There are thousands and thousands of borrowers that apply for a Pag-ibig housing loan, but not everyone gets their application approved. Here are some of the common pitfalls of applying for a Pag-Ibig housing loan, and how to avoid getting your application denied:

1) The amount on the Deed of Absolute Sale is less than the approved loan. The amount on the deed should never be less than the approved loan.

2) Applying for a loan to buy a property that has an encumbrance like mortgages, recorded abstracts of judgment, deeds of trust, unpaid real property taxes, easements, mechanic’s liens, and water or timber rights. All encumbrances are on record with the Recorder of Deeds or County Recorder. Before you execute the contract, verify with the Home Development Mutual Fund (HDMF) if the property is acceptable to Pag-Ibig.

3) Improvements outside the house are not part of financing. Consult Pag-Ibig before you pursue the construction.

4) Loans get rejected if part of the bills of materials were reduced (e.g. the flooring and ceiling were deleted) just so it will fit the loan granted for construction. Simply follow the bill of materials evaluated by the HDMF.

5) When borrowers who are separated from their spouse apply for the loan without the signature of the husband or wife, the loan will get rejected. The spouse or wife should present legal separation papers before Pag-Ibig can accept the loan application.

Other than Pag-Ibig Fund, there are other institutions that offer home financing like the Social Security System, the Government Service Insurance System, and the Land Bank of the Philippines. For further inquiries on Pag-Ibig housing loans, call the Pag-Ibig hotline at 724-4244.

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