Filipino Mortgage Tips

Tips & Tricks For Filipinos Trying To Get A Mortgage

What is a Paluwagan?

A Paluwagan is a money saving system groups of people (usually Filipinos) use to save money for down payment on houses or vehicles.

How Does A Paluwagan Work?

Multiple people contribute a set amount of money into an account every month, one person will receive the entire amount in that account per year or per half year depending on what the group wants.

One person will be the treasurer and will be in charge of distributing the money and making sure everyone makes their payment.

It works on a rotation system, so if you just received the entire balance in the account, you will have to continue to make your monthly payment until all members get paid out.

This is a trust based system, and should never be done with people you do not know well or trust.

The Paluwagan is a forced savings system and is used to save for something specific like the down payment for a house

What Are The Risks Of A Paluwagan?

It is totally unregulated, so you have to have massive trust in the treasurer.

– A member may get a payout and then stop contributing.

– Strain on relationships if a member is not willingly contributing

Other Paluwagan Negatives:

No interest will accrue in a Paluwagan.

Overall Opinion Of A Paluwagan:

I have seen this work extremely well with groups of friends and families! A few of the groups I have set up mortgages for, the entire group was able to purchase a home!

Thanks for reading, please call me with any questions at 780-278-4847!