Whether looking at a starter home for your family or an investment for your hard-earned money, buying a residential property is always a big step for anyone. You may be planning to take that first step towards buying a house or a condo unit but worry that you might not be able to afford it. But there are ways you can prepare yourself for this long-term financial commitment — and it starts by arming yourself with the right information.
Get Your Financial Life In Order
Before anything else, it is important to know your financial standing. Where is your regular money coming from and where does it go every month? Do you have any major debt that you’re still paying off right now? How much savings do you have in the bank? Do you have enough to cover the down payment for a house or condo? Generally you will need about 10% – 20% of the selling price as a down payment. Take some time to assess your capability to pay in relation to what you spend. Even if you have a steady job that pays well at the moment, you should look ahead into the future and plan out how you can pay for a mortgage or amortization on top of your other expenses for the house. Figure in costs for paying taxes, repairs, and maintenance. Moreover, make sure that you can still keep a personal emergency fund for any unforeseen life events. You wouldn’t want to lose the property from defaulting on the payment because of a financial setback.
Check out Housing Loans
Take advantage of the housing loan offers of banks and reputable lending institutions. This is one of the easiest ways to finance a house or a condo without shelling out all the money upfront. Typically, banks and lending houses would grant as much as 90% of the price depending on their evaluation of your application. Get as much information as you can about the different loan packages that are available in the market today. Shop around and compare interest rates, terms of payment as well as the requirements that you need to submit to secure a loan. Learn the difference between fixed and variable interest rates and determine what is more advantageous for you. Most banks can offer you preferential rates and other added values if you are already an established client so leverage on your existing relationship with them. Find out as well if your own company provides housing loans or assistance packages for employees. It might be more beneficial for you to secure that loan from your employer.
Determine What You Want Versus What You Can Get
Think about what you’re looking for in your first home and compare that with what you can afford to get given your financial condition. Oftentimes people get caught up in unrealistic notions of what they should get and jump to hasty buying decisions without seriously considering all the aspects of owning and paying for a residential property. Make a list of your priorities such as location, property size, your personal needs and preferences, and other factors. There are certain elements you can compromise on especially if your budget is not big enough for your ultimate “dream house.” However, make sure to get a house or a condo unit that will appreciate in value over the years. Don’t just look at the bargain price – think of it as a profitable investment that you can use when the time comes that you will sell it.
Get a Real Estate or Property Consultant
While you can always do the house-hunting on your own, getting a property consultant can greatly help you in the process. Not only can he or she assist you in finding a house or condo that will suit your budget and your needs; the broker can also facilitate the loan arrangements and even secure a deal to your advantage. Property consultants may typically work exclusively for specific real estate developers but they have the wide network and professional expertise that you can take advantage of in your search for your first property investment. Consider the reputation and reliability of both the broker and the property developer. Choose a real estate agent who listens to your requirements, has a good knowledge of the market and can help you understand the options that can be available to you. He or she should be your partner in the whole process and not simply someone who markets a specific house or condo. Stay away from the property consultant who forces you to buy one property simply because he or she will earn a big commission out of the sale.
Consider Getting a Co-Borrower
If you are thinking of securing a home loan, consider asking someone to be a co-borrower. A joint loan may prove to be a good way to go about the process. There are lending institutions that tend to favor joint property financing over individual loans. In some instances, you can even secure a higher loan amount because the bank looks at the income and paying capability of the co-borrowers. Of course, if you can share the actual responsibility of paying for the house or condo it will ease the debt-burden for you. However, remember that your co-borrower would also get a share of the profits in case you sell the property. Find out what the requirements are for securing a joint home loan. Generally, banks allow spouses, parents, and siblings as co-borrowers. There are also institutions that allow for more than one co-borrower.
If you’re looking for a property that can be a profitable investment for you, take a look at Megaworld’s township developments. Aside from their strategic locations, these integrated communities are built with modern conveniences to suit your lifestyle needs. Megaworld’s pioneering concept of “live-work-play-learn-shop” ensures home buyers that they are purchasing not only a world-class property but one with increasing profit opportunities.
By: Nicole Adarme