What is Mortgage Redemption Insurance?

What is Mortgage Redemption Insurance?

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Mortgage Redemption Insurance or  MRI is a type of Life Insurance required by Banks and other Lending Institutions when you apply for a Home Loan. An MRI pays off the outstanding mortgage balance of the borrower in case of his or her death or total disability.

 

While there are those who do not see the need for an MRI, as it supposedly just adds to the money that needs to be shelled out. The purpose of an MRI is two-fold: First, it protects the bank – the MRI guarantees that the bank will be paid back the amount that was lent out. Therefore, the bank or lender does not have to sequester the house from the borrower’s surviving family. Secondly, it protects the borrower’s surviving family – the MRI helps settle the outstanding house loan amount so that the borrower’s surviving family does not have to worry about how to pay off the outstanding loan amount.

 

Whenever you make a significant investment, you need to protect it via insurance. To be clear, MRI is not like fire insurance which is typically an add-on to your property insurance, or insurance that includes protection from Acts-of-God. Hopefully, You now have a better understanding of MRI and how it is different from fire insurance.

 

Should you have any other real-estate related questions, please feel free to comment or email your questions to broker.doah@philrep.com.ph

Pag-IBIG loan requirements and fees

Pag-IBIG loan requirements and fees

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Required Fees and Documents (Upon Loan Application).

a. Processing fee (non-refundable) of Php 1,000 and appraisal fee of Php 2,000.

A fee of Php 1,000 will also be charged for every re-evaluation or re-filing of housing loan application.

b. Duly accomplished Housing Loan Application Form with recent ID photo of the principal borrower or co-borrower (if applicable).

c. Proof of income.

For Employed, bring ANY of the following:

  • Notarized Certificate of Employment and Compensation (CEC) showing your gross monthly income, allowances, or monetary benefits.
  • Income Tax Return for the year prior to the date of loan application with attached BIR Form No. 2316, received and stamped by the BIR.
  • Any certified 1-month payslip from the last three months prior to the date of the loan application. If you’re a government employee, the payslip must be submitted with CEC or ITR.

For Self-Employed, bring ANY of the following:

  • Income Tax Return (ITR), Audited Financial Statements, and Official Receipt of tax payment from the bank supported with Mayor’s Permit/Business Permit and DTI Registration.
  • Commission vouchers issued within the last 12 months and showing the issuer’s name and contact details.
  • If your income comes from pensions, foreign remittances, etc., a copy of bank statements or passbook for the last 12 months.
  • If your income comes from rental payments, a copy of the Lease Contract and Tax Declaration.
  • Certified True Copy of Transport Franchise issued by the authorized government agency like the LGU for tricycles and LTFRB for other PUVs.
  • Certificate of Engagement issued by the business owner.
  • Other documents that can validate or prove your source of income.

For Overseas Filipino Workers (OFW), bring any of the following:

  • Employment Contract (Employment Contract between employer and the employee or POEA Standard Contract).
  • Certificate of Employment and Compensation (CEC). This CEC can be in the form of a document signed by the employer (for household staff and other similar employees) and supported by the employer’s passport or ID. A CEC written on the company/employer’s official letterhead is also accepted.
  • Income Tax Return filed with the OFW’s host country or government. If written in a foreign language, an English translation is required.

d. Photocopy (front and back) of one valid ID of the principal borrower and spouse, co-borrower and spouse, seller and spouse, owner of the title (for accommodation mortgage), and developer’s authorized representative/Attorney-in-Fact, if applicable.

The following is a list of valid government-issued IDs accepted by Pag IBIG Fund:

  • Company ID
  • Passport (Philippine or foreign)
  • Professional Regulation Commission (PRC) ID
  • Driver’s License
  • Government Service Insurance System (GSIS) eCard
  • Social Security System (SSS) Card
  • Integrated Bar of the Philippines (IBP) ID
  • Government Office and GOCC ID (e.g. AFP ID, Pag-IBIG Loyalty Card)
  • Overseas Workers Welfare Administration (OWWA) ID
  • Senior Citizen Card
  • Overseas Filipino Worker (OFW) ID
  • Postal ID
  • Seafarer’s Identification and Record Book (SIRB)
  • Voter’s ID

e. Latest Certified True Copy of the Transfer Certificate of Title (TCT). If you’re applying for a loan to purchase a condominium unit, present TCT of the land and a Certified True Copy of the Condominium Certificate of Title (CCT).

f. Photocopies of the updated Tax Declaration (house and lot) and Real Estate Tax Receipt.

g. Vicinity map or sketch of the property.

i. Additional Requirements (if applicable only).

For Purchase of Lot/Residential Unit.

  • Contract-to-Sell or similar agreement between the buyer and seller.

For Purchase of Lot with Construction of House (PLCH).

  • Contract-to-Sell or similar agreement between the buyer and seller.
  • Building Plans, Specification with Bill of Materials duly signed by the Licensed Civil Engineer or Architect.

For Purchase of Properties from a Developer/Association/Corporation.

  • License to Sell (applicable to the Developer only).
  • Secretary’s Certificate on the Authorized Signatory of the Developer/Corporation/Association.
  • One (1) valid ID of the Corporate Secretary and Authorized Signatory of the Developer/Corporation/ Association (Photocopy, back-to-back).

For Construction of House/Home Improvement.

  • Building Plans, Specification with Bill of Materials duly signed by the Licensed Architect or Civil Engineer. This requirement is to ensure that the loan will be used by the borrower for the intended purpose and not for something else like investing in a business, buying a car, etc.

For Accommodation Mortgage.

  • Building Plans, Specification with Bill of Materials duly signed by the Licensed Architect or Civil Engineer.
  • Notarized SPA for Accommodation Mortgagor.

For Refinancing.

  • Latest Statement of Account on Outstanding Loan Balance duly signed by the manager or the account officer.
  • Either of these two documents: Subsidiary Ledger or Official Receipt for the past 12 months (or any valid proof of payment).

For Refinancing with Construction of House/Home Improvement.

  • Latest Statement of Account on Outstanding Loan Balance duly signed by the manager or the account officer.
  • Either of these two documents: Subsidiary Ledger or Official Receipt for the past 12 months (or any valid proof of payment).
  • Building Plans, Specification with Bill of Materials duly signed by the Licensed Civil Engineer or Architect.

For OFW Pag IBIG Fund members.

  • Special Power of Attorney notarized either by a Philippine Consular Officer or a notary in the country where you’re working. The SPA should be authenticated by the Philippine Consulate.
  • Any or a combination of the following documents (written in or translated into the English language): Valid OWWA Membership Certificate; Payslip indicating income received and the period covered; Professional License issued by Host Country/Government; Residence card/permit (permit to stay indicating work as the purpose); Overseas Employment Certificate; Passport with appropriate visa (Working Visa); Bank remittance record.

Insurance Coverage.

  • Health Statement Form (Medical Questionnaire) for borrowers over 60 years old or those 60 years old or younger whose loans are over Php 2 million to Php 6 million.
  • For OFWs over 60 years old, a Health Statement Form (Medical Questionnaire) along with a copy of the medical examination result as required by the employment agency and conducted before you flew overseas.

 

Required Fees and Documents (Prior to Loan Release).

a. Php 2,000 upon loan take-out (to be deducted from loan proceeds).

Additional fees (if applicable):

  • Php 1,000 (to be deducted from the final loan release) for every inspection in excess of four inspections for accounts with staggered releases (e.g., home construction or improvement).
  • A handling fee of Php 2,000 for every additional check issued for split payment of loan proceeds.

b. TCT/CCT in the name of the borrower/co-borrower/s (if applicable) with proper mortgage annotation in favor of Pag-IBIG Fund (Owner’s Duplicate Copy).

c. TCT/CCT in the name of the borrower/co-borrower/s (if applicable) (Certified True Copy) with proper mortgage annotation in favor of Pag-IBIG Fund (RD’s copy).

d. Updated Tax Declaration (House and Lot) and Updated Real Estate Tax Receipt (photocopy) in the name of the borrower/co-borrower/s, if applicable.

Note: For refinancing, you will only need a photocopy of the updated Real Estate Tax Receipt.

e. Loan Mortgage Documents (to be provided by Pag IBIG upon loan approval):

  • Loan and Mortgage Agreement duly registered with Registry of Deeds with original RD stamp (HQP-HLF-162/163).
  • Duly accomplished/notarized Promissory Note (HQP-HLF-086/087).
  • Disclosure Statement on Loan Transaction (HQP-HLF-085).

f. Additional Requirements (if applicable only).

Surety bond (for properties that are subject to the lien imposed by Section 4 Rule 74 of the Rules of Court).

Collection Servicing Agreement with Authority to Deduct Loan Amortization or Post Dated Checks, if applicable.

For Purchase of Lot/Residential Unit.

  • Deed of Absolute Sale duly registered with Registry of Deeds with original RD stamp.

For Purchase of New Residential Unit only.

  • Deed of Absolute Sale duly registered with Registry of Deeds with original RD stamp.
  • Occupancy Permit.

For Purchase of Lot with Construction of House (PLCH) only.

  • Deed of Absolute Sale duly registered with Registry of Deeds with original RD stamp.
  • Occupancy Permit.
  • Building Plans/Electrical/Sanitary Permits duly approved by the building officials.

For Construction of House/Home Improvement.

  • Occupancy Permit.
  • Building Plans/Electrical/Sanitary Permits duly approved by the building officials.

For Refinancing.

  • Updated Statement of Account on Outstanding Loan Balance duly signed by the Manager or the account officer.

For Refinancing with Construction of House/Home Improvement.

  • Updated Statement of Account on Outstanding Loan Balance duly signed by the Manager or the account officer.
  • Occupancy Permit.
  • Building Plans/Electrical/Sanitary Permits duly approved by the building officials.
  • Updated Tax Declaration (House) in the name of the borrower/ co-borrowers.

Pag-IBIG loan requirements and fees

Comprehensive Guide for Bank Housing Loan

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Pag-IBIG loan requirements and fees

Comprehensive Guide for In-House Housing Loan

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