housing in the Philippines. It has always been my intention to help out fellow Filipinos who are out there looking for a home to call their own. So posting these articles, I hoped, would somehow give them the information they need. From a personal finance standpoint, I have discussed about housing loans particularly relating to the PAGIBIG programs as compared to the same type of loans from banks. And I have elaborated to the best of my knowledge what the deal was with PAGIBIG housing loan programs.
All of these articles came from research of what information is available out there (mostly in websites). Still, it's difficult to tell how valid these pieces of information are until you actually use them. In other words, not everything you read from the internet or even government websites may be usable. I'm not saying they're necessarily wrong. I'm just saying some of them may not be applicable to your current situation.
Although it's infinitely better to have the information readily available than being in the pre-internet time, nothing beats actual experience to tell you the truth about what you need to know. This definitely applies to acquiring a home in the Philippines. I have read many articles about it but the actual process that I have gone through revealed to me what were real and what were not.
That's why I would like to document this experience as much as I can to help others who would be going through or would like to go through the same process. My hope and aim is for others to learn from my experience so it can lead them to the right path with their own home acquisition. I recognize that not everything will be the same for everyone. It will most definitely be a little different depending on the location and circumstances but that shouldn't stop us from learning from each other. It will still be a benefit for most.
My Recent ExperienceI have been living in an apartment in Mabalacat City, Pampanga near the Clark Freeport Zone where I’ve been working for more than three years now. It's a nice small apartment that I wouldn't mind living in for the rest of my life. But as any family man will tell you, we dream of giving our loved ones a home we can call our own. So for the last three years, I have thought about getting a house in Pampanga although I was not in a hurry to do so. We were still a young family. My two kids are still very young so this two-bedroom apartment was more than enough for us.
Every now and then, I would get an opportunity to visit residential development projects and would acquaint myself of the housing market. I found it worthwhile to know these different locations and residential developments just to get a feel of what I can aim for in terms of affordability. I went to Bamban in Tarlac, Fiesta Communities in Mabalacat City, Executive Villas in Mabalacat City, Noveau Residences in Angeles City and Mirus Residences in Mabalacat City.
In each of these residential subdivisions, I learned many things about acquiring a home that are important for me to make my decision. I have asked myself the following questions to help me evaluate the options.
1. How far is it located from my work?I found the answers to these questions with each of my visits together with a real-estate agent. It helped to acquaint myself with these details in order to avoid serious problems in the future. Mind you, I did not rush my decision about this. I let the options linger in my head for quite a while. And when I knew what I really needed (and wanted) in consultation with my family, that's the time I started the process with my agent.
2. How far is it located from schools, hospitals, etc.?
3. Is the surrounding area safe enough to live in?
4. Which house model can I afford and would it fit my need?
5. Do I like how the house looks like? Is the design good for my taste?
6. Is the developer credible enough to deliver with good services?
7. How do I feel about the surroundings? Is it a good place to live in?
I chose the best house that I can afford from all those that I visited. Of course, I have taken location into account very seriously. As I have stated above, it should be near enough to the place of my work and the school where my kids could study.
I also liked the way the house looked and trust the developer to keep the subdivision neat, clean and looking good. That's because I have read their policies and got the idea that those were the correct rules to implement. They were strict and detailed about what can and cannot be done. Since there were families living in several homes already, I was able to observe how the community was like so far. And all those added to my good impression about the house and the subdivision as a whole.
PAGIBIG Housing LoanOf course, the question of whether or not I can afford the house is one of the biggest if not the biggest consideration of all. This aspect is where I discovered several unwritten information that I'd like to share with you. Most especially if you also plan to get your house financing through PAGIBIG. Two of the most important factors for me with regards to home loan financing are:
- Monthly amortization
I was presented with pricing options based on PAGIBIG housing loan programs. The options were primarily aligned with the "new guidelines" that PAGIBIG has recently started. I have written about this before so I thought I knew what to expect. I saw the monthly rates and they were in agreement with what I had in mind together with the new repricing methods.
I was delighted to get the least interest rate from these options, which was around 8% for a repricing period of 3 years. Or so I thought!
Surprises and DisappointmentsThe first of many surprises for me was that PagIBIG was not really implementing the new guidelines yet. They have made the announcements, they have websites specifically for this purpose, they have a rough system for it, but all of those things were not really designed appropriately to work for the consumers yet.
I was told that I had to decrease my loan amount significantly to qualify and I was not amenable to do that. So I chose what every other borrower have chosen in this case which was to revert to the old guidelines. I was also told that not one customer has been processed using the new guidelines yet because of this.
It was a revelation that caused some disappointment. My monthly amortization jumped by 20% when the old guidelines was used as compared to what I would have paid using the new guidelines. The new guidelines were, I thought, better because it had lower interest rates. But because of the periodic repricing, I thought it was more risky just because the old guidelines have fixed interest rates for the entire duration of the loan. Or so I thought again!
Upon going through the PAGIBIG loan application documents with the personnel handling my account, I was informed that my PAGIBIG housing loans will also have 3-year repricing periods!
I could not believe that this was the case for the old guidelines as well. I really thought it was a fixed rate for 30 years maximum. Although I was consoled by the fact that PagIBIG rarely adjust their rates up, the revelation caught me by surprise. I thought I had it all figured out. Apparently, I did not.
I don’t know if this is the end to the surprises. But I do foresee more challenges ahead especially when the loan is approved and I begin to have more transactions with PAGIBIG. I will continue to write about this so that others can learn from my mistakes and hopefully share their experiences as well.
I hope I'm the only one who has made these wrong assumptions about the PAGIBIG housing loan but I believe many others are in the same boat. I blame PAGIBIG for not putting out clearer explanations about their old guidelines and not doing a good job of implementing what is supposed to be a new set of guidelines to replace the old one.
Looking back, I think these are third rate services from a third rate government agency of a third world country. I was expecting a lot more and was gravely disappointed for it.