Should I Secure a Housing Loan or Pay in Cash?

Much like the age-old dilemma of the chicken or the egg, the question of what the home seeker should be looking for first, a home for sale or a home loan, doesn’t exactly have a definitive answer.

However, unlike the first query, the topic on hand isn’t necessarily a fun dichotomy that is meant to baffle or entertain at parties. The question posed is a big life decision. It is more about making the best home-buying choice for your current individual situation.

Sure, maybe you can afford to pay for a home upfront without the need for a loan at all. But should you really? These days, doing so has become a rare occurrence. Having those kinds of resources is a privilege only a few of us get to have. There are certainly benefits to it, as well. These include having a simpler transaction process, forgoing interest rates, and lowering closing costs.

On the other hand, you are still going to dip into a large chunk of your savings. Some tax deductions and additional expenses still apply. You never know when financial woes can hit you or your family. They always seem to come at the most inopportune times. Owning a house and lot or condominium are assets that are fairly illiquid, too.

Whatever the case may be, let’s attempt to answer the question based on these contributing factors.

Timeline and Urgency

How attainable is a house and lot or condominium for your family at the moment? If it requires you to expend too much, too soon, then your most sensible option is to wait. Bigger families can sometimes take a decade before they actually move into a home of their own. There’s no shame in waiting, after all. Plus, some priorities, like education, healthcare, and other expenses, are just more urgent.

The only exception, of course, is seeing a home in the market that’s too good to pass up. For instance, there are plenty of affordable housing options available just outside the metro that are perfect if you work in the National Capital Region.

Cost of Property Based on Location

Location will always be a factor no matter what. In this section, we’ll try to give you a better feel of the housing market in Luzon, Visayas, and Mindanao by using their most populous city’s apartment averages as benchmarks.

These numbers are going to be lower for areas outside the cities, of course. You can expect to see a drop in the figures somewhere between the 10% and 20% range or even more for fringe districts. The developer, property type, and standard life conditions within the location will also affect the pricing. Nevertheless, these should serve as a respectable reference point in your home search.

What Type of Home Loan Is for You?

You can choose to chip away at the cost through in-house financing, bank financing, Pag-IBIG, or even SSS. Each of these come with their fair share of pros and cons. In-house financing, for instance, can mean higher interest rates with more flexible payment terms. 

Meanwhile, bank financing can give you lower interest rates if you can meet the requirements, which can oftentimes be strict. Employed, active Pag-IBIG and SSS contributors can turn to these government institutions for home loans, as well.

For a better understanding of what you can do with your home loan, check out this article.

What Loans Do You Qualify for?

How much can you loan for a home? That all depends on your financial capacity and the income bracket you are in. Home loan application approval is never guaranteed, of course. These institutions and banks still have the final say if you are qualified or not.

Still, the least you can do is have the right documents prepared before applying for a home loan. Relationship managers at Ohmyhome can also help you out in this regard, as well. They can present you with your best financing options before you actually make a final decision.

You can’t go wrong with a home loan. The only catch is if your current situation meets the standard qualifications. Finding a home first is great if you have the financial stability and resources to get it done. It seems like a cop-out but there isn’t one clear-cut conclusion here. What works for you, works for you. Just remember to consider the aforementioned factors before committing to a property.

Free Consultation

Are you interested in what Ohmyhome’s sales agents can do for you? Get in touch with an Ohmyhome agent today to start your property journey with a free property consultation. We offer services for buyers and renters, as well as landlords and tenants.

For more information, visit Ohmyhome.com for the best and latest homes for sale in the Philippines. Download the official Ohmyhome app today for the latest property listings and more. The app is available on Google Play and the App Store.

Ohmyhome was launched in the Philippines in September 2020, following the company’s establishment of a tech team in the country in 2017. Ohmyhome was originally founded in 2016, and subsequently rose in Singapore as a leading PropTech solution and licensed real estate agency.

Ohmyhome expanded into the Philippines so that Filipino home seekers can have a real estate partner that they can trust to have their best interests at heart and can be relied upon to provide exceptional services throughout the entire property journey.

Featuring thousands of properties across many of the Philippines’ major real estate brands, Ohmyhome differs from other local platforms by going the extra mile and extensively helping buyers narrow down the choices and find the property that best suits their budgets, home needs, and lifestyle preferences.

The company’s Real Estate Agents not only help in the shortlisting of options but also provide professional services through the entire purchasing process. These include assistance in property inspections, negotiations, the finalization of the Conditions of Sale, deposit collection, the submission of property documents, as well as providing buyers regular updates.

Ohmyhome helps Filipinos find their dream homes, all while making sure each real estate transaction is complete and is an efficient and enjoyable experience.