Bargain Home: Ways to Get a Good Deal on a House and Lot
The desire to buy a home increases as Filipinos grow older, a real estate portal Lamudi found in a 2015 report. Their aspiration to own a home is so strong, in fact, that some of them buy properties even with zero cash.
The desire for homeownership is growing, but the prices in the metro area unfortunately rising with it. An average condominium in the Makati Central Business District costs about 230,000 pesos! Lamudi also saw that those who are not willing to shell out the cash for a Manila condo are looking to provinces like Cavite to buy affordable townhouses.
If you’re one of these budget-oriented buyers, you’re probably still looking to get a lower price on a home you’ll purchase. After all, you still have to spend money on furniture, decorations, and bills! Here are some tips to help you strike a good deal on your house and lot.
Hire a Buyer’s Agent
You may have to spend a bit more to hire a buyer’s agent, but they’re worth the money. This is because they’re always updated about the property market, they have deep connections in the industry, and they’re bargaining experts. Tell them what you want in a home, and if you have a prospect already, show the agent the listing for it. They’ll likely find similar ones in a nearby location for a better price. Trust their judgment and give those properties a look.
Shop for a Good Loan
Housing loans help ease the cost of buying a new house. However, you may drown in debt if you choose one that doesn’t fit your monthly income.
First, figure out what kind of loan you’ll get. The most common ones are fixed-rate and adjustable-rate loans.
- A fixed-rate loan has a stable interest rate that does not increase or decrease. It’s the more expensive option up front, but it gives you an easy and predictable budgeting experience. You won’t be greeted by higher fees when the market is in crisis mode.
- An adjustable-rate loan, on the other hand, is fixed for a few months, then increases or decreases according to the lender’s preference. It’s much cheaper than the fixed-rate loan, but it’s possible that you may have to pay large amounts of money down the line because the interest spiked.
If you plan on keeping your home for a long time and you want to spread out your payments for an extended period, a fixed-rate loan is for you. But if you see yourself selling your house within five or so years, or you’re taking on a shorter loan, an adjustable-rate mortgage may save you a lot of cash.
When it comes to loan providers, Filipinos have two solid options: banks and Pag-IBIG funds.
- Pag-IBIG – This is a government-owned and operated company whose goal is to provide affordable home financing to Filipinos. If you’re employed in a corporation or government institution here in the Philippines, you’re likely paying membership contributions. These give you access to low-interest fixed-rate loans.
According to reports by news outlets like the Philippine Star, Pag-IBIG continues to have the lowest home loan interest rates, with just 5.375% per year for its regular plan. This plan also allows long-time members to get a loan of up to 6 million pesos. If you apply for their affordable housing program, you can get an interest rate as low as 3% a year.
- Bank Loans – Commercial banks, on the other hand, don’t require you to provide contributions or be a member. However, some of them may require you to have a salary of at least 40,000 pesos per month. And they mostly provide adjustable-rate payments, so you’ll only have a fixed interest for a few years, unlike Pag-IBIG, whose rate covers your entire loan period. Banks are not locked to a 6-million-peso limit, though.
If you’re planning to buy an affordable home and you want a long-term payment scheme, go with Pag-IBIG. If you’re eyeing a more expensive home, you may enjoy the higher-value loans that commercial banks give.
Another way to gauge your limits is by multiplying your annual salary by 2.5. If you’re earning 600,000 pesos every year, you won’t have a problem paying a loan for a 1.5 million-peso home. The value you get from this computation gives you leeway for other expenses like utility bills and food.
Improve Your Credit History
When it comes to buying Philippine property, experts say that sooner is always better than later. According to recent research by Asia Property HQ, real estate prices in the Philippines, especially those in Metro Manila, are rapidly rising. Rates saw an increase of over 5.7% in 2017, and luxury homes saw a price growth of 11.1% in 2018. Despite values continuing to rise, however, you may get a better deal if you take your time. Here’s why.
When you apply for a loan, agencies like Pag-IBIG or your bank will look at your credit history to determine how much interest you’ll get. Your credit history shows how responsible you are at paying off credit card debt and other bills.
If you have missed payments or have filed for bankruptcy before, banks may expect that you’ll repeat this behavior. They may give you a higher interest rate to cover the losses they would get if you missed a payment.
If you have a clean credit history of bills paid on time and little to no debt, banks may trust you to do the same to them. Therefore, they’ll have no problem giving you a low-interest rate.
If you think you are a high-risk client, you may want to focus on paying off your existing debts and bills on time for a couple of months, or even years. This way, you’ll be able to provide more desirable credit history and get lower monthly payments.
Getting a good price for your home doesn’t have to involve lengthy negotiations and complicated research on the housing market. As long as you have a real estate agent who can guide you to the right property, the right loan type and provider that will help you pay off your debts, and a great credit score, you’ll surely get a deal on a home that fits your needs and budget.
Find an Affordable Home for Your Growing Family
If you’re looking for a budget-friendly home that fits all your family’s needs, move to Micara Estates–Tanza. We offer townhouses with up to 3 bedrooms and 50 square meters of floor area. Our 70-hectare community has great amenities, such as 24/7 security, a multi-purpose basketball court, a convenience store, a gas station, and a shuttle service to the main highway. We’re also located near the Cavite Expressway, so you can come home to the cool and clean breeze of Cavite after a long workday at the Metro.
Visit us at 55 Tinio St. Barangay Addition Hills Mandaluyong City today for inquiries.