Different housing loan options available to OFWs
Pag-IBIG Housing Loan
The Home Development Mutual Fund (HDMF) or Pag-IBIG Housing Loan is one of the popular modes of acquiring additional funds. An OFW member may borrow anywhere between Php750,000 to Php6,000,000 for their housing needs. These come with different interest rates depending on the duration of the loan period. A one-year loan, for example, can have a 5.375 percent interest rate attached to it. On the other hand, loaning an amount for three years will have a higher annual interest rate of 6.375 percent.
These rates have already been reduced since early 2018. It was previously 5.5 percent for the one-year loan and 6.5 percent for three-year loans. Those needing to avail of a 30-year loan will be glad to know that the HDMF provides this as well, giving you a chance to get a loan with lower monthly obligations. The annual interest rate for a 30-year loan is 10 percent.
OFWs should be less than 65 years old and have made at least 24 months’ worth of contributions to qualify for this program. They will also need proof of income such as an employment contract or an original employer’s certificate of income. A notarized Special Power of Attorney (SPA) accomplished before their date of departure will be required. The Philippine Embassy or Consulate may also authenticate the SPA in the country of their employment. Should they be more than 60 years old, a Health Statement form will be necessary.
SSS Direct Housing Loan
OFWs may want to consider applying with the Social Security System (SSS) for their housing loan needs for lower-priced properties. The loanable amount can be anywhere from Php450,000 to a maximum of Php2,000,000. This amount may be utilized for various uses aside from buying a house, a condominium unit or townhouse. It can also be allocated for home construction expenses. This would come in handy in case additional funds are required after purchasing a lot or foreclosed property that needs maintenance.
There are different annual interest rates based on the amounts loaned, the lowest being eight percent per annum and the highest at 11 percent per annum. These funds can be paid within five-year increments with a limit of 15 years depending on how much was borrowed.
To qualify, the borrower must not be 65 years old at the time the loan potentially matures. An SSS appraiser will also have to determine that the building’s economic life will exceed the loan term. The member must also have made a minimum of 36 contributions before applying for the loan, with At least 24 consecutive contributions. Note that there should have been no previous SSS housing loan availed by the member.
Private Bank Housing Loan
There are multiple private banks which offer housing loans to OFWs. Their rates do fluctuate with the lowest currently estimated at 5 percent for one year. It would be best to verify the updated amounts at the time the loan is actually applied for. Banks would usually have more stringent requirements. These are some of the basic requirements for a bank home loan:
Proof of income
A private appraiser must also make a valuation of the property before a loan is released. Banks normally loan out 80 percent of the property’s appraised value. This process takes around one to three weeks, depending on how fast the necessary documents pertaining to the property are forwarded. OFWs who will be in the country for a limited time might want to prepare for this beforehand.