A Pinoy Expat's Tip Before Buying a Home

When my sister-in-law's family migrated to the UK, they dreamt of a good life that they believed they can't afford to give their children then. Good life for them meant having money for retirement, work-life balance to spend time with each other, and of course having their own house to call their own. England has been good that in half a decade they got everything including a place that they now call home. 

Their newfound friends were very helpful when they made the decision to buy their home. According to their elderly neighbours, it was a good time to buy a house since the interest rates are better (below 3%) compared to when they had their home loan years before (which hovered around 17%). That's already a good deal as during that period, home loan rates in the Philippines were about 6 to 11% which they couldn't afford then. With the wheels set in motion, they decided to sort their finances to see if they can afford to buy, not just lease, a roof above their heads. 

The first thing they did was to do some research as to how much they can get from the bank. The internet provided them with some useful online calculators to estimate how much the banks would be willing to finance and repay their mortgage.
  • Payment Calculator. This calculator shows how much the actual payment are going to be based on how much the property is worth and how long it's going to take based on how much their deposit is going to be. It's best to  go over their shortlisted properties and see which ones fit the range of their allowed  loanable amount and work from there. 
  • What Mortgage Can I Afford Calculator. This calculator shows the range of how much the banks would lend at a specific current income stream and how much damage the current financial liabilities will affect the total loanable amount. Just input the current income, outstanding debts, and downpayment and they get the upper and lower limits of our possible loanable amount. 

Meanwhile, in Australia where my sister is, the state and federal government has put incentives in place to entice its residents to buy their own property through homeowners grants and other concessions. Properties in suburbs near regional areas are being developed and made more affordable to allow people to actually want to live there.There are also deals made by loan providers that allow for low or even no deposit loans with the help of a guarantor, which is usually a family member whose home equity will be used to cover the down payment so they don't pay additional Lender's Mortgage Insurance (LMI). 

Online mortgage calculators like these are reality checkpoints if their finances are in line with their objective of buying property. All you need is honesty in filling out the forms with actual amounts to make the most out of it.  From using these online mortgage calculators, users can see if their finances needed more improvement in terms of saving up for a bigger deposit or if they have to pay off some of their personal loans first before getting a dream home.