Tag: Home Buyers Guide

There are many reasons why you may have decided to purchase a home – a growing family that needs more space, you’re tired of paying rent and want to invest your money and you’d like to get the tax breaks that homeowners enjoy. Those are just a few.

Don’t simply compare what you’re paying in rent to what you’d be paying with a low interest mortgage payment. Even though it can be an asset for the future, you may not be ready financially to make the commitment.

Should you rent or buy a house? Here are factors you might want to consider before deciding

Budget

The pros in homeownership highly recommend that you have a down payment of at least 10 to 20 percent and have an emergency fund socked away that can get you through 3 to 6 months of bill payments.

There are also other points to consider when deciding whether to rent or buy. Buying a home is touted as ‘smart’ and renting as ‘dumb’ but that’s not always the case. Purchasing a home can be a good decision, but some experts believe that it’s a bad financial decision and that the idea of home ownership is overrated.

Stability and Freedom

Purchasing a home provides security because you would never be evicted by a landlord. Renters have little say over how long they can stay in a rented home after the lease period ends. Living in your own home also gives you the opportunity to renovate and decorate it as you see fit.

Privacy

When you own a residence, you have control over who has access to it. In comparison to renting a property, the landlord can simply notify you that they will be dropping by on a regular basis to conduct regular checks and ensure you are taking care of the house.

Property Value and Taxes

Some things to consider when deciding whether to rent or buy include the fact that when you pay off your mortgage the home belongs to you. If your home has appreciated more than the taxes, mortgage and interest you’ve paid in – you’ve earned a return or simply break even.

Keep in mind that owning a home also qualifies you for tax incentives that can offset some of the costs. But even though you may own your house outright, you’ll still pay a significant amount of taxes and interest.

Other Things to Consider

You should also realize that renting isn’t exactly “throwing your money away.” You get a place to live and you don’t have to pay for issues such as repairs and maintenance. So, rather than make a decision on what the headlines are saying about home ownership being the best route, you should consider your current situation.

Figure it out by researching the pros and cons of homeownership, crunching numbers and taking a long, hard look at your finances and lifestyle. You may be moving from place to place in your career and don’t need the hassle of putting your house on the market every year or so.

Consider the cost of housing in your area. Houses may be too expensive for your pocketbook right now, so it could be better to rent. But renting may also be expensive and owning a home might be the better option.

Owning a home is possibly the ultimate Filipino dream. It gives every Filipino family a sense of security, knowing that no matter what, there will always be a roof over their heads.

However, as with any dream, the path to achieving this goal is frequently difficult, and the first-time homebuyer is almost always tempted to settle for the first house that falls within his or her price range without giving the purchase much thought.

Investing in real estate is not something to be taken lightly because it is expensive and requires careful planning. With so many properties being built in the Philippines, some people are having difficulty deciding where they want to live. Even if they have sufficient funds in their bank accounts, others are hesitant to begin the process of purchasing their home and lot. Why? Simply because they believe they lack the knowledge in real estate.

Here’s some useful tips in buying a home that will help in buying your own property:

Know Your Needs

There is a wide range of houses and condominiums available, and selecting one is likely to be the first major decision. Consider whether you want to live in a single-family home with a space for your mini garden, a condominium where the maintenance is handled by a property management office, or maybe a retirement home like a House and Lot near the Beach or a House in Tagaytay.

Consider the overall utility you want. How may bedrooms do you require? How many bathrooms are there? Do you prefer a separate family room for your children or a den for your privacy? Or maybe a room for your home-office setup? How luxurious or spacious would you like your kitchen to be?

List these characteristics in order of importance.

Research the Market

Before you decide to buy real estate in the Philippines, there are several factors to consider. That is why research is required before deciding to buy a property here in the Philippines.

First is location, you must be aware of the most suitable location for your needs and desires. It is critical because not only will it be your permanent home address for a long period of time, but the location will also determine the cost of the house and lot that you will purchase.

You can consider major cities like Metro Manila or maybe settle in Laguna or Cavite where there are more greeneries and less pollution. 

Every neighborhood has advantages and disadvantages, so think about what kind of neighborhood you want for your family. Are there any amenities that you require in the area? Do you need it to be close to your workplace, school, or public transportation? How safe is the area in terms of natural disasters, diseases, and crime? Is there another purpose you have in mind for your house and lot besides residence? Will it only be a vacation home? Is it something you want to invest in for your family’s future?

Your Budget and Financing

Make a Budget and stick to it. This usually requires a thorough examination of your financial situation. Determine your price range and how much cash you have available for the deposit and buying costs. This will allow you to determine the type of property you can afford.

In purchasing a property, you need to prepare at least 20% of the purchase price to qualify for an 80 percent loan-to-value ratio loan, and an additional 5 to 8% of the property’s purchase price to cover miscellaneous fees and other closing costs.

For preselling properties, developers nowadays, have installment options for the downpayment. If you are not in a hurry to move-in to your target property then, you can avail this option and pay the monthly installment on a longer-term period instead of paying the downpayment upfront.

You’ll know what kind of property and where you can afford once you’ve determined your budget. Do you want the biggest and best house you can afford in the best neighborhood, or do you prefer a more conservative overhead and debt?

Do you have Enough Savings?

When you buy your property or first home, the process does not end. In addition to the mortgage payment, there are other expenses to consider, such as repairs, association fees, insurance, and so on. The general rule is that you should not spend more than 30% of your monthly income on paying off your mortgage loan; anything higher than this will make it difficult to meet your other obligations.

Here are some of the other expenses you might want to save for after moving in.

1. Cost of furniture and appliances for your new home
2. Cost of redesigning or renovation (for example you want a bigger kitchen)
3. Association dues and insurances.

Seek a Real Estate Professional

Real estate Professional like a Real Estate Broker or Agent will help you locate several homes that meet your needs, assist you in selecting the right home, negotiating the terms and conditions of purchase, and guiding you through the entire process.

Real Estate Professionals can also assist you in locating the best mortgage loan for your specific situation. They can organize and manage the paperwork to ensure that the transaction goes smoothly.

First-time buyers are often nervous, but seeking professional advice can help alleviate their anxiety. Tell the professionals what you want and allow them to assist you.