Buying a house is a huge milestone, which is why you should approach it with utmost care. This is especially because buying a house can also be a complicated affair. In particular, first-timers who may not have any idea about the intricacies of purchasing a property can easily get lost in all the details.
To avoid making mistakes when buying a house in the Philippines, here are some of the most important questions that you need to answer:
How Much Can I Afford?
The very first thing you need to determine when buying a house—or buying practically anything for that matter—is how much you can afford. A good benchmark for a monthly housing mortgage is no more than 28% of your take-home pay. This amount, more or less, will ensure that you still have enough for your other living expenses.
Knowing how much you can pay for your house each month can help also you plan your budget accordingly. Do note, however, that there are other recurring payments to consider such as annual real estate taxes and insurance fees. For complete first-time home buyers, you should also consider additional expenses such as furniture and appliance costs.
What Are My Financing Options?
The truth of the matter is that, more likely than not, your savings will not cover the entire cost of the house you want to buy. This doesn’t mean that you shouldn’t save up, of course. Rather, you should look at your financing options to supplement your savings.
Your best bet here will be a housing loan from a bank. Depending on factors such as the real estate developer and the size of the property, a bank can cover up to 90% of the TCP or total contract price. If the property is previously owned, the bank will usually call a third-party assessor to determine the value. Most bank housing loans have terms that last up to 5 or 10 years.
The government, through Pag-IBIG, can also provide you with financing options for buying a house. They can also cover up to 90% of either the TCP or the assessed value; in addition, the loan terms can last for up to 30 years maximum.
How Much Will I Spend on Furnishing the House?
As previously mentioned, there are other expenses when you buy a house beyond the contract price. These include the above-mentioned furniture and appliances, as well as any other home improvement projects you may want to do.
Do note that some homes come semi- or fully furnished but this will affect the final TCP. If you want to save, consider getting second-hand furniture, appliances, and home accessories. There are also a lot of bargain destinations in and around Metro Manila that can help you decorate on a budget.
For those buying semi- or fully furnished homes from previous owners, consider how much of the existing belongings you can or want to use. If there are any appliances included, check if everything is in good working order. If not or if you prefer newer, more energy-efficient models, then this means you have to handle the sale. The same goes for furniture.
Where Is the Property Located?
The location of the house primarily affects two things: accessibility and the intensity of disasters such as flash floods and earthquakes. For the former, a property that’s centrally located near schools, hospitals, and commercial establishments will definitely cost more. The trade-off is your convenience.
Regarding natural disasters, there are certain areas that are prone to flooding. Don’t just consider the actual place where the house is located; you should also think about the surrounding areas. If those places get flooded, for example, you can end up getting boxed in. If you can, you should also avoid buying properties near a fault line. Otherwise, make sure that your insurance has ample coverage for such events.
Do You Need to Repair Anything Before You Move In?
If you’re buying an existing property from a previous owner, ask for an extensive checklist of what has been done to the house. Be extra particular with plumbing, electrical plans, and previous pest infestations since these can be the root of big problems in the future. You should also check all renovations if they are up to code. Bring an inspector, if you must.
Doing this doesn’t mean that you’re paranoid or fearful that the seller will dupe you. Rather, it’s simply ensuring that you’re getting your money’s worth. Conducting inspections can also help you understand why the previous owner priced the property that way.
For newly built properties, it’s still a good idea to conduct inspections before signing anything. This way, you can have the developers deal with any issues before you completely move in.
It can be a little taxing to handle all the finer details of buying a house but it’s all for the best. If everything is ironed out, you’ll have more peace of mind and you’ll be able to enjoy your home, sweet home all the better.
