Owning a home is a valuable investment for many Filipinos. It is a sign of security and stability. However, buying your first home takes a lot of commitment that involves being a responsible homeowner. It isn’t the same as shopping for clothes or shoes on an impulse, and when you’re not satisfied you can dispose of easily.
Do you think you are physically, mentally, emotionally, and financially ready to make your move? Here are eight ways to know if you’re ready to buy your first home.
1. You’ve prepared the right budget.
The first step is checking if your savings have enough zeros, and more cash deposits than withdrawals. This means you are not struggling to pay your bills anymore. Most importantly, you have money set aside for a down payment plus around three months’ worth of mortgage fees (if you’re planning to get a home loan).
Having savings is an important consideration before you think of shopping for a home. This will give you leverage especially if you are looking at a property that is in demand, and might be snapped up if you’re not able to pay for a reservation fee or a down payment immediately.
Tip: To make sure you can prepare your budget: identify your monthly expenses, cut down on unnecessary spending, and set aside set aside a portion to your home fund before using the rest on utilities, food, and leisure.
Think you’re a bit of an over spender? Check out how you can save up for a home.
2. You have a steady job history.
This information gives lenders more confidence that you can repay your home loan. Having a steady employment means working continuously for two years or more, even if not in the same job. However, it would look more attractive in your loan portfolio if you’ve been staying for the same company for that period of time.
The next consideration is directly related to this.
How to assess: Look at your resume. If there are gaps in your employment history (i.e. employed for two years, bum for a year, employed again for one year, and so on), banks and other lending institutions might not be receptive to giving you a loan.
3. You can afford to make monthly mortgage payments.
Having a stable job means having a steady and secured income that will show you are capable of paying your monthly mortgage. In order to know if you can afford to purchase a home, you have to determine how much you earn and how much debt you have.
How to assess: Take the “Are You Financially Ready to Buy a Home” quiz now!
4. You are planning to stay for the next five years or so in the same place.
When buying a home, you should not have plans for drastic changes (e.g. marriage, migration abroad, etc.) in your lifestyle that may require you to relocate. This is to ensure you’ll get your money’s worth when you resell your home. Remember, mortgages are likely to be higher the first few years you’re paying them.
Think about your other expenses such as the closing costs and the renovations as well. If you decide to sell your home before that time frame, you might not even break even.
5. You’ve contributed at least two years worth of contribution to Pag-IBIG Fund.
If you know you’re planning to buy a home and would need to get a loan, make sure you’re contributions to Pag-IBIG Fund are in order. Aside from Pag-IBIG Fund, Social Security System (SSS) also offer home loans. The minimum required contribution is at least one year continuous premium contribution or two years total contributions.
Tip: Contact Pag-IBIG Fund or SSS to check your contributions. While you’re at it, read on how to apply for a Pag-IBIG Housing Loan.
6. You have a good credit score.
Like any other loan application, lenders will analyze first if you have the ability to pay for your loans. And it is particularly helpful if you can show a credit history that presents your on-time payments and no existing delinquent accounts.
How to assess: Your credit statement is paid regularly and you don’t receive disconnection notices.
7. You’re confident about the home you want.
Whether it’s a house in Quezon City or a condominium in Makati, you are settled with a choice even before you hit the market.
This means you’ve conducted a thorough research on a property and its location, either by reading tons of articles that give you tips on smart home buying or talking to people who are experts in real estate. Furthermore, you don’t hesitate to ask smart questions when viewing a property or discussing the contract.
The important thing is you know that you will be getting a home that not only fits your budget, but also suits your needs.
8. You can manage your expectations.
You know for a fact that buying a home can be complicated and not everything will be perfect. Somewhere along the home buying process you might have to choose a different option such as selecting another floor or tower for a condo, but you’re ready for the challenge. Seeing as you’re well-informed, you’ll simply go back to your drawing board and see how the alternative will work for you.
Get your dream home
Like any other changes or developments you want to do in your life, careful planning plays a key role when buying your new home. It will help save time, effort, and money. Do you think you’re ready to buy your new home? Explore properties now!
How did you prepare yourself to buy your own home? We’d love to hear your stories. Share them in the comment section below.
