The outlook for the Philippines’ housing market remains rosy for 2020 as the sector continues its expansion phase. That means taking steps to owning property now—even a modest home or condo—will translate to your ability to have a home that appreciates in value for the next few years, even if you don’t plan on selling. This is the one great advantage of owning versus renting. But how do you get to the stage where you can actually call yourself a landowner?
Don’t just dream of owning a new home. Get smart and start using these strategies to secure your finances, not your landlord’s.
Get real about how much home you can afford
We’ve all dreamed of livin’ la vida luxe in a mansion with spacious rooms, walk-in closets, a swimming pool, and a sprawling, green lawn. While dreaming isn’t a bad thing, only people with pockets as deep as the Mariana Trench can make that mansion real in a snap.
Get to homeowner status faster by putting those mansion dreams on hold. You want something you can afford now, which means assessing your income. A general rule is to never allot more than 28 percent of your income to mortgage payments. So, shoot for a humble home or condo that plays to your current capabilities.
Resist the urge to go on shopping sprees
Payday is here, and there’s a big sale at the mall. Will you head home with your salary untouched or make a beeline for the nearest sale rack? If you chose the latter, you’re going to have a tougher time saving up for a home. It’s still possible (don’t worry) with a little work on your impulse control.
The next time you want something, ask yourself: Do I really need it? We’re talking essentials here. Yes, you probably need to eat three times a day, but that doesn’t mean you need to eat out for each meal. Brown-bag it and stockpile your money, because you’ll need to…
Zealously save for down payment
You will be taking out a loan for your home, and no bank will fund you unless you show them some money first. Most banks will require you to show proof of income and to shoulder at least 20 percent of the total home value. For a 2-million-peso home, that’s P400,000.
Got a lot of ground to cover? Then unleash your inner scrooge; he’ll help you stick to your new penny-pinching habits. The coming months or years might feel like an eternity of cost-cutting. But all those skipped takeouts and barkada blowouts will pay off once your housing loan gets approved in a matter of days.
Keep your eyes trained on foreclosed listings
Speaking of counting pennies (or, more accurately, centavos), sifting through lists of foreclosed properties is a great way to get a bargain home. These repossessed homes tend to be cheaper, because banks want to recover their losses as soon as possible. As long as you properly inspect the home you’re interested in and budget for repairs (which may be extensive), you’re in for a deal that’s hard to replicate.
Lists of foreclosed properties are usually posted on bank websites, PAG-IBIG, and compiler websites like ForeclosurePhilippines.com.
Shift your location obsession out of Metro Manila
Living in Metro Manila is an incredible convenience. Most government offices, jobs, special events, and major happenings are right here. But buying property here is only “affordable” to people like Mariana Trench guy.
If you want to pay off your mortgage in less than 10 years, sacrifice some of that urban convenience and seek out property farther away from the metropolis. Locate the right spot and you might be able to afford renting in the city while making payments for your starter home.
Buying a home requires months of preparation and a strict budget. That doesn’t always leave much room for other expenses. That’s where PeraJet comes in. We loan you small amounts fast, so you can stretch your budget and bridge gaps. Use our loan calculator to get a quote for your loan today.