“Can I already afford the house?”

The biggest and the most important question of all is: Can you already afford to buy a house NOW? Owning a house is probably the first biggest decision you will ever make as a family. Therefore, you need to make sure you’re ready, emotionally, and of course, financially. First, you need to learn how to assess your true NDI (Net Disposable Income). This technically refers to your Net Income minus taxes. However, you should also consider your Net Disposable income minus taxes minus expenses (bills, education, etc). As a general rule for bank approvals, most agents, real estate brokers and developers are using the “One-third rule” to initially assess financial capability. This computes for one third of your gross household monthly income. That figure is usually the monthly amortization that they earmark for you.

It is not advised that you stretch this earmarked amount just to obtain the house and lot that you want. Stick with your financial figures and look for the package that’s in line with it. Ideally, you should only be able to use up half your NDI for the monthly payments and the other half should be allocated for savings for emergency purposes.

Owning a house is probably the first biggest decision you will ever make as a family. Therefore, you need to make sure you’re ready, emotionally, and of course, financially. First, you need to learn how to assess your true NDI (Net Disposable Income). This technically refers to your Net Income minus taxes. However, you should also consider your Net Disposable income minus taxes minus expenses (bills, education, etc). As a general rule for bank approvals, most agents, real estate brokers and developers are using the “One-third rule” to initially assess financial capability. This computes for one third of your gross household monthly income. That figure is usually the monthly amortization that they earmark for you. It is not advised that you stretch this earmarked amount just to obtain the house and lot that you want. Stick with your financial figures and look for the package that’s in line with it. Ideally, you should only be able to use up half your NDI for the monthly payments and the other half should be allocated for savings for emergency purposes.

“Do I need to pay at least the down payment/equity on the spot?”

Most real estate developers offer staggered payment on equity of up to 15 months. But it is critical to know the desired timing of your move-in. Developers usually start with the construction or the ground work on your house when you’ve paid at least 10% of the total contract price (TCP). This usually coincides with bank or Pag-ibig approval.If you pay spot-cash down payment, you are usually entitled to

If you pay spot-cash down payment, you are usually entitled to further discount, which varies per season and per property or area. But it is best not to wait too long until you reserve and start payment. It is not advisable to wait until you have enough DP cash because by the time you have enough cash for DP, the price of the property will definitely be higher, and thus your saved money might still not be enough.

For most people, they already have some savings intended for their first house. It is best to mention this to your agent so that you can be offered a special payment scheme. For example, you have at least P100,000 already earmarked for your house, it may help to pay that upfront so that monthly payments for the DP can be significantly reduced. It may also be used to fast-track construction of your house

“What requirements or documents do I need to prepare?”

There is a long list of requirements for housing and these are usually bank requirements, which you really have to prepare ahead of time. Each house for sale unit may have their own set of requirements but this is a list of the most common ones:

STANDARD REQUIREMENTS

Birth Certificate (photocopies)

Marriage Certificate (photocopies)

2×2 pictures (Principal/Spouse/Co-Borrower/Attorney-in-fact)

Residence Certificate (Principal/Spouse /Co-Borrower/Attorney-in-fact)

Proof of Billing Address

Post Dated Checks (for equity)

2 valid Identification cards (Applicants/Spouse/Co-Borrower/Attorney-in-fact)

MAJOR REQUIREMENTS (LOCALLY EMPLOYED)

Photocopy of latest Income Tax Return and w-2

Original and Notarized Certificate of Employment and Compensation

Payslips for the last 3 months (Applicant/Spouse)

Bank Statement for the last 3 months

Major requirements differ per type of employment (Local, Self-employed, OFW). The list is available online upon simple Google search.

“What is the reservation fee really for?”

When you go on a tripping activity with any developer agent, they, of course, require a reservation fee to close the sale. This non-refundable reservation fee is more than a guarantee for the block and lot you wish to purchase. More importantly, it guarantees and reserves the price at the time of closing. The unit you want may actually still be there when you return a second time or sometime after that, but the chances that you’ll be able to get it at exactly the same price is perhaps very slim. The values of properties (lot) in the country have significantly appreciated over the last 5 years. This is especially true in areas like Antipolo, Cavite and Laguna where economic developments, as well as rapid migration of residents from Manila, are observed.

“When do I move in?”

Turn over period has become more and more important over the years because of the escalating rental rates even outside Metro Manila. As only 49% of those living in Metro Manila own their homes, the rest who are either renting or renting for free have no choice but to seek for their first homes in the next city centers (Antipolo, Cavite, Laguna, or Bulacan) mainly because of their accessibility and proximity to the work place/CBDs.

Given this, most developers let you move in after downpayment, but this usually coincides with either bank or Pag-ibig approval when both (DP and approval) are sufficed. Movement of course doesn’t come exactly right after or a few days after the fulfillment of these requisites. It usually takes another month or 2 to let finishings and furnishings settle in.

“What does Rent to Own really mean?”

The RENT-TO-OWN phrase has really been a puzzle for many. Some developers use it to connote staggered payment for downpayment as opposed to spot DP. Most of the time, homeseekers assume that it will have similar terms as when you move or transfer to a rental unit such that you just need to pay for least 2 months advance and 2 months deposit. But this is still short of the required equity even for low cost housing (less than P1M). Thus, some developers now offer affordable options for condo seekers. For one particular condo developer, client only needs to pay reservation fee of about P10,000, cash out 2.5% of total price and submit PDCs for the 7.5% payable in 15 months. Client can already move-in within a month after completion of requirements.

For house and lot, however, only a few developers offer real rent to own payment schemes. But it might also be worthwhile to check for Ready-For-Occupancy (RFO) units and inquire about a payment scheme with fast turnover period. You might chance upon an RFO promo that lets you move-in with low cash-out requirement and PDC guarantee.

“How can I ask for a discount?”

Normally, developers offer discounts for cash payments only, either for Cash TCP (total contract price) or for Spot DP (downpayment). But in some cases, they offer significant on-the-spot discounts for reservations on a limited time period. It ranges from P50,000 to as high as P150,000 depending on the unit type, whether a townhouse, single-detached or lot only. Don’t be afraid to ask for additional discounts and freebies from your agent as promos vary from one period to another depending on the time of month.

Insider Tip: Due to cut-off period, it might be better to reserve during end of month or first 3 days of the month where promos and discounts are usually applied to make sales quotas.

The real estate landscape in the country has changed dramatically over the past few years with the introduction of a myriad of innovative developers offering house and lot packages at very low prices. House cost has been significantly brought down by new technology in the construction industry such as precast, cast-in-place and other options. This is why the real estate industry has become more competitive now, more than ever. This also makes new homebuyers more astute and more discerning than in the old days when brand such as Camella was the sole the yard stick of quality. Home buyers nowadays ask more questions, inquire with more than one developer and are seldom impulsive with their decisions. If you think that you’re this kind of buyer who asks these abovementioned questions and more, don’t worry, you’re definitely part of the curve.

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