Are You Ready To Buy A New Home?

Purchasing real estate property is exciting, especially if it is your first time. However, it can also be daunting. Before signing any documents, read up on what real estate broker Rochelle Granali has to say about making this once-in-a-lifetime investment: 

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1. Don't bite more than you can chew. 

A good rule of thumb is to allot a maximum of 30% of your income for amortization. Bank home loans vary and usually allot a 15-year term payment for a condominium and 20 years for a house and lot.

If you find bank interests too high, consider PAG-IBIG which offers Risk-Based Pricing Adjustments. Keep in mind that the amount loaned does not include association dues and parking fees. These are computed usually on a per-square-meter basis, but it varies from developer to developer.

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2. Know your rights as a real estate buyer. 

The Maceda Law, also known as The Realty Installment Buyer Act or Republic Act 6552, is a law that is a "public policy [that] protects buyers of real estate on installment payments against onerous and oppressive conditions. 

Meanwhile, PD 957 is commonly known as Subdivision and Condominium Buyers' Protective Decree. The primary purpose of this decree is to protect the buyers of condominium projects and subdivision developments against misrepresentations and fraudulent activities of developers, settlers and operators.  

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3. Don't be easily enticed by the "no down payment" promise. 

This does not mean the developer is giving you a free pass when it comes to playing the property's equity. It only means you are not required to pay the full amount in one go. This is because the down payment (or the equity) of the property is stretched throughout the allowable term given by the developer. 

For example, most developers usually require 20%  down payment, and the rest can be bank-financed or HDMF-financed (PAG-IBIG). With a "no down payment" scheme, the actual equity price is paid in increments over a period of several months or years. And it is only when that 20% downpayment is completed and when a loan for the remaining 80% has been taken out that the buyer can start moving into his or her property. So essentially, there is still a downpayment required. 

This article is based on a previously published article in November 2015 and orginally appeared in the August 2015 issue of Real Living Magazine.