In my previous posts, I talked about the realities of owning a condominium unit in the Philippines, and the things that you may need to consider before buying one.
In this article, I will focus only on the fees. Yes, the many fees that you will be paying before and during your move-in, up until you start occupying the unit. It is good to have knowledge about these fees so that you could prepare and won’t get surprised or overwhelmed later on.
1. First on the list is the reservation fee.
So you’ve already decided on which property to purchase, and your agent is now regularly contacting and updating you. To seal the deal, you will be asked to pay the reservation fee.The reservation fee ranges from P15,000 to P20,000 (more or less). Just consider this as a processing fee for everyone who will be working on your papers, including your agent. For them, this is also an assurance that you are a serious buyer, and that they are not wasting their time preparing the paperworks for you.
The downpayment is not refundable after a certain period, but is often deductible from the total price depending on the policy of the developer. You would often see this in the sample computation that agents are giving out. Make sure to ask for the receipt upon paying the reservation fee.
Your contract will come during this phase. It will be notarized as soon as you sign the paperwork, and you will be given soft and original hard copies.
2. The downpayment.
A downpayment could go from as low as 5% up to 50% of the total unit price. You can talk this out with your agent as most developers are now offering terms which are very flexible, often meeting halfway with the client. The downpayment can also be paid via installment. This would be a practical option especially for a pre-selling property.
In my case, I opted for the 10% downpayment and 90% home loan. The 10% downpayment was payable for twelve (12) months, but can be paid in full at anytime within those 12 months.
3. After the downpayment, comes the hardest part – applying for a home loan.
Needless to say, this is not applicable if you are buying your unit in cash but for the majority of us, our options are:
– Home Loan or Housing Loan thru a Bank
– In-house Financing
I’ve discussed these separately in this post:
I say, this is the biggest payment that you will be making, so it is very important to determine beforehand if you are illegible for a bank loan or a Pag-IBIG housing loan. It would help to begin making those inquiries from banks and Pag-IBIG before you even start paying the downpayment. I have shared my harrowing experience in getting a bank’s approval of my home loan in the below post, and it is something that I do not wish anyone to experience:
4. Bank fees
Okay, your home loan application has been approved, congratulations! You will be signing tons of documents in the bank, and in order for your papers to get moving, you will be paying more fees!
Basically, you can consider this as another processing fee similar to the reservation fee above, but plus applicable tax and more. This is to be paid in full, and comes with a 3-5 days deadline. I paid around P70,000 in bank fees for my home loan back in 2016.
5. Time to move-in! You are not done paying yet. Prepare around P50,000 for the following:
– move-in fee, which is equivalent to one to three months of your monthly association dues. Note that this is not an advance payment; you will still start paying condo dues in your first month.
– other requirements such as fire extinguisher, grease trap and range hood installations.
– construction bond if you decide to have interior renovations. I haven’t done this yet so I couldn’t confirm if the construction bond is refundable in full.
6. On with the monthly bills:
Electric and water bills, plus the monthly condominium association dues. More about condo dues in this post:
Well, in addition to your monthly amortization, you will be paying for these three for as long as you own the unit. Say your monthly amortization is P15,000, add another P3,000 to P5,000 for these bills. You will be needing around P18,000 to P20,000 every month for your condo unit alone.
Why am I sharing all these?
The “for as low as P10K monthly” lines in bold letters that you see on those flyers are very enticing. I have some friends who paid for reservation fees because they were attracted to the supposedly low monthly payment. Unfortunately, they would later on learn about all these other fees and realize that they do not have the capacity to pay for them yet. Note that the reservation fee is often not refundable, so avoid giving away P15,000 or P20,000 for nothing.
It is important to research and be aware about the actual amount that you will be needing before, during and after buying a condo. I am lucky to have a very supportive family that together, we somehow became financially capable for this endeavor. It is one of the best decisions that I ever made, and I’m glad that I went for it.