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For us Filipinos, this is the most important thing to consider for investing a property means a lot of money is involved. Here are things to consider allocating your Budget:
Equity or Downpayment
You should have enough savings to cover your equity on the property. Nowadays, most developers offer monthly installments which makes buying your home easier. Your Monthly Income should cover the Monthly Installments which leaves your Savings in tact and can be used in the next item.
Transaction Expenses such as Title Transfer and Payment of Taxes
Allocate at least 10% of the Selling Price of the Property for these expenses, just an estimate of course. If you’re purchasing a resale property, you can negotiate this with the owner of who will shoulder the expenses. But If you’re purchasing a property from a Developer, you can always ask for the computation right away.
If you’re planning to apply a home loan, the Bank Fees or the Mortgage Expenses are approximately 3% of the loan amount.
Insurance such as Fire Insurance (for the property) and Mortgage Redemption Insurance (for the Borrower) are required if you apply for a Home Loan. These are paid annually until loan maturity. This is optional for buyers who paid in full. You treat it as a security for unforeseen circumstances, but hey, that’s what insurances are for?
Your monthly amortization should not be more than 30% of your family gross monthly income.
Move-In Expenses such as Furniture and Fixtures
This is one the things investing in real estate can be fun. Make sure to think of the right things to be included in your home.
Search for different contractors or architects that would make the best offer.