This is my first post about real estate. Actually, I’m planning to make this kind of article many months ago but I don’t have enough time to compose one. Hopefully, you can find some of our experiences valuable and learned from the experiences we encountered.
My wife and I bought our house and lot in January 2008. At that time, we are not prepared in terms of the things you should consider before buying a house.
We were not able to consult other people or relatives who are knowledgeable about real estate. We simply bought the house thinking it is a good deal and we are capable to pay for its monthly mortgage.
At first, we paid the 20% equity of the house and lot through in-house financing. By the way, our house is a detached one with 120 square meter lot. If you don’t know in-house financing, it is a type of mortgage wherein you will pay the mortgage to the seller directly with fixed or variable interest.The interest will be dependent on the terms and conditions in the contract to buy the house.
We planned to pay the house and lot for 10 years. The payment per month is considerably high, it is the reason almost of our income is going to the mortgage. At first, I did not realize it is big because I’m working abroad and my salary is a bit higher than when I worked at the Philippines.
However, as the time goes by and we got other expenses, paying for the monthly mortgage became difficult for us. There are times when we default in paying the mortgage, but the good thing is the seller is considerate. They gave us extension to pay for the amortization without interest provided we will tell them earlier that we cannot pay on time.
I want to list some of the tips or lessons we learned in buying our house and lot so you can get ideas before buying one. Here is goes.
1. Choose a good location.
If it is in the subdivision, it should be peaceful and with complete amenities or utility connections like water, electricity and telephone line. The location of our house inside the subdivision has no water connection. We don’t know at the beginning because we’re assuming it’s already there because it is a house inside a subdivision.
To be sure, you should ask to your agent all the things you may need just like the utilities available in your subdivision.
2. If you are building a new house, it would be better to have a sufficient fund until the completion of your house. If you don’t have enough money, you can apply a housing loan at Pag-IBIG, bank or to your rich relatives.
So far, Pag-IBIG has the lowest interest among housing lenders but the application process takes too long especially if you’re the one applying for a loan. In addition, there are also many documents you must submit before your appication will be processed and approved.
3. If you are applying a Pag-IBIG housing for your purchase of a house and lot, make sure you have an agent that will process and take care of the application. Usually, if you are buying a house, the agent is the one that also sells the house. They have the knowledge and experience in almost all Pag-IBIG transactions and they know the people working at Pag-IBIG so it will be easier and faster for your loan to be approved.
4. Do an early research if the developer of the subdivision is trustworthy and reliable.
Before you sign a contract to sell of a house and lot, make sure that the owner or developer of the house or subdivision is reliable and trustworthy of what he promised. You can make a research in the Internet or some friends regarding the developer you are dealing with so you can know if many people have problems dealing with them in the past.
5. As much as you can, don’t make a loan just to buy a house.
As much as possible, use your own money to build your dream house because interest from housing loan is very high in the Philippines. It would be better to save enough money to buy for a house than apply for a loan with high interest.
However, if you really want a house immediately, research for the lowest interest of housing loan among the banks in your place.
6. Ask for a good deal or bonuses.
Many developers and housing brokers offer discounts to cash buyers and those who will make an early down payment. Study first before you make a deal with them so you know if it is really the best one.
Buying a house is one of the toughest decisions you will encounter in your life because it is a long term investment. Once you started to pay for it, it will be very hard to give it up. So it is very important that you know your capability to pay and know your cash flow and expenses in the future.