Experts’ advice in buying first home

Charles E. Buban
Philippine Daily Inquirer
November 13, 2009 20:40:00

MANILA, Philippines--Having a house that one can call his own remains one of the lifelong objectives for a lot of Filipinos.

This would probably explain why even during the height of the global financial crisis, Filipinos hardly missed a beat buying their dream home.

In fact, bank lending to the real estate sector, both for personal and commercial construction of houses remained relatively high according to Antonio Moncupa, president of EastWest Banking Corp.

“In general, when you talk about Filipinos, there’s really a big, big desire to own a house. That’s what distinguishes us from the rest of Asia and other markets,” he noted.

This also means lots of emotions involved when deciding which home to buy.

“Buying a house is one of the major investments they will ever make in their lifetime so quality and the so-called look and feel of the house they are considering is important,” architect Roger Villarosa said.

Preference

According to him, majority of Filipino homebuyers would rather prefer a spacious floor space like what is being offered at West Parc Condominiums, a 15-story project in Alabang that Villarosa helped design for Filinvest.

“The units here offer ample space that matches every homebuyer—from yuppies and retired couples who would rather prefer a much smaller, more manageable space to newlyweds and growing families who would naturally require more space. In fact, if they want an even bigger space West Parc Condominiums could combine adjacent units,” Villarosa described.

For Filinvest, he also designed several projects that offer excellent location.

“Location would be the main draw of The Entrata and Studio Two, which are just among the many vertical projects of the Filinvest Group,” Villarosa said.

Occupying an entire block, he said The Entrata enjoys a prime location as it is flanked by Festival Supermall and South Station.

While The Entrata is master-planned commercial, retail, Small Office-Home Office complex situated at the main gateway to Filinvest Corporate City, the Studio Two is a 14-story residential condominium located inside Northgate Cyberzone in Filinvest Corporate City, Alabang.

While buying a home is challenging and emotional Moncupa and Villarosa shared that the following tips should prove useful:

1 Make sure you are buying from a reputable developer. Remember the real estate bubble of the late ’90s when a lot of developers failed to deliver on their promises? The most important lesson from that bubble is to stick with the developer you can trust. “There is a huge difference between, say, a name like Filinvest and another unknown name,” Moncupa suggested. As one of the country’s largest and most diverse developers, Filinvest has developed more than 2,000 hectares of land for 100,000 families nationwide for the past 40 years.

2 Canvass mortgage loan terms. “On anything that’s a major purchase, it is still best to make sure the mortgage loan term is workable on the long-term,” Moncupa suggested. For some, monthly amortization will be the center of concern, for some interest rates. Generally, the lower the monthly mortgage payments, the higher the interest rates.

3 Take time to assess what you want versus what you can afford. “Life is all about estimating reality. Those who can estimate nearest to reality will be happier. Be sure you understand your true situation and that your income is consistent with your dreams,” Moncupa advised. What happens when you don’t? Moncupa warned that you may suffer from foreclosure. He said make sure to balance affordability and marketability of your house, so that if things get difficult financially, you can sell it at a higher price.

4 Plan ahead with the size of your family in mind. If you are a newly married couple, it may be more realistic to invest in a home where children can have a room of their own or ample space for them to run free. Consider buying a one- to two- bedroom unit rather than a studio-type unit.

5 Pay close attention to lighting and ventilation. The standard size for windows is 1.2 x 1.2 meters. Ample-sized windows allow for good lighting and ventilation. “Good ventilation will help you reduce air-conditioning and lighting costs in the long-term,” Villarosa said.

6 Be sure you check for anti-termite treatment. “Termites can eat up your entire house in a year,” Villarosa reminded so ask if there is soil poisoning in the area and make sure your new home is treated against these voracious pests.

7 As much as possible, go for long-term, fixed home-lending rates. Moncupa suggested that mortgage rates now among banks don’t vary much, and if these rates will go up in the future, they will not be far from the 8 to 9 percent rate banks currently charge. However, to be sure sudden market volatility caused by unforeseen financial upheavals doesn’t hit you, go for long-term fixed rates. Home loans are good debt; they give you a good place to stay, as well as equity in an asset that you can sell in the future. “Don’t look at your house only as fulfillment of your dreams, but also as savings,” Moncupa said.

8 Shop around for mortgage redemption insurance. A few know that it is against Bangko Sentral ng Pilipinas’ regulations for banks to require their borrowers to get mortgage redemption insurance—insurance that protects the bank in case the borrower dies—from the bank itself. So shop around because the premium rates for MRI vary widely among banks, and if you find the rates steep, don’t be shy to ask for a discount.

9 Put your family in mind. Don’t just go for the cheaper alternative. Always have your family’s interest at heart when you buy a home. Offer them peace of mind in a home they can also love and embrace as their own.

10 Whatever you do, think carefully and objectively. Take your time. Doing this right will help you truly enjoy the home of your dreams.