The process of buying a home in Cebu can be extremely exciting, but also very overwhelming. It is important to remember that this is likely the biggest financial decision you will make in your lifetime, so it is crucial to do your research before jumping into anything.
By taking the time to ask the right questions and become as informed as possible about the homebuying process, you can help ensure that you find the perfect home for you and your family.
If you’re looking to purchase a property, you might have a few questions. Like what is a mortgage and how does it work? Is a subdivision the best community to live in? Do not panic, here is your guide in buying a property.
Are You a New Homebuyer?
A beginner homebuyer is defined as someone who has never owned a home before or hasn’t owned a primary residence in the last three years. You may also qualify as a beginner buyer if you owned a piece of property that was damaged so badly that it doesn’t meet local and state codes. This means that it would cost more to restore the property than it would to buy new property.
A beginner home buyer can also be a parent who recently got divorced and owned a home with their former spouse. You may also qualify as a beginner home buyer if you have owned a primary residence within the last three years. However, the primary residence you owned cannot be a mobile home.
Different programs have different requirements. The best way to find out if you qualify for down payment assistance is to ask your lender or the organization you’re planning on buying from. That way, you’ll have a better idea of what kind of assistance you can receive.
Factors to Consider
Stable Job
One of the things that lenders will look at when you apply for a home loan is your ability to pay them back each month. That’s why having a stable source of income is important, as it shows that you’re less likely to miss monthly loan payments, especially if you have a long loan term of 20 to 25 years. If you have a steady job in a secure industry, then you’re well on your way to being prepared to handle the financial responsibility of owning a home.
Current Loans
If you’re currently juggling a car or business loan, you’ll find it easier to handle a home loan. Also, keeping your debt low will make it easier for banks to trust your ability to pay off a mortgage.
If you’re constantly falling back on payments, take some time to clear your debt or at least lessen it significantly. Besides, even if you do get approved for a mortgage, if you think handling one or two loans is hard enough, imagine what it’ll be like if you add one more to the mix.
Good Amount of Savings
Before you buy a home, be aware that there are other fees involved in addition to the purchase price. These include the documentary stamp tax, transfer fee, and registration fee. Plus, you have the cost of moving. And if you buy a home using a loan, you’ll have a monthly amortization payment, plus real property taxes.
If you’re living in a condo or subdivision, there will be homeowners’ association dues as well. And don’t forget home maintenance and repair costs, your family’s basic needs, and your emergency fund.
Mortgage Pre-approval
A mortgage pre-approval is a great way to get an estimate of how much you can borrow for your home loan. Checking out homes that are beyond your budget can be a waste of time, so getting a pre-approval ensures that you only look at properties that you can actually afford.
You can get pre-qualified for a loan at many different banks, but it’s important to find one with the best offers and terms. Once you’re pre-approved, you’ll know the loan amount, type of loan, and interest rate that will work best for you.
What is a Mortgage Loan?
There are a lot of different mortgages out there, and it’s important for homebuyers to realize that not all of them are equal. Different lenders offer different loan products, each with its own borrower-qualifying requirements.
For example, some lenders may allow you to borrow with a credit score of 540, while others may require a minimum score of 620. So it’s important to shop around and compare different loans before making a decision.
A mortgage is a financial transaction in which you borrow money to buy a property and agree to repay the debt over a set period of time. The loan is secured against the value of your home, which means that if you fail to keep up with your mortgage repayments, the lender could repossess your home.
While some people find the mortgage process to be a hassle, taking out a mortgage is often the only way to afford to buy your dream home. Homeownership is a significant undertaking, so it’s important to deal with a lender you trust and be prepared for the responsibilities that come with owning your own home.
When you take out a mortgage, your lender will want you to put some money down as a way of proving that you’re invested in the property (and therefore less likely to default on your payments).
The amount you’ll need to put down varies depending on the selling price of the house, but it can be as little as 3.5%. In some cases, you may be able to put down less than 20%, but this usually comes with the added cost of private mortgage insurance (PMI), which you’ll need to pay for until you’ve built up 20% equity in your home.
Key Takeaway
The process of buying a home in Cebu can be lengthy and stressful, but it’s worth it in the end if you end up with the home you love. To make sure you’re prepared for the process, do your research and know what to expect. That way, you can avoid any stressful surprises along the way.
