In any major financial decision, timing is important. Applying for a housing loan is a prime example. While it’s best to buy a house and lot when you’re ready, it pays to gain a foothold in the property market sooner than later. Here are three practical reasons why:
Age Is a Factor
Any Lancaster New City review would say that age eligibility is a big deal to housing loan providers. Generally, lenders don’t approve the loan application when the buyer will be over 60 years old when the mortgage matures. This is because 60 is the retirement age in the country, and the income of most Filipino workers head south at this time.
To reduce the risk of default, lenders are usually less inclined to loan hundreds of thousands of pesos to older applicants. This can be true even if you have a good credit history.
Applying Too Late Might Increase Monthly Amortization
One way to beat the age eligibility issue is shortening the loan’s term. If you’re in your mid-30s, 20 years is perhaps the longest term you might qualify for. The shorter your loan, though, the higher your monthly payment would become.
Unless you could shoulder 30% of the property’s selling price easily, your purchase power might limit you to less costly properties to keep your monthly amortization affordable and manageable.
Real Estate Market Is Booming
Even if you don’t see your property as a form of investment, buying a house automatically makes you a real estate investor. After all, your property can be a vehicle to build your wealth passively through its equity.
Apart from Metro Manila, the property prices in neighboring provinces, especially those in CALABARZON, continue to rise. The demand for single-detached houses is expected to remain high with the growing economy and rapid urbanization.
The Bangko Sentral ng Pilipinas (BSP) said it sees no signs of a real estate bubble, which means house values are less likely to drop suddenly and drastically in the near future. If you buy a property in the right location, it would most likely be worth a lot more 10 or 20 years down the road.
Although there are fewer incentives in buying a property at an older age, there are far greater risks if you purchase prematurely. If you’re not financially ready, it’s better to wait for the right time even if you feel you’re missing out.