Personal Development, Business, Finance, and Investing for Everyone
An investment in knowledge always pays the best interest.
Buying a real estate property can be a good investment if you understand all the financial costs involved. Whether you’re paying in cash or installment, you’ll be shelling out money for different expenses and fees related to owning a home.
These things can cause a dent in your budget, so you must make an honest assessment of your financial capacity before making that purchase.
Here are some of the top and most pressing financial concerns to think about and plan for if you’re seriously contemplating to get a condo unit.
Your chance of getting approved for a loan to fund your condo purchase will depend on your credit rating. Simply put, your credit rating refers to your creditworthiness in the eyes of banks and other financial institutions. They review your credit history, payment behavior, and financial situation to assess whether you’ll be able to pay the loan you’re applying for.
When buying a condo, you’ll need to present bank statements, tax records, and proof of income to show that you have good credit standing. So before buying a condo, make sure that you can secure the necessary credit clearances, which is only possible if you’ve been paying your debts and dues religiously.
If your credit rating isn’t up to par with bank standards, you can also avail of in-house financing services, which are available with most condo developers. They might cost you more, but loan approval is more guaranteed since the loan will be provided by the developer, not the bank.
Source Of Income
A regular job is also a must for condo buyers. Ideally, you should have been working for at least two years at a reputable company to improve your qualifications for owning a condo. If you’re married, your spouse’s employment will also matter since your combined income will result in a higher buying power.
Alternatively, starting a business is a good way to improve your flow of income. You can do this on the side or a full-time basis. These days, it’s quite easy to build a startup and in a few years acquire your return on investment (ROI). Use your business acumen and relevant technologies to make your business venture a success.
If you have unpaid debts, you’ll have to consider them, too. Will you be able to make monthly amortization payments for your condo unit while settling your debts with other creditors? Major debts, such as those tied with a car loan or credit card accounts, are especially a serious concern since they can become liabilities if not managed properly, and cause you to use up your financial resources.
At the outset, you’ll be spending on the reservation as well as down payment fees for your condo unit. Condominium developers will let you choose whether you would like to avail deferred monthly payments or pay the required 20% down payment fee in full.
Once you’ve settled the down payment, you’re expected to make monthly payments within a span of 5 to 15 years or until you have fully paid your property.
Take time to weigh the pros and cons of the payment options available to you, making sure to choose whichever is easier on your pocket. One thing to consider in your decision is that the longer the repayment period is, the higher the interest rates that will be applied on your principal loan.
Building a savings fund early on can help you become better prepared for your investment goals, including buying a condo. As your savings grow over time, you’ll be able to use that amount either for your down payment or for your full payment. It also makes a lot of sense that you seek a housing loan with the bank where you’re maintaining your savings account, as it might make you eligible for more liberal housing loan terms as well as more reasonable interest rates.
As with any goal, becoming a condo owner requires a lot of work. That includes doing extensive research to make sure that you’re financially ready to own a property, which can soon become an asset for yourself or your family.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.