Here’s How You Can Buy a Home in Your 30s
By: Venus Zoleta
Published on: August 4, 2020 . Last updated: October 21, 2020 Category: Sponsored Content
Your 30s is the best age to buy a home. By now, you have a clear idea of what home-ownership means to you—whether it’s living independently, raising a family, or investing in real estate.
You’re more or less financially ready to own a house. You’ve likely built a stable career or business that brings in steady income. You’ve probably established a good credit history, which can help you get a home loan. You’re old enough to make a life-changing decision like buying a house, yet still young enough to have time to pay off a home loan.
As such, it’s hardly surprising that more Filipino millennials buy properties nowadays. Data from online mortgage broker Nook shows that 44% of home loans on its platform are acquired by millennials.
Ready to make that long-term financial commitment? To successfully buy a home in your 30s, understand how the usual home-buying process works in the Philippines.
Table of Contents
How to Buy a Home: 7 Steps for First-Time Home Buyers
1. Decide on Your Home-Buying Budget
Many first-time home-buyers immediately start shopping for properties without setting a budget first. That’s a common mistake you’d want to avoid because it’ll tempt you to spend your money on something you can’t afford.
It’s easy to fall in love with a stylish house with a breathtaking view. But what if it turns out to be expensive? So that your home purchase decision won’t be driven by emotion, determine a budget for buying your first house.
How much can you really afford to buy a home? The rule of thumb is to spend only 30% to 40% of your monthly salary on home loan repayments. For example, a 30-something with a monthly salary of PHP 100,000 can afford to repay up to P30,000 to P40,000 per month in home loan repayments.
This is just one way to estimate how much you can spend on a home. Your budget should still be based on your own financial situation.
Another way to know your ideal price range is to use an online calculator that computes how much you can borrow from lenders to buy a home based on your income.
Think long-term, too. Don’t overestimate your financial capacity to buy a home. You may be earning well in the present, but consider also that your employment status may change in the future. So it’s safe to be a bit conservative when estimating your home-buying budget.
2. Get Pre-Qualified for a Mortgage
Aside from knowing how much you can afford, it’s equally important to find out how much banks are willing to lend you.
What you think you can afford won’t necessarily match what lenders think you can afford. This is because banks look at different factors such as credit score and employment history to evaluate a borrower’s ability to repay a home loan.
This is why you should never skip the pre-qualification process in your home-buying journey. Getting pre-qualified lets you know how much you can borrow to buy a home and which banks you are qualified to lend from.
The traditional way to undergo pre-qualification is to go to each lender or real estate developer and submit your personal and financial information (salary, occupation, employers, sources of income, etc.) for review and wait for the entire process to be completed.
But there’s definitely a faster and more convenient way to get pre-qualified for a home loan. Through the Nook website, you can quickly complete the pre-qualification process and get results within just a few minutes. The results—which are based on your provided information—will show which banks you can borrow from and the monthly amortization and interest rate per bank.
3. Save Up for a Down Payment
Once you know how much you can afford and how much you can actually spend on a new home, the next thing you must prepare for is the down payment.
A down payment is an amount—specifically, a percentage of the property value—that home buyers pay out of pocket to buy a home. It’s typically at least 20% of the purchase price. The remaining balance can be paid over a certain period through a home loan.
Buying a condo unit worth PHP 1.5 million, for instance, will have you shelling out at least PHP 300,000 in down payment. Not everyone can pay such a huge amount upfront.
Start saving for your down payment as early as possible. It takes discipline, hard work, perseverance, and negotiation skills to overcome this challenge.
Having enough savings to pay upfront toward a home purchase is your proof to the lender of your financial capacity. This should motivate you to keep going until you hit your savings goal.
Here are a few tips to effectively save money for your down payment on a home:
- Set aside a fixed amount (from your salary, bonuses, 13th month pay, and other income sources) specifically for your home purchase savings.
- Find additional income sources (e.g., freelancing jobs, low-capital small business, etc.) if your paycheck isn’t enough to save for a down payment.
- Have a separate savings account for your down payment fund. Ideally, open a high-interest bank account with a passbook and no ATM card, so you won’t easily withdraw the money.
- Prioritize your crucial expenses and let go of frivolous spending.
- Negotiate with the developer or bank to make the down payment in monthly installments for one to two years instead of a larger one-time payment.
4. List Down Your Must-Haves
Before you start house hunting, make a checklist of what you want in a home. This will help you narrow down your options and make your search for the perfect home a lot faster.
Consider the following important factors:
- Location – Is the neighborhood safe? Is the property accessible to public transport, hospitals, schools, and commercial establishments?
- Amenities – What amenities are important to you? Swimming pool? Gym? Basketball court? Children’s playground?
- Property type – Are you looking for a house and lot (bungalow, duplex, townhouse, single-attached, single-detached, etc.), condo, or apartment?
- Property size – What is your preferred number of bedrooms and bathrooms, floor area, land size, etc.?
- Property status – Are you willing to buy an RFO (ready for occupancy), pre-selling, or foreclosed property
- Real estate developer – Does the developer have a good track record of constructing high-quality projects and completing projects on time? Is it a reputable company?
5. Shop for Homes
Search for properties with features you want and prices within your price range. You can browse homes online through the websites of real estate developers and property listing websites.
You may choose to shop around on your own. Or better yet, get a PRC-licensed real estate agent or broker to help you find homes for sale and guide you through the entire home-buying process.
6. Visit Possible Homes to Buy
List down the properties you’re considering to purchase and schedule a visit (together with your agent) to personally view each home. Contact the seller or developer and arrange for an ocular visit.
House viewing is a great opportunity not just to inspect potential homes but also to compare your options and ask questions about the property.
This step will take long to complete, especially if you’re always busy. But don’t rush it—take as much time as you need to make sure you choose the right home to buy.
7. Get a Home Loan
Found a home that meets all your requirements? Great! The next step is to secure a loan for financing your home purchase.
Finding and applying for a housing loan used to be a tedious process. But now, it’s simple and convenient to get a loan by working with an online mortgage broker.
Nook, for example, offers an easy-to-use online platform that enables users to find the best home loan, apply for one, and get approved.
Buying a home in the Philippines may seem complicated and overwhelming for a first-time buyer. But you can make things easier for you while making sure you won’t regret your purchase later on.
Remember to take your time when making a home-buying decision. Do your due diligence and carefully weigh your options.
Also, take advantage of the convenience of using the internet in every step of the process to buy a home—from setting your budget and getting pre-qualified to shopping for properties and getting a housing loan. Visit Nook to learn more about how you can easily apply for and get a home loan for making your dream house a reality.
This article was created in partnership with Nook. While we are financially compensated for this collaboration, we ensure to maintain our editorial integrity to provide you with the best recommendations that can help you make smarter financial decisions.
-  Millennials poised to drive the Philippine home loan market — Nook (Manila Bulletin, 2020)
-  Property of the Week: Pre-Selling vs RFO (De Guzman, Real Living, 2014)