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Buyer's Guide
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Purchasing a Home
Congratulations. You've thought about purchasing a home, and you're ready to join the tens of millions of other Filipinos who have bought their own homes and are enjoying the benefits of home ownership. Like any new venture, you are probably a little bit nervous as you start to research buying a home, so this website is designed to give you some general ideas on how to go about the process, and to make you a more knowledgeable buyer. What follows should give you enough information so that with your Realtor and lender you can make informed decisions about buying your home. The result will be perhaps the most rewarding thing you can do - owning your own home.
Things to Consider When You Purchase a Home
There are basically three main things to consider when purchasing a home: Selecting the home that is right for you, financing the home purchase, choosing a Realtor and making the offer.
1. Selecting the Right Home
Of all the issues involved in purchasing a home, this is probably the most subjective. Ask yourself, what type of home satisfies your needs? Is it a single family, detached home with a backyard, or a condominium? Do you want your home on one story or multiple stories? Is it close to schools, shopping and work?
2. Financing the Home Purchase
Perhaps the most important consideration when buying a home is how to finance the purchase. Buying a home can involve the commitment of a significant amount of your savings. Questions such as how much can I borrow and how much can I afford to pay on a monthly basis are very important as the decisions that are made here can significantly impact your financial situation for years to come.
Let's start by addressing the issue of the down payment. Lenders have many loans available for home purchases, There is no hard and fast rule on how much to commit to a down payment, but try and anticipate your cash needs as best as you can before determining how much to commit to a down payment. Generally, the less of a down payment you have, the greater the loan you are going to need to close the purchase. The greater the loan you need means your monthly payment will be greater, which means the income you need to qualify for the loan will need to be greater too.
The next important issue is the loan itself. What follows is a very brief discussion of a highly complex subject. The number and types of loans available for home purchase are about as numerous as the number of lenders making loans, so this discussion is designed to give you only a broad brushstroke view of the lending market. Lenders generally make two types of loans available for home purchases, a Variable Interest Rate Loan (sometimes known as an Adjustable Rate Mortgage) and a fixed rate loan.
3. Selecting a Realtor and Making the Offer
Your Realtor is trained in the process of making the home buying process easier for you. They can offer help in locating properties that are available for sale, give recommendations on financing, help you to understand the local real estate market, and help advise you in preparing an offer and negotiate the sale. Negotiating a purchase can be very complex, as often it takes multiple offers and counteroffers before a contract is finalized. Realtors can make sure that the offer you make is in line with the value of homes in the area you are trying to buy into. They are also experts on what disclosures are required in a sale, and what inspections need to be done. A good Realtor will be with you every step of the way, from escrow opening until you finally close your home purchase. You should view your Realtor as an expert who is there to help you in each step of the transaction.
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