Once you get a job and start earning your own money, owning a home becomes the obvious end-goal. But buying a home is not that easy, for it is one of the biggest and most expensive financial decisions you will take in your lifetime.
Given the astronomical amounts involved, simply saving a portion of your salary every month will not cut it. For this dream to become reality, you need greater financial muscle—you will have to consider taking out a home loan.
For an average middle-class person, availing of a home loan or housing loan is an attractive path towards home ownership. A home loan gives you enough financial capital to purchase a home under your name, stretching out the payment over a period of years so that you don’t have to pay for the full cost up front.
Banks are among the most preferred partners for taking out home loans, for they offer a wide variety of financial products that cater to homebuyers of all income segments. Below are some of the advantages of taking out a home loan through banks.
A home loan makes it easier for salaried individuals and even small business owners to afford buying their home. Banks have specialized lending units and capable staff that could evaluate your home loan application based on your credit score and capability to repay the loan.
If the borrower has a regular stream of income and deemed capable to pay the required monthly installments, lenders are inclined to approve the home loan application.
Because home loans typically range from 15 to 20 years, monthly payments can be adjusted to be smaller and more affordable.
Improve your credit score
One of the benefits of a home loan is its ability to improve your credit score and credit-worthiness. When paid regularly and on time, you will earn a good record on your home loan making it easier for you to apply for and finance other purchases like car loans or loans for home improvement.
The value of real estate properties has been consistently on the rise over the years, earning its moniker as self-appreciating assets. Often, the capital appreciation of real estate property has outpaced the interest you pay on the home loan.
In the Philippines, the bank interest rate for home loans range between five to six percent annually, while appreciation of residential real estate could reach upwards of 20 to 30 percent by the end of the home loan period.
The passive capital appreciation alone helps you cover the interest rate and still gain a profit on the property, if you decide to sell.
Whenever you have cash at hand, it takes an enormous amount of willpower to resist the temptation of spending. But when you know you have a regular expense in the form of monthly installments, your brain will automatically force you to set aside a fixed amount every month.
Just think of the home loan as a mandatory savings account that you pay off regularly. Once you repay the home loan completely, the increased value of the home will make it worth the years of financial discipline.
Safety from legal issues
When availing a home loan through a bank, the lender will conduct a full background check of the credibility of the builder as well as the property itself.
All the required paperwork and due diligence will be done to make sure that the builder has complied with all the rules set by government regulators.
The lender will also make sure that the property is not involved in any legal dispute so you don’t need to do the tedious process yourself.
If the bank approves your home loan, you are assured that the property you want to purchase is safe from legal troubles.
If you’re looking for your ideal home, check out Lumina Homes, since its establishment in 2012 with a flagship project in Sto. Tomas, Batangas, Lumina Homes has been offering quality, affordable house and lot properties in a network of more than 50 key locations nationwide.
Lumina Homes’ very own amenity center, is packed with well-thought and functional amenities like a multi-purpose hall, mini gardens and playground, jogging path, and shuttle terminal; and new features like community center and “Tambayan ni Juan.”
Lumina Homes’ master-planned communities are all located near signature lifestyle brands that include Vista Mall, AllHome, Coffee Project, MEX and more.
For more information, check out Lumina Homes on Facebook at @ luminahomesofficial or visit the website lumina.com.ph.