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Dealing with my family’s finances during the pandemic

Photo by Josh Appel on Unsplash Growing up, I considered myself poor. Although we had a roof over our heads, three meals a day, and enough clothes to get by, we could not pay the mortgage, and our school tuition payments were always late. There was also a time when my parents had no jobs, my father had to settle for direct selling. We were one of those in an endless cycle of debt, where the only way to pay one is to borrow from another. My parents were stuck in this habit even after all of us children graduated and had jobs. When I started having money problems of my own and saw how lacking my financial education was, I tried learning how to manage my income. I was lucky enough to have friends who shared their self-help books and taught me some of the basics of saving and investing. But passing this knowledge on to my parents was another mountain to climb, especially when they thought it was none of my business. So started this mission to convince them---it was the only way to protect
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On Pag-IBIG Housing Loan Assumption

Pag-IBIG housing loan assumption

MY brother and I once had a discussion about how Pag-IBIG housing loans are assumed. It came up because I was pondering about transferring the mortgage I am paying for to my sister.

This is the scenario:

Last 2014 I decided to get a small house, but since I have no Pag-IBIG account, I asked to use my mother’s. This means that the land title would bear my mother’s name.

Now to transfer the property ownership to me, I would need either a Deed of Donation or a Deed of Absolute Sale, whichever is easier and faster. However, that would only be applicable once the title is released by Pag-IBIG, that is, upon full payment of the loan.

But what if I want to let go of the property and just let someone else assume the loan? In this case it is my sister who might be interested in the property. Since she maintains a Pag-IBIG account, she is eligible to assume the mortgage, but remember that the title would still be under the original borrower’s name (our mother). So by the time the title is released to her, she would again need a Deed of Absolute Sale to transfer ownership of the property.

Discussing this with my brother made me realize mortgage assumption is no easy business. We were talking about transferring rights just between family members, which would make deciding on agreements seem easier. Imagine, then, if the seller you’re dealing with is a stranger.

You would have to be thorough in the documents you need to procure especially for Pag-IBIG and Registry of Deeds processing. Don’t be afraid to ask questions twice; be sure to consult an experienced lawyer or broker; and take note of the following documents:

  • Notarized Deed of Absolute Sale (DOAS) or Deed of Sale with Assumption of Mortgage or Assignment of Rights/Contract
  • Notarized Special Power of Attorney (SPA)

-Julienne

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