Loans for First-Time Homebuyers: How to Finance

Published Date : February 23, 2022 Article Buying house Buying Property Buying Tips Community Guide Financing Housing tips Industry News Investment Tips Property Recommendations Real Estate 101

For first-time homebuyers, the financing process may seem daunting. However, the procedure doesn’t have to be complicated or stressful with knowledge and guidance. Getting a loan for your first home purchase could be easier than you think.

Many different types of home loans are available to first-time homebuyers, making the process seem overwhelming. But before getting into the types of loans available, it is vital to understand how to finance. Below are some tips to help you know about first-time home buyer loans:

Acquire a Mortgage Pre-approval

Banks offer a pre-approval examination to assess your creditworthiness; the results determine how much you can borrow from them and your likelihood of repaying the loaned amount. Your annual gross income and other credit information, such as credit cards from different banks and existing loans, are among the questions. Once approved, it’s time to start looking for a house to buy

Bank Loan Fees

Banks typically provide the quickest loan transactions, but this convenience comes at a cost. They charge for additional services such as handling fees. Banks include mortgage redemption insurance (MRI) and fire insurance in their loan packages for added security.

Consider government home financing through the Pag-IBIG Fund or the National Housing Authority if you want to avoid paying bank loan fees for buying your home.

Prepare a Down Payment

On average, most local banks require a 20% down payment on a house and a 10% to 30% down payment on a condominium unit. If you want to reduce your total mortgage balance and monthly amortization, it’s best to make large initial payments.

Other counting houses provide flexible payment options that allow you to pay on your terms. You can pay more when you have extra money and pay less when your budget is tight, without incurring additional fees!

You should also budget for property taxes, housing insurance, closing and moving costs, and other notary stamp requirements, which will add to the home’s total cost.


Types of Housing Loans in the Philippines

There are two types of housing loans in the Philippines: conventional and flexible. You can select either of these two depending on the terms you prefer.

  1. Conventional

A conventional mortgage requires you to make fixed payments over a set period. This is ideal if you want a predictable payment scheme and plan your finances ahead of time. A conventional mortgage, also known as a conventional loan, is any type of home buyer’s loan that is not offered or guaranteed by a government entity. Conventional mortgages, on the other hand, are available from private lenders such as banks, credit unions, and mortgage companies.

  1. Flexible

Flexible banks typically offer this type of home loan. Depending on how much you deposit, you can control the interest rate of your flexible home loan. You may also begin principal repayment at any time. You must only pay interest on the amount borrowed, not the loan amount sanctioned. You can also reduce your interest rate by making part-payments when you have the money. As a result, Flexible loans end up saving money.



Housing Loan Options Based on Financing Scheme

  1. Bank funding

Housing loans are available from the majority of the country’s banks. However, the application process can be rigorous, with loan amounts and terms varying from bank to bank.

  1. Pag-IBIG home loan

This government agency can provide you with a housing loan if you are a Pag-IBIG member. This is open to salaried, self-employed, and OFW workers aged 65. It also allows you to borrow up to PHP 6 million to purchase a residential lot, house, or condominium.

  1. In-house financing

Real estate developers can provide you with a housing loan. However, this loan option has a shorter term of up to five years.


Adulting can be frightening for some because you are now more concerned with your future and investing in the right pieces, properties, and types of investments to achieve your life’s dreams and goals. Some begin by purchasing a car, some buy a home as an investment, and others start by managing their finances and bills. But, whatever it is, make a checklist ahead of time, so you aren’t surprised by your financial problems in the future. And keep in mind that you have a bank on which to fall back if you decide to take a giant leap in life.

Although it is challenging to secure financing as a first-time homebuyer, you can apply for a loan with some help from your real estate agent.


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Home Buying Guide: Steps & Tips for First-time Home Buyers

Published Date : Article Buying house Buying Property Buying Tips Community Guide Housing tips Investment Tips Property Recommendations Real Estate 101

Buying a house is a substantial step in anyone’s life, and it can be an even bigger process than you expect. It’s not just about the house itself; it’s about the neighborhood, schools, access to public transit, and more. There are a lot of intelligent decisions to make, but with some research and planning, buying your first home can be rewarding. This guide will be helpful to those who are new to the home buying process; regard these steps for finding your first home.

Considerations Before Making a Purchase

Your long-term objectives should be your guiding force in deciding whether to become a homeowner. Some people view homeownership as converting all their rent payments into mortgage payments, leading to the ownership of something tangible and valued. Other people view homeownership as a symbol of independence, and they relish the prospect of being their landlord. Then there’s the angle of viewing homeownership as an investment.

House Type Best Suited to Your Requirements

Several types of residential property are available for purchase, including single-family homes, duplexes, townhouses, condos, and residential buildings with between two and four units. Depending on your homeownership goals, each option has advantages and drawbacks, so you must decide which type of property will help you achieve those goals. 

Convenient Location and Daily Commuting

Access to transportation is one of the most important factors to consider. A property buyer should consider the time it takes to get to work or school. It is advised that buyers ensure that a location is surrounded by commercial establishments, emphasizing that these are the things that will add value to one’s property, especially when selling or renting it out. It is critical to have excellent amenities such as shopping malls, grocery stores, gyms, and hospitals.

But you can consider buying a house far from civilization if you want to get out of the chaotic world and require peace.

Examine Your Financing Options 

Keeping your finances in order will be in your best interest. In general, you must have a good credit history of paying your bills on time. Lenders nowadays prefer to limit housing expenses to approximately 28 percent of the borrowers’ monthly gross income. However, this figure may vary based on the local real estate market.

Once you’ve decided on a lender and submitted an application, the lender will verify all of the financial information you’ve provided (checking credit scores, verifying employment information, calculating -income ratios, etc.). The lender may pre-approve the borrower for a specific amount.

Get a Home Inspection

A trained professional’s inspection for quality, safety, and overall condition are essential, even if the house you want to buy seems perfect. If the home inspection reveals serious flaws that the seller failed to disclose, you should be able to withdraw your offer and receive your deposit back. If you find yourself in this situation, you could try negotiating with the seller to repair or reduce the selling price.

Make a Proposal

Depending on how much you want to pay for the house, as well as any conditions you wish to impose, such as having the buyer pay for the closing costs, your agent can help you determine how much you want to offer. Next, your agent will present your offer to the seller’s agent, who will accept or counter your offer. You can then take or continue to negotiate until you reach an agreement or decide to call it quits.

Examine your budget again before submitting your offer. This includes estimated closing costs, commuting costs, and any immediate repairs or mandatory appliances you may require.

This outline should get you started on the right track toward filling any gaps in your homebuying knowledge. Remember that the more you know about the process ahead of time, the easier it will be for you to get the house you want at a price you can afford.

Buying a home is a tricky process, but there are plenty of resources out there to help you get through it. These are some valuable tips for buying your first house. If you’re ready to put these tips into action, reach out to the best real estate platforms in the market to get started today!

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