing?

House financing is when a borrower enters into an agreement with the lender to pay back the money borrowed over a specific timeframe to buy a Real Estate property. Here in the Philippines, financing is available through PAG-IBIG or the homebuyer’s preferred bank.

House financing is utilized many times by Filipinos who are eyeing to buy real estate properties for sale. This kind of financial service helps many Filipinos with settling their house payment with less hassle and worries.

PROS and CONS: PAG-IBIG vs Bank!

Bank Financing:

• PROS:

  1. Fixed loan term!

  The monthly interest rate and monthly installment amount in bank financing will remain the same until the agreed loan period ends.

  
  

• 2. MORE OPTIONS!

  Banks offer various housing loan options for their clients. Each client has the freedom to choose which loan they prefer when buying Real Estate properties. These housing loans come with options like lower interest rates, longer loan periods, and promos.

  
  

• CONS:

  1. Credit Score...

  This isn’t necessarily bad for other people, but having a good credit score is a must! Getting approval for a house loan via bank would require the banks to go through your transactions, verify your monthly/yearly salary rate, and etc. Majority of the time, banks would need the home buyer to pay off all current loans or see whether the borrower is capable of paying off the house loans being applied for.

  
  

PAG-IBIG Financing:

• PROS:

  1. Long housing loan period!

  PAG-IBIG offers a payment period of up to 30 years. As long as the borrower isn’t at the age of 70 by the time the 30 year period ends, then it can be approved. PAG-IBIG also offers short-term periods of loans.

  
  

• 2. Minimum wage salary

  PAG-IBIG has affordable loan offers for minimum wage earners. For as low as 2,500 per month for 30 years, you can now reach your dream of buying a real estate property and becoming a homeowner!

  
  

• CONS:

  1. No Membership?

  The PAG-IBIG housing loans are only open to qualified PAG-IBIG members who made 24 months worth of contribution.

  
  

• 2. Application Process

  Going through a PAG-IBIG home loan process can be a lot. Each borrower has to go through the process of bidding, submitting documents, and securing their loan application. Showing up physically is also required by the PAG-IBIG office. This can ask for a lot of time and patience from the desiring home-buyer.

  
  

Conclusion

At the end of the day, it is still up to us where and how to find the right housing loans that would allow us to buy Real Estate properties. Depending on our status, our preferences in loan longevity periods, and convenience, then we can decide and pick which house loan offers work best for us.