Many Filipino workers (in the country and abroad) rely on Pag-IBIG loans to realize the sometimes-elusive dream of home ownership. Compared to private financial institutions, the government agency offers more flexible payment options and, in some cases, low-interest rates.
While its mission is to extend credit to average Filipinos with relatively low income, especially those belonging to the informal economy, Pag-IBIG has begun granting multiple mortgage applications of qualified members for a loanable amount not exceeding ₱6M since 2015.
Apart from buying a lot, house and lot package, or condo, Lancaster New City reviews would tell you that Pag-IBIG housing loans serve more purposes than most Filipinos would think. Here are the other ways to can use them to best effect:
Fund Your Property’s Construction
If you already own a vacant lot, you can use the borrowed money from Pag-IBIG to build a property from the ground up. Or, you can utilize it to complete the construction of your house.
Do Home Improvements
Pag-IBIG loans lend themselves to home improvements too. Whether you want to repair major damage or give your house a complete makeover, you can seek financing from the agency.
Refinance an Existing Mortgage
If you already have a mortgage but want to take advantage of low-interest rates, you can apply for a Pag-IBIG loan for refinancing to save money down the road. Although it’s your option, think twice before resetting the clock of your mortgage because a refinance isn’t for everyone.
If you’re already halfway through your current housing loan’s term, you might not benefit financially from refinancing. In loan amortization, most of your early mortgage payments usually go to the interest. In turn, your principal may not be as reduced as you think.
To determine whether a refinancing your current loan with Pag-IBIG makes sense to you, review your contract to see how much you’ve already paid, and then do the math.
If the “breakeven period” comes before the last day you intend to stay in the house and maintain the mortgage, then refinancing might be worth the effort.
Pag-IBIG isn’t your only source of financing, but it’s one of the better ones. Learn about the complete range of benefits the agency has to offer to maximize your membership and make the most of your contributions.