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House and Lot 101: PAG-IBIG Loans Vs Bank Loans

A smart buyer doesn’t just focus on purchasing a house and lot and change the for sale sign to ‘sold’ afterward, they also need to factor in which options are affordable. As a new homeowner, these should be your two priorities: finding the perfect house and lot and making the purchase work out for your budget.

Making Purchases Out of Nothing at All

When the word ‘affordable’ is mentioned, someone will definitely think about loans as they make it possible for you to buy a house and lot for sale practically from scratch, needing just a few requirements to make it so.

PAG-IBIG Loan vs Bank Loan

For the Filipino family just starting out, two of the most popular loan choices are PAG-IBIG loans and bank loans. Both types of loans may offer you identical or differing options and policies applicable for your income. You just need to know their differences and similarities by understanding what each type of loan can and cannot do for you.

Criteria PAG-IBIG Loan Both Bank Loan
Qualification ·          Membership required

·          Must have 24 monthly contributions

·          Members can pay 24 months via lump sum

·          Age not more than 65 years old

·          No existing loan debts

·          No foreclosed, cancelled, or bought back PAG-IBIG loans










·          No membership, savings account, and contributions required

·          Must be a Filipino citizen or have a Visa in the case of foreigners

·          Must have a monthly income of PHP 40,000

·          Must have a stable income

·          Needs a stay of 2 years in a company or 3 years of profitable operation if running a business


Loan Purposes ·          Purchasing of a lot not exceeding 1,000 square meters


·          Purchasing of a town house or condominium

·          Completion of reconstruction

·          Refinancing

·          Home equity service
Borrow Limit ·          PHP 6,000,000 Maximum

·          Depends on your need or capacity to pay



·          Bank offers vary from a minimum of PHP 300,000 to PHP 500,000
Repayment Process ·          Maximum of 30 years None ·          5 to 35 years
Needed Insurance(s) ·          Insurance premium will be included in monthly amortization  


·          Mortgage Redemption Insurance

·          Fire Insurance

Processing Time ·          15 business days None ·          5-7 business days


Requirements and Fees for Application


  • Pag-Ibig Housing Loan Application Form
  • Membership Status Verification Slip
  • TCT/CCT in the name of the borrower
  • Photocopy of the New Tax Declaration
  • The Collection Servicing Agreement or Post dated checks
  • Proof of billing address
  •  Notarized Loan and Mortgage Agreement
  • Notarized Promissory Note
  • Disclosure Statement on Loan Transaction
  • Occupancy Permit (if applicable)
  • Building Plans (if applicable)
  • Deed of Absolute Sale (if applicable)
  • PHP 1000 for application
  • PHP 2000 before loan release


  • Application form
  • Photocopy of government issued ID with photo & signature
  • Marriage contract if applicable
  • Alien Certificate of Registration for foreigners
  • ITR for employees
  • Last 3 months of payslips or Certificate of employment for employees
  • Business Registration Papers for businessmen
  • Financial Statements  for businessmen
  • Bank Statements for businessmen
  • Trade References for businessmen
  • Lease Contracts or copy of Title for businessmen
  • Photocopy of TCT/CCT
  • Building plan with vicinity map
  • Master of Deed of Declaration of Restrictions for condominiums
  • Building plan for construction
  • Bill of materials and Labor Cost
  • Statement of Account for Refinancing
  • PHP 3500 – 4000 appraisal fee
  • PHP 5000 handling fee
  • PHP 500 notarization fee
  • Registration fee and doc stamps tax

Decisions, Decisions

Review all of these before applying for a loan to purchase a house and lot for sale. PAG-IBIG loans are easier on the budget despite the need for a membership, while a bank loan lets anyone apply for a loan so long as they have the fees and the necessary but strict requirements. Weigh in the pros and cons and analyze what you really need to come down to a smart decision. Loan wisely!

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