Your house is your safe space, a place where you can truly be yourself after a tiring or stressful day. A house is a home for many people because it provides shelter in both physical and emotional forms.
The journey to home ownership can take a while, but it’s well worth the wait. Securing a home loan can make things easier by lightening the financial weight that you have to carry. With Metrobank, you can loan up to 80% of a property’s selling price at low fixed interest rates for up to five years.
When buying residential property in the Philippines, it is important to take note that the actual purchase price of a home comes with other fees and taxes that are necessary to complete the transaction. Some of these transaction costs are to be shouldered by the seller, while the buyer pays for the other fees.
That being said, there are extra costs to consider when buying a house. You need to be mindful of these costs when you get the opportunity to own or build your home.
Apart from the property’s actual purchase price and other concessions between the seller and the buyer, here are the common hidden costs of buying a home:
Notary Fee. This refers to the negotiable cost that the buyer has to pay to have the Deed of Absolute Sale notarized, which usually hovers around 1-2% of the property value.
Local Transfer Tax. This refers to the tax that the buyer has to pay for transferring ownership of any real property. Depending on the home’s location or municipality, the local transfer tax can cost around 0.50% of the property value for provincial properties and 0.75% for properties within Metro Manila.
Registration Fee. This refers to the cost that the buyer has to pay to the local Registry of Deeds where the house or property stands, and it amounts to around 1% of the property’s selling price. This serves to legally register the transfer of ownership.
Moving-in Fee. This refers to the cost that the buyer has to shoulder upon moving into the property once it’s already made livable. It can include connectivity of necessary utilities, association or subdivision dues, and the like.
Documentary Stamp Tax. This refers to the tax that the seller has to pay for the documentation of the sale, which amounts to around 1.5% of the property’s selling price or fair market value, whichever is higher.
Capital Gains Tax. This refers to the tax that the seller has to pay for the transaction of real estate properties that are categorized as capital assets, such as residential properties. The CGT amounts to around 6% of the property’s gross selling price or its fair market value, whichever is higher.
Real Estate Agent’s Fee. This refers to the cost that the seller has to pay for the assistance and work that the real estate agent rendered, which amounts to around 3-5% of the property value, deemed separate from the commission.
While these costs aren’t deliberately concealed from your knowledge, the awareness that these other costs exist can help any homebuyer consider their options.
For first-time homebuyers, consulting with an experienced real estate professional can make the process smoother, especially when it comes to accomplishing the necessary paperwork.
Once you’ve located a property that you want to buy, schedule a site visit with an agent or broker to ask questions and personally inspect it. It also helps to walk around the neighborhood to get a better feel of living there.
You can then request the real estate agent to provide you with a quotation. Study the breakdown and calculate the total costs of buying a home–adding a 5% buffer, just in case. If the purchasing price is too steep for you, there are other options to consider. Clarify the different fees and costs with your agent.
The usual down payment that most developers require settles around 20% of the property’s purchase price, structured around a 24-month payment scheme. Paying a reservation fee, usually deducted from the down payment or total contract price, allows a buyer more time to evaluate their payment options. This is where a home loan can help.
Getting a home loan is not solely for the purchase of a house and lot. It can also be used to purchase a lot, construct or renovate a house, reimburse the purchase price of recently purchased property, or acquire other residential properties. With Metrobank, you can borrow up to 80% of the property’s appraised value, and you won’t have to wait long to create meaningful memories at home. Work with a trusted provider and secure a home loan for a reassuring homeownership experience.
For any questions or inquiries about home loans, feel free to contact us today, and build the home you deserve with Metrobank.