Homeownership is a priority for many Filipinos. And though the World Bank classifies the Philippines as a lower middle-income country, Filipinos are willing to take on sacrifices and make ends meet to fulfill this life goal. In fact, a 2022 survey conducted by the Philippine Statistics Authority (PSA) revealed that nearly two-thirds of Filipino households own their homes.

However, homeownership comes with a huge financial responsibility. If you’re looking for your first home, here are some practical tips to avoid the pitfalls of homeownership and make the most of your investment!

 

1. Pick the right location and developer for long-term appreciation

The value of your property over time will be greatly affected by the quality of the developer and the neighborhood where it is located.

Choose a location with a safe, decent, and developing neighborhood. Ideally, your future home should be close to stores, restaurants, schools, and healthcare facilities. 

Do some background research on the reputation and previous projects of the developer responsible for building the property. See if their properties are up to standard and if previous tenants had any problems living there. 

 

2. Thoroughly inspect newbuilds or second-hand properties

Discovering issues with your home after purchase can be stressful, costly, and time-consuming. Practice due diligence to inspect the property you plan to buy, whether it's newly built or pre-owned. 

Consult with experienced professionals such as a professional home inspector to help assess current and potential problems with the property. With their help, you can negotiate repairs or adjust the purchase price. 

 

3. Save up for better financing options and terms

Develop a financial strategy to save for your home’s downpayment. By building good credit and a substantial financial nest, you are in a better position to negotiate for better financing terms.

How to develop good saving habits? Consider cutting back on non-essential expenses and setting up an automatic transfer to a separate savings account. Monitor your monthly spending and establish a dedicated savings plan to fund your dream home.   

 

4. Choose a mortgage that fits your budget and lifestyle  

When buying a home, consider the available financing options. Choose one that will allow you to consistently pay for your home as time passes. Consider how much you currently earn and your monthly expenses to determine the right mortgage. It’s worth the effort to compare rates and terms to find the best mortgage deal:

  • Fixed-Rate Mortgages – These are home loans with interest rates that stay the same, it is easier to plan your budget with fixed-rate mortgages. The downside to this financing option is its higher interest rates and payments in the first few years.

  • Variable-Rate Mortgages – A type of home loan with an interest rate that changes depending on the economic index. So, if interest rates rise then your payments will too. You would need to be more careful in how you plan your spending with this type of loan.

  • Short-Term Loans – These consist of substantially higher payments for your home that last around 15 to 30 years. With this home loan, you can secure the equity for your home much faster. However, it will still need to be assessed if you earn enough to qualify for this type of loan.

Choose a financing option with a lower interest rate as it helps reduce your overall costs. Be sure to check for any additional fees or hidden costs associated with each mortgage option.

 

5. Find reliable lawyers, financial advisors, and real estate agents 

It can be difficult to sort through all the legal paperwork and complicated processes involved in buying a home. You need the help of experts to make the right decisions and avoid any unnecessary problems down the line. 

A real estate agent can guide you through the buying process and negotiate on your behalf, while a lawyer can ensure that all legal aspects are handled properly. Financial advisors can help you understand the long-term implications of your investment. Engaging these professionals early in the process can provide peace of mind and protect your best interest throughout the transaction.

By planning out your homebuying decisions, such as saving diligently for a down payment, and consulting with professionals, owning your dream home can be a fulfilling journey. With persistence and determination, you are this much closer to paving the way for a brighter, more secure future in your very first home.

 

Being a homeowner is a great step in building wealth for the future. If you want to protect and preserve your wealth for your family, look into Sun Life’s estate preservation insurance plan. SUN Life Legacy is a comprehensive plan designed to protect your accumulated wealth, ensure your family's financial security through guaranteed benefits, and provide a regular stream of income for retirement.

Talk to one of our financial advisors to learn more about how you can prepare to buy your first home today. 

 

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