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Written by: Rita Magallona

It’s never too early to talk about life goals. Be it traveling around the world, starting a family, or launching a startup, we all need dreams that give life meaning.

One life goal worthy of the name is buying a home. Whether it is a condominium unit or a freestanding house, this purchase is a long-term commitment.

Do you have a firm financial foundation, or are you building your house on sand? Let’s go through the financial planning questions that you need to address as a first-time home buyer.

4 Financial Questions for First-Time Home Buyers

1. Can You Pay for the Monthly Amortizations?

A casual look at real estate ads will show you homes worth millions. Unless you come from a wealthy family and can pay in cash, you will have to borrow money from a bank to make the purchase.

To make this work, you should have a stable source of income. Can 28% of your monthly income cover the amortization for the next 20-30 years?

2. Can You Afford the Down Payment?

Most banks will not give you the full appraised value of the property you intend to buy. They will only give you 80% of the amount you need – or less. You will have to pay the remaining 20% (or more) to the seller.

Where will the rest come from? It is important to have saved a fairly large sum to cover the down payment before committing to buy a home.

are-you-financially-ready-buy-home-woman-calculator

However, if you’re planning on buying brand-new property, especially pre-selling condominiums, the developer often offers a “rent-to-own” scheme. Here, even the down payment is payable in monthly amortizations over a period of about two to five years.

Take note that this initial amortization will become much higher once the downpayment is completed and the transition to a bank loan is done. So, make preparations during that time when you’re paying a smaller amount.

3. Can You Secure the Legal Requirements?

Buying a home is not like buying a pair of shoes. With shoes, you just pay the price written on the tag and they are yours. Purchasing a home requires a lot of paperwork, which means additional costs.

  • Documentary Stamps Tax – P15 for every P1,000 of the Fair Market Value of the property
  • Local Transfer Tax – 0.5% to 0.75% of the property selling price
  • Notarial Fee – 0.1% to 0.15%
  • Bank Loan Fees
  • Mortgage Redemption Insurance
  • Fire Insurance

4. Can You Still Live on What’s Left?

On top of all that, consider the costs of moving, appliances, security, and furniture. You also need to set aside funds for maintenance in case something breaks or leaks.

If you are living in a subdivision or a condominium building, add the association dues to your list of bills to pay. Plus, you need to pay real property tax annually.

Home ownership may sound daunting, but it’s one dream that’s worth the cost. A home will provide a measure of security for you and your family for decades to come.

Looking for home financing options? Find out how to improve your chances of getting your Pag-IBIG loan approved.

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get an agent

Buy with an Agent

Dedicated experts at your service

FOR OFWS

Buy a Property in the Philippines

Come home to the property of your dreams.

Buying for Investment

While you’re away, we take care of your property investment.

Buying for Home Ownership

We help OFWs find their forever home.

DO IT YOURSELF​

Prefer to do-it-yourself?

Check out how our platform can help

Browse Resale Listings

Connect with sellers through our app

ARTICLES​

Steps for First Time Buyers

Like any new experience, buying a home for the first time is daunting.

Home Buying for Your Family

Make sure you’ve thought about these things before you decide to buy a house.

Get The E-Book

Sell

get an agent

Sell with an Agent

Dedicated experts at your service

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Post a Listing for Free

Connect with buyers through our app

Articles

Factors Affecting Home Value

Know the factors that affect property value before you buy a home.

Mistakes to Avoid in Selling

Make sure you’re not committing any of these fairly small, common mistakes.

Passive Income from Real Estate?

Real estate generally appreciates in value and can also be rented out.

Sell Your Property Fast

This is how you can attract more homebuyers.

Get The E-Book

For Tenants

get an agent

Rent with an Agent

Dedicated experts at ayour service

ARTICLES

Renting vs. Owning

Either way, it’s much easier outside Manila.

House or Condo?

Both have advantages and limitations. Everyone has different preferences.

Do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Search or Post your home

Connect with landlords through the app

For Landlords

get an agent

Lease with an Agent

Dedicated experts at your service

ARTICLES​

Assessing Property Value

Of course, knowing your property’s true value is key to any great investment.

Home Staging Tips

With this checklist, you get a better chance of finding a long-term tenant.

Do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Search or Post your home

Connect with tenants through the app

Our Properties

By Developer

SMDC

Properties from the good guys.

Robinsons Land

Raise, live, and connect.

Moldex Realty

The gateway to ideal community living.

PIK

Russia and Europe's largest homebuilder

For Ofws

What we do for OFWs

Safely secure your dream home from overseas.

Buying for Homeownership

Connecting you with the top developers nationwide.

Buying for Investment

For a seamless and stress-free property investment.

LOCATION GUIDES​

Life in SYNC is a Life Well Balanced

A good home gives good shelter, but a...

Quezon City Community Guide: Why Invest in Property in ‘QC

Quezon City is the Philippines’ second...

Break from the Metro: Why Buy a 
Home in Antipolo

While some seek their faith in Antipolo...

Buy a Home in Lipa for a Break from the Big City

Lipa continues to emerge as a good...

Finance & Investments

Your Starter Guide for Investing in Homes for Sale

Buying a home is a major expense but...

Why Employers Must Invest in Employees’ Homeownership

Employees sign-up and stay with the...

How to Successfully Save for Your Dream Home

With how high property prices are, ho...

Rent or Own? Either Way, It’s Easier Outside Manila

Manila has always been one of the co...

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