LAGUNA-BASED P.A. Alvarez Properties and Development Corp. (PA Properties) believes the “Fillennials,” the Filipino millennials, are one of today’s largest group of property hunters.
“Like any other person searching for a house, purchasing a new home for the first time is exciting, but can also be daunting,” the 24-year-old developer said in a statement.
Here are some tips from PA Properties for first-time Fillennial home buyers:
Assess your cash flow
The first step is to know how much you’re earning, how much you’re saving, or, if you’re not saving, how much you’re actually spending every month. You need to know where your money is going to put together any kind of plan to achieve your home ownership goal.
Financial advisors suggest spending no more than 28 percent of your gross income on housing in any given month. Keep in mind that monthly payments encompass more than just the mortgage; they also include interest, property taxes and insurance on the house.
Get pre-approved for a housing loan
Most realtors and sellers are not willing to provide you with assistance if you do not have some type of proof that you have qualified. The beautiful part of purchasing a real-estate property while young is that most financial institutions and companies are willing to give more leeway.
This is because it is assumed that young people still have many years ahead of them to pay off their debt. Fillennials should consider whether their current (and not their expected) income is capable of sustaining the monthly payments.
Create an emergency fund
Financially speaking, there are many costs involved in purchasing a new home. Down payments, furnishings and unexpected costs can add up quickly.
Take the initiative before investing in your new home by setting up an emergency fund. Determine how much you are able to set aside every month and continue saving up until you cover the costs of home ownership completely.
Build your credit
If you are planning to purchase a new home for the first time, a good credit rating shows banks and financial advisors that you are prepared to commit financially to purchasing a new home. Start and maintain your credit by using your credit card for small purchases, and ensuring your payments are on time.
Plan for surprises
Buying a new home comes with expenses, such as down payments, property taxes, insurance, moving costs and maintenance. In terms of maintenance and repairs, keep tab on when appliances are purchased and installed so you’ll have a better idea of when they’ll need to be replaced. Also, keep in mind that the cost of repairs and maintenance can represent 10 percent to 20 percent of the price of the home each year. The expenses don’t end at closing. You should also budget for moving costs, which vary but can set you back a couple thousand pesos.
Choose your location wisely
Regardless of whether you are purchasing a starter home or a permanent home, choosing the right location is an important factor to consider. The location of a home directly affects the resale value, and influences the potential for your investment to grow. Ensure your location reflects your lifestyle, but also take into consideration the potential for resale.
Get to know the neighborhood
While location is an important factor to consider in home purchase, exploring the area before making the purchase is equally crucial. It is advisable to walk around the neighborhood, both during the day and at night. Make sure you feel safe and good about it.
PA Properties said one of the most important factors to consider when buying a house is the actual location of the property. You can buy a brand-new condo in a great building, but if it’s in a terrible neighborhood with no amenities and you can’t have the lifestyle you want, you’re in the wrong place. Ultimately, you can always change the finishing of your home, but you can’t change the location.