Buying a house in the Philippines, when is the right time?

OFW buying a house in the Philippines, what are the things to consider.

In our country, having your own house is very important. People see it as the sign of an individual’s success in life

This is everyone’s dream, most especially for those who grew up living in a share or rented house.

Many of OFW’s top reasons for choosing to work abroad is to reach their dream of owning a house. That dream serves as their motivation to push themselves on working hard to fulfill and reach that goal.

There is nothing wrong with pursuing this goal, but I’ve noticed that many OFW tend to forget one thing before working out on this long term plan.

There is nothing wrong with pursuing this goal, but I’ve noticed that many OFW tend to forget one important thing before venturing into the long and expensive expenses of owning a house.

Maybe you know what I am saying about, this is creating first their personal savings and emergency fund.

I am writing this blog not to discuss the correct or ideal way of planning your finances or investment, I am not an expert on that. Instead, I just want you and many OFW to re-evaluate their plans before you regret your decision, especially at this hard stage.COVID Pandemic awaken everyone unexpectedly in many factors, and one of the most is the importance of being financially ready.

It is alarming that many OFW admits they did the wrong decision in rushing in getting a house loan in the Philippines. I personally know some of them.

Just to clarify, their intention from the start is inspiring and commendable as they want to ensure that their hard-earned money will not be wasted and will go in a good investment.

However, since they didn’t give the importance of building the emergency funds, they had a hard time financially when COVID Pandemic affects their work industry.

Buying a house in the Philippines when is the right time?

OFW from Abu Dhabi

A hotelier acquires a house and lot loan which is payable for 15 years. So far, her family is already living in that residence for a few years. But she still has around 7 years to finish that loan.

Because of COVID Pandemic, she is now problematic on how to continue paying her house loan. She is not receiving her full salary and only getting a small percentage of it, she doesn’t know where and how to get enough funds to pay her monthly dues. For the past months, she is also on a no-work-no-pay basis.

Her regrets;
” I hope I had put aside an amount of 6-12 months buffer of my monthly expenses for the house loan, incase I will lose my job I have the cash to cover up the bill.

So far, she is struggling in a hard cycle of borrowing money from friends to pay her monthly dues, and paying the debt by debt. Though she knows that this cycle is hard, she doesn’t have any choice but to do it to keep her house. She is working so hard to balance her monthly expenses but unsure when it will be fine.

OFW from Dubai

Our Kabayan that work in the Travel Industry. She is positive that she can fulfill owning her dream house, she even calculates the monthly cost of the house loan and looks everything will turn smoothly till she finish the 5 years plan.

And that what she thought. Who will ever think that the vibrant industry of tourism will also be affected by this pandemic? In a snap, she receives a memo that their company will close temporarily for 3-6 months. The only better option she has is the no-work-no pay basis with a housing allowance. Though it looks so unfair to her, she accepted it with closed eyes.

She has savings on her accounts that can survive her for 6 months buying only the essentials. More than that, she doesn’t have any extra cash to continue paying for her dream house.

The sad ending, she gave up the 7 months total value that she already paid for the house. The real estate company was understanding during the 3 months delay of payment. After that, they were strict and high lighting her the agreement. As per the contract, no refund or adjustment will be accepted in the case of 3 consecutive months of non-payment.

Though it is hard and painful for her, she just let go of her dream house. She is praying and hoping that it is not late for her to start again, in this hard time in a wise way.

 

The above short experiences are just a few of the persons I know personally suffer financially because of this pandemic.

Their advice to fellow OFW before planning of buying a house in the Philippines or investing in a long term plan are;

• Think thousand or million times if they are ready for this long term financial plan
• Analyze if taking a house loan from a housing plan is the most practical one and base on their income
• Calculate their monthly expenses. Are they still capable of paying a house loan in case they lose their main source of income?
• Build first the savings, and the emergency funds before doing any investment.
• Don’t let other ideas about success give pressure on you. In the end, you are the only responsible for your decision
• And lastly do not forget the lessons that COVID19 Pandemic taught us. Without any cash savings on hand life will be difficult to handle.

Be wise all OFW and never waste your chance to save, save, and save.

60 YRS old OFW not yet ready for retirement

 

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