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Improve your chances of owning a dream house PDF Print E-mail
Written by Tina Arceo-Dumlao   
Monday, 12 November 2007
ImageWITH INTEREST rates on home loans down to very attractive levels, it is no wonder then that many Filipinos are enticed to make a beeline for the nearest bank branch and sign up for a housing loan.

After all, almost every Filipino dreams of having his own home.

But then it pays to take a few moments to determine if you are financially ready to take on a home loan. No matter how attractive the interest rates, the fact is that the housing loan would put a strain on monthly finances. It also does not mean that the current low rates offered by the banks would not go up sometime in the future.

Metropolitan Bank and Trust Co., one of the country's biggest banks, offers a few pointers to help improve chances of owning that home.

When you have finally decided that you want to buy or build a house, the following should guide you in your planning:

Develop a monthly budget, which will include household expenses, bills and other regular payables.

Based on the monthly budget, make an annual budget, adding 15 percent on each item or to the total expenditure to allow for inflation.

Compare the money you earn versus the money you spend so you can see how much extra money you have for the monthly amortization of the housing loan. Spare bonuses or commissions from computations. You can add them instead to your savings.
See if you can pay off minor debts before you apply for a housing loan. The less debt you have, the easier it is for you to manage your finances and the better the chances of getting a home financing loan.

It would be helpful to know your present cash position to help you decide on how you can finance your acquisition or construction. And if your finances would require you to get a loan, you may also want to start planning how you will finance the amount of equity you will have to shell out.

Consult with the members of the household. Buying or constructing a house should be a family decision because it may mean cutting down on other expenses like entertainment to make way for the housing loan.

If you are buying a house, Metrobank offers these suggestions:

  • In selecting a house to buy, one should consider budget, location and lifestyle. Since it would be impossible to meet all requirements, aim to meet at least two considerations most important to you like budget and location.

  • Buy only from a reputable real estate developer. If it is not a brand-new house, deal only with authorized or licensed real estate brokers, or better yet, the owner himself.

  • Make sure the property is not overpriced by consulting the City Assessors' Office at the city hall. You can also check out the classified ads to get some idea of the price range.

  • Verify with the Registry of Deeds if the original title is free from liens and encumbrances. Some properties have titles which are unacceptable for mortgage and may pose some problems in the future.

If you are constructing a house:

  • Research in magazines and books.

  • Work with experts your friends recommend based on their own experience.

  • Finalize the design based on your budget.

  • Be in charge. Ask questions, make suggestions and be involved. It is your house.

  • Try to stick to your first choices. Once work is underway, changes should be kept to a minimum. Revisions entail additional cost and delays in the completion of the project.

  • Keep in close contact with your contractor.

  • Flexibility should be considered. Whether buying a house or constructing one, there should always be provisions for future expansion.

Once you decide to get a loan to help bankroll either the house construction or the purchase of a new house, it's time to scout the banks to determine which one offers the best deal.

Most major banks like Metrobank require a gross monthly family income of at least P40,000 to qualify for a housing loan.

Take the effort to compare the offers of the different banks because a housing loan is a long-term arrangement and it represents one of the biggest loans that a person would get in a lifetime.

[The Philippine Daily Inquirer]

Last Updated ( Monday, 12 November 2007 )
 
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