Ready to move out of your parents' house into your own home?By Mike Aquino for Yahoo! Southeast Asia
Mig Raymundo had finally had it—after two years of marriage, he was still living in his parents’ house, and staying in his old bedroom with his wife. “Jen and I were talking about having kids, and staying in the old house would be too cramped,” remembers Mig. “I know my mom would love to have us plus a grandkid around, but the reality is my parents’ townhouse isn’t big enough for two families.”
Mig and his wife considered their options: renting an apartment was always something they could do, but Mig decided to shoot high. What if they owned their own place? What if they could get in on the early stages of a condo development, one with all the bells and whistles?
But that meant a lot of questions needed to be answered, and a lot of legwork needed to be done. Could they afford to buy a comfortable condo unit with their budget? Would they qualify for a loan? Would they be able to handle the hit their monthly income would take from the monthly amortizations?
Budget: if there was one thing Mig and Jen were good at, it was at saving up. Both were working at white-collar jobs that allowed them to put in a few thousand pesos a month into a nest egg—and living at home with the parents did help them save on costs. “One thing I’ll miss: not paying for our weekly groceries!” jokes Mig.
Their nest egg was not enough to buy a unit outright, but a significant portion of it could go into paying a down payment on the unit they’d found: a condo development that met all their requirements. “We wanted a unit close to schools,” Mig remembers. “And it was reasonably close to work. There was a two bedroom unit with a view of the swimming pool we wanted for ourselves.”
Getting a loan: Fortunately, the development was accredited by the bank where Mig and his wife had set up their joint account years ago. So they simply approached their home branch to inquire about financing. The Bank of the Philippine Islands had to pre-qualify them before they put down any money for the deposit: luckily, their financial capacity stood up to scrutiny.
Banks look closely at a potential lender’s history and capacity for paying loans; luckily, Mig and Jen were both responsible borrowers who consistently paid off their BPI Credit Card on time. And the targeted amortization only amounted to 20 percent of Mig and Jen’s household income: “we were advised that our total debt shouldn’t go beyond 35 percent of our gross monthly income,” explains Mig.
“Buying into a BPI-accredited project also meant there was less legwork to do,” Mig remembers. “BPI just coordinated with the developer on the documentation.”
In the end, Mig decided to go with a 20 percent down payment, with 15 years to pay; the couple bit the bullet on getting fixed rates for the whole 15 years, which meant paying higher interest at the start. “We’re safe from fluctuating interest rates, though, so it’s worth it,” asserts Mig.
Half a year on, Mig and Jen have done most of the settling in, although their condo is still rather sparse. “We’ve been lucky to get some furniture as gifts from both my parents and Jen’s, and we raid the home store about once every few weeks,” Mig proudly tells us. “We’re hoping the next item we buy is a baby bassinet.”
