You have probably read about my “awakening” and setting my priorities straightin a previous blog I wrote as well as how I started my plans to buy a house for myself.
In this blog entry, I am going to list down the steps on how and where I am at in my journey to getting that house that I can eventually call “my own”.
Step 1. Find the property you like and can afford.
It’s important that you can afford the property, whether it would be paid in installment or one-off. I don’t have a surplus of money and I want to make sure that my funds will steadily cover the mortgage or the downpayment. Thus, I emphasize affordability.
April 18 – My real estate agent/friend contacted me and recommended a property within the price range I can afford. I agreed to take it.
Step 2. Place a reservation fee to secure a unit under your name.
The more affordable the property is, the tighter the competition is in securing a unit. Do not hastily decide to place a reservation for a property though. Think about certain factors that may affect your decision. Bear in mind as well that reservation fees may or may not be refundable, thus, make an informed decision before saying “mine” to a property. Save yourself from time, money and efforts wasted.
April 19 – I placed a Php3,000 reservation fee for a unit. My agent then accomplished a Purchase Agreement Form on my behalf and sent it to me for signature. I am not sure if all purchase agreement forms are similar in content in most if not all developers, but they should contain your details and the quick details about the property that you are about to acquire. While some developers require an in-person visit from the buyer to fill out and sign forms and pay the reservation fee, I did mine all through online and email exchanges with my agent.
See to it that you review the contents of your form, particularly the Property Information section where the details about the house and lot unit you are about to acquire, the payment schemes to be adapted and the amount to be paid are elaborated.
Step 3. The paperwork.
From the time of the payment of the reservation fee, it will take 30 to 45 days for the acquisition documents to be processed and sent to you for signature (please bear in mind that this may be a case-to-case basis per developer, and also, factoring in the pandemic, personal appointments may be limited, thus processing of documents take more time than the usual.)
Read the documents carefully and sign only when everything is clear to you. Otherwise, clarify it with your agent.
The documents I need to sign are sent to me in soft copies and I need to attach my signature and send it back.
Step 4. Return the documents to your agent/seller.
Your agent will then submit the documents on your behalf (varies per developer) and further processing will be done.
Step 5. Pay the downpayment.
If you are on a stretched DP/installment payment scheme, see to it that you pay the downpayment every single month until the end of the DP term (usually around 12-36 months). During the period of DP payment, the developer will then be in the process of building your house.
You can use this period to grow extra money that you can use if ever you consider making improvements to your house, expansion, or renovation.
So my actual homebuying journey stops here. Nevertheless, I already have an idea of what to expect next. But this will take probably 2-3 years more but even so, I make sure to not miss payments otherwise I am going to lose the house!
Step 6. After completing the downpayment, your house will be ready for moving in and occupancy! (Spoiler alert: your monthly amortization starts. 😉😉)
Provided that you have paid for the additional charges, such as the utility installation (water and electricity, bonds imposed by the developer for minor and major renovations if you plan to do so, etc.) and the construction and turnover schedule are on time, you can move in to your new house already!
Unless you can afford a one-off payment of Php300,000 to a million pesos, you do not need to worry about monthly amortization. But for those, like me, who can only afford big-ticket purchases like a house through hulugan or amortization, paying the cost of the house monthly until completing the full payment is the way to go, hence, getting a housing loan. Before the turnover of your property, the housing loan will be processed for you by the developer. Common housing loans are applied through bank financing, in-house financing, or PAG-IBIG.
Step 7. Your house is yours as long as you don’t defer your loan payments.
You can occupy the house already, make home improvements to make your house feel like a home.