Is your home looking a little sad, like it needs some sprucing up? Then maybe it’s time for a renovation, or a home improvement project!
To have the most bang for your buck, why not have plants in your yard? Trees and other potted plants can actually help increase your property’s value. You might also want to give the house a fresh coat of paint to make it look livelier and homier. Don’t forget to inspect all the nooks and crannies of your house, too: you wouldn’t want to miss a spot when doing home improvement, repairs, or renovations!
Also, don’t ignore the “little problems” like squeaky doors and dripping faucets. They could only get worse and give you major headaches in the future. Also make sure to keep track of the changes you make in your home. This way, routine maintenance and upkeep on your house will be easier.
Let’s face it though: home improvement and renovation can be costly. Buying the materials and the cost of labour itself is going to put a huge dent in your savings, not to mention planning and actually doing the improvements and renovations itself.
But did you know that you can take out a home improvement loan to finance your remodeling or renovation projects? There are many ways you can take a housing loan for your home improvement. You can apply for a housing loan from banks, or take advantage of your PAG-IBIG membership for a housing loan. If you know the ins and outs of getting a home loan, your home improvement plans is not too far out of reach.
Here’s a quick guide on where to get a housing loan, what steps you need to take to get a loan, and what sort of requirements you are expected to submit for your home loan application:
Bank Home Improvement Loans
Banks usually offer a number of loans to existing clients. It’s easier if you already have an account with the bank where you intend to get a housing loan from. Most banks though can accept a home loan application from those who don’t have an account with them yet. Shop around for a bank that offers home loans with low interest rates but fits with your needs, at a payment period that you can manage.
Home loan applications from banks usually require you to submit the following:
1. Accomplished application form
2. Copy of 2 valid, photo-bearing government-issued IDs
3. Copy of Income Tax Return
4. For locally-employed borrowers: a copy of Certificate of Employment with Compensation, or latest one-month Payslip
5. For the self-employed: a copy of your Three-Year Financial Statements, Bank Statement of Account for the last 6 months, and Business Registration Papers from DTI and/or SEC
6. For OFWs: Consularized Special Power of Attorney, Latest employment contract or Certificate of Employment with Compensation, Proof of Remittance (Passbook, or Remittance Slips for the past 3 months)
Banks may also ask for additional documents, such as the estimate bill of materials for your home renovations or improvements, including building plans, job specifications, and material and labour costs.
Once you’ve submitted the required documents, banks will process your application for 10-15 business days. Some banks will require a minimum loan amount varying from PHP300,000 up to PHP1 million. You might also need to pay fees and a downpayment. When your application has been approved, you may take out your loan and spend it wisely on your home renovation projects.
PAG-IBIG Home Loan Application
For home loans through PAG-IBIG, you must be an active PAG-IBIG member, which means that you must be actively and regularly making monthly contributions to PAG-IBIG for 24 months (two years), and have paid contributions over the last six months.
PAG-IBIG offers two housing loan programs: the Regular program with interest rates of 8% up to 12.25%, and the Affordable program with interest rates of 4.5% up to 6.5%.
Here are the requirements you need to submit for a PAG-IBIG home loan application:
- Attend a loan counselling session at the PAG-IBIG office (optional)
- Accomplish a Preliminary Loan Counselling Questionnaire (optional)
- Accomplish the Housing Loan Application (co-borrowers must file a separate Housing Loan Application)
- Accomplish the Membership Status Verification Slip
- Secure a Checklist of Requirements for Window 1, Window 2, or Retail accounts
- Processing fee of PHP1,000
After submitting all the requirements, along with the processing fee and your Housing Loan Application, PAG-IBIG will then conduct a background credit investigation. They’ll contact you with the results within 5 working days, after which you must schedule a property inspection within another 5 working days. Results of the property inspection will be given to you within 2 working days. Once your loan is approved, you’ll receive your loan documents which you should fill up, notarize, and submit within 90 days.
Whether you’re getting a home improvement loan from a bank or from PAG-IBIG, don’t forget to be responsible in paying your monthly amortization/ loan payments. Don’t miss a payment, or you’ll end up acquiring more debt than you can manage, not to mention a bad credit history.
Disclaimer: This contribution is exclusively written for Cebudotcom by MoneyMax.ph, the Philippines’ leading financial comparison portal which helps Filipino consumers make the right financial decisions as they settle on the best credit card, home loan, broadband plan, and more—fast, comprehensive, and free. Please do check our website to learn more.