For many Filipinos, buying a house is one of the most important financial decisions they ever have to make. Having a home to call your own is the ultimate Filipino dream, and with the various financing options available today, that dream is increasingly easier to achieve.
The question now is, are you ready to buy a real estate property and become a homeowner? Beyond the external and obvious considerations, are you ready for the responsibilities it entails? It’s a tough decision to make and hopefully, these 10 questions will help prepare you to make the right one.
1. Do you have a stable job?
If you are an employee, you must be with your company for at least 2 years; whereas if you’re a businessman, you should have a steady and predictable stream of income that can withstand the monthly mortgage and maintenance expenses.
If you have a stable source of income, the more likely that you will be approved for a loan because this is one of the facets that loan officers look into to check your history and credibility.
2. Can you afford to pay the down payment?
Property is a big purchase that requires huge down payment. Allot 10-20% outside of your savings, retirement or emergency funds and set this aside for down payment. Put this in a checking account because most banks and financial institutions will require at least 12 post-dated checks for down payment.
Actually, the more you can put down, the lower your mortgage will be, thus preparing you for a stronger financial position.
3. Do you have a good credit score?
Unfortunately, most Filipinos ignore this aspect before or during loan application that is why sometimes, they get disappointed when they are rejected. Even before planning to buy a house, try to maintain a good and positive credit standing.
This is especially so when you choose bank financing
because they will look at your financial history to determine your eligibility or the risks associated with lending you money.
However, if you have a bad credit score, don’t lose hope. Pay it off and diligently monitor your credit report. Try to pay your credit on time and don’t skip it. This will have repercussions when you decide to apply for a housing loan.
4. Have you paid off your outstanding debts?
Simply put, a housing loan is still debt, and if you have current ones that increase your balance every month, you better focus on accomplishing it first. Don’t pressure yourself to buy a house if you really
can’t afford it yet.
Instead, come up with plan and prioritize which needs immediate attention so that you can keep your finances on track. Once you have enough room in your budget even after paying off monthly debts, that’s a sign to start thinking seriously about buying a house.
5. Are you ready for additional payments?
There is so much more than the obvious price tag of a house. Once you moved in, it will be an ongoing commitment and expenses including association fees, insurance, utilities, maintenance, etc.
You should be financially and mentally prepared for this and have added this to your budget even before looking for a property. Allot at most 25% for these expenses, but higher than this and you will get over budget.
6. How are you with repairs?
The difference between a renter and a homeowner is that the latter must know how to fix even the most basic house problems
. When you’re finally a homeowner, you must either know how to fix it by yourself or have the budget to call in the professionals.
If you’re Mr. Handyman, you’ll save on labor costs, but you must also be resourceful and look for the best materials or equipment. This is the reality of being a homeowner and you must anticipate and prepare for it.
7. Do you yourself growing old in the house?
Just like building a family, buying a house is a lifelong commitment, so if you’re dipping your toes half-heartedly, might us well break up from the beginning. However, there’s more to this emotional aspect.
Real estate experts say that home prices appreciate around 3% per year, so if you have a business savvy mindset, you wouldn’t flip it in the first 2 years.
Instead, live in it for at least 5 years and by then, you would have recovered your overall expenses before deciding on a bigger house. Otherwise, it’s a matter of lifelong maintenance.
8. Does the community fit your needs?
Let’s veer away from the hard hitting points for a moment and focus on the lighter side of buying a house
. An innate consideration that Filipinos scrutinize when looking at a house is the neighborhood. After all, they want their children to grow up in harmonious and healthy environment.
As a homebuyer, you have a checklist when going on a “site visit”: you want to know where the nearest grocery store, church, or school is. You also consider commute time, amenities, facilities, and even how friendly your (future) neighbors are.
Having this information can significantly influence your buying decision so, before deciding on acquiring a property, ask yourself “does it have everything that I/my family needs?”
9. Are you really ready to settle down?
One reason why Filipinos want to have their own house is because they want to create their own family. At the same time, this is also a huge financial investment.
So, whatever your main motivations are, make sure that you have considered all possible questions and scenarios so that you will make a sound decision.
10. Can you still afford the little things in life?
If, after crunching the numbers, you found out that you can still afford to save for emergency funds and have more than enough to enjoy a small getaway or impulse wants, then, it is a sign to make the investment.
How many “YES” did you get?
If you’ve answered YES to most of these questions, it’s time to move to the next phase: get in touch with a broker and find your dream home!