One could only wish to buy a house on a whim. “I feel like buying a house today!”
There are a few who can say that, but majority of us need to save up or plan ahead before buying a home. There key items to consider when planning:
It is a given that you have a need to have a house of your own. Either you are getting married soon, preparing for the new family home; desiring to live independently; or aiming to earn through a property investment. Whatever your goals and intentions are, they need to be constrained within realizable limits. You should spend only or pay for what you can afford.
If you have not yet saved enough to pay the full price in cash, you’d have to pay monthly amortizations. The rule-of-thumb here is that your monthly cash income should be three time (3x) the monthly house payments for the house. That is the prudent amount that even the lenders (banks and the Pag-Ibig fund) are following. You’re allowed to use 2/3 of your income for other expense items. So, what is that amount?
Where do you wish to reside in? How near should it be to your favorite destinations? How many bedrooms should the house have; and how spacious should it be? Are you looking forward to a village with its own swimming pool or a basketball court? Does the house have to be inside a gated village with security and maintenance service? You have the freedom to choose, only limited by No.1 above – you budget.
Most house purchases will require equity or down payment. Again, given your established budget, how soon and how long can you pay for this? Most allow for 12 months equity payment with zero interest. Some developers allow for longer periods. The latter means the construction of the house should happen later as well.
It may also be that you’re waiting for an expected bonus or the maturity of a time deposit. There are external factors too. Some wait for promos from buyers when they give out discounts or lighter payment terms. Like in these times, due to the recent lockdowns, developers are trying to make up for lost revenues. Hence, they are more buyer-friendly!
Now, having determined what you need, what you want, and when you are to have it, you are now to lay out your options. There should be several house and lots being offered by real estate developers or individual resellers, do your research. Gather data (selling prices, lot areas, floor areas, amenity list, location, etc.). Make a table comparing your options.
As there are many characteristics or variables, consider giving a priority rating or percentage weight to each one. Then establish a rating system. Say, 1 to 5, with 5 as highest. Multiply your rating with the % weight to get the score per criteria or factor. Finally add and compare.
I’ve attached here a sample Excel file for you to use. Feel free to modify according to your preferences.
Dream. It’s wonderful to have aspirations and goals. It’s important to see them through though by taking action, and thinking things through prior.