Tips for First Time Home Buyers in the Philippines [Free Checklist]

Have you reached that point in your life when you just know it’s time to move out and get your own house? Perhaps you want to have complete control over your house dues instead of paying monthly rent, or maybe it’s your first big step towards independence? Or perhaps you want to find other single-family homes for you and your family to live in?

Whatever your reason may be as a first-time buyer (or if you’re still having second thoughts), it’s worth knowing about the benefits of buying a house. Sure it may seem daunting, as much as it is exciting, at first, but there are undoubtedly several positive aspects to taking this big step in your life. For example, you get to pay stable housing expenses (contrary to paying rent monthly, where prices can go high or low, depending on the owner), have tax benefits, and own a property whose value increases over time, among others. 

With these considerations, you might find yourself more excited (or nervous) about buying your first property since there are several things to consider when buying a house. To help make up your mind and determine if you’re ready to start this potentially life-changing task, read on and check these first time home buyer tips:

Tip 1: Consider your budget

Before anything else, it’s vital that you’re fully aware of the expenses that come with purchasing your first house. After all, this is a long-term commitment. 

Ask yourself essential questions

You should first consider the cost of the property that you’re going to buy and your current financial status/level of income before going through the entire purchase process. Beyond the purchase price, you also need to consider other expenses (ex. homeowners association fees, property taxes, and the cost of improvements or repairs). How much is affordable to you? How much savings do you have?

If you’re getting a house loan, consider your current annual income. Do you have a consistent income that would allow you to pay for monthly costs? What is your debt to income ratio, and would you be able to handle paying for the necessities while managing your loan payments?

These are some of the questions that you need to ask yourself for you to estimate your budget and determine if you’re all set to proceed with your first-home purchase.

Getting a loan

If you plan on going for a housing loan program, you need first to check out the various options you have and choose one that best fits your paying capacity. For instance, do you want to get a loan from a private bank or a loan from Pag-IBIG? Here are a few things that you need to consider:

• Look into their requirements – Before you proceed with a loan, you need first to determine if you’re eligible. Besides required documents, some lenders also require a minimum gross monthly income before your loan is approved.
• Check the kind of loan they offer – For example, some private institutions offer “regular” home loans, while others provide a home equity loan program. Depending on your budget and how you’re willing to pay, you can choose among the different loans available. 
• Read about the loaning amount they can provide and their payment terms – What are the minimum and maximum loan amounts? You should also consider how long you would have to pay. On average, this could range from 1 to 20 years. The longer the payment term, the lower your monthly amortization amount is. However, you should also check their interest rates, as paying your loan for a longer payment term would also mean higher interest rates.

Compare these essential details when choosing between what loan best suits you and your financial capacity. To stress, you must remember that you still need to live your daily life. You need to have enough money for your everyday expenses like food, rent, bills, clothes, transportation, and other necessities while paying for your monthly amortization. So considering your budget is a crucial part of purchasing your house. 

Tip 2: Find a real estate agent

While you might opt to find a list of properties on your own for various reasons (financial and otherwise), it’s still highly recommended that you find an excellent real estate agent. Especially for a first-time homebuyer such as you, these agents can significantly help you throughout the process of buying your house, from referring developers and homes that meet your standards to helping you negotiate your buying price, among others. They can also help answer any questions that you might have about housing, as several terms might still be unfamiliar to you. 

Of course, you must find a real estate agent that won’t scam you and have your best interests in mind. That’s why it’s vital for you to still conduct your research. Even if your friends sent you some agent referrals, it’s still important to do a little background check. Whether they work under an agency or if they work freelance, you need to consider their credibility, including their license, knowledge about the real estate market, and their professional track record. Also, don’t shy away from asking them questions before and during the process of finding your perfect home.  

Tip 3: Find a house with the best location for you

Equally essential to take note of is the property’s location and accessibility. This also ties in with your budget since, for example, staying too far from your workplace can mean more expenses for transportation. But that’s just one aspect that you need to consider about the location as you’d want to make sure that you’re living at a place that you would feel most comfortable in. Here are some aspects of the site that you must consider:

• Workplace location – How far is the house from your workplace? Is it close to places with available public transportation that would allow you to travel to and from your workplace easily? 
• Proximity to establishments – Is it close to grocery stores, banks, schools, or hospitals/clinics? You can also consider your extracurricular activities and how significant these are for you in choosing your house location. For example, would you want to be near a gym or live in a village with a community pool? 
• Neighborhood features – What is the neighborhood like? Do they provide the security and amenities that you’d want to have? Even the outside of your house must meet the living standards you wish to have. 

While keeping these questions in mind, also remember to keep your mind open to several housing options. Take your time to ensure that the house you want is ideal for your living conditions. 

Tip 4: Conduct research on the developers/sellers

After considering your financial conditions and location, it’s also recommended that you look into the developers when choosing the perfect home. Many properties are available out there (a simple search about “available properties in the Philippines” would give you tons of results), but it really boils down to the developers behind the property you want. Find their company website or social media page and ensure that they’re credible. You can look into how long they’ve been in the industry, their previous projects (and how successful these were), what homeowners have said about them, and others. 

If you’re looking to buy a secondhand house, ask why the property is for sale. Then check the legal documents of the seller and verify that there are no legal cases involved with this property (you wouldn’t want to get involved with any ongoing legal issues!) 

Side tip: Of course, while conducting research and having a real estate agent would allow you to have a picture of what your house is going to be, it’s still crucial that you actually get to see the place itself. Look around the house and ensure that there is no damage. Also consider utilities, like plumbing and electricity, and the space. 

Tip 5: Prepare the essentials

Lastly, before you finally move in, it’s essential that you have all the proper documents. For instance, you need to ensure that you and the seller have finalized the Contract to Sell, the Deed of Sale, the Transfer of Certificate Title, Tax declaration, and other documents that might be required from you. 

Besides these documents, it’s also recommended that you think of furniture and other items you want to bring to your new house. Which appliances would you need? Which ones should you leave behind or sell? Picture this and plan it out before you start moving in to make things easier for you. 

Keep these tips for first-time homebuyers in mind before you choose and buy your house, and once everything is covered and finalized, you’re now ready to move in! Good luck, future homeowner!