Unfortunately, this has not been the case for many Filipinos. A cursory look at the quality of life indicators in the country would yield the rather sad conclusion that far too many young people do not end up graduating from college, the unemployment rate isn’t going down, young people are foregoing marriages, and millions of Filipinos do not have homes they could call their own. These trends may be attributed to a variety of factors – economic, social, or political.
In this week’s edition of Q&A Tuesdays, we take a specific look at the housing issue and determine whether it makes practical sense to purchase your own home or if you are better off renting.
I have been renting for close to eight years now. While part of me wants to stop renting and finally decide to buy my own house, there’s still that part of me that holds me back from doing so. Much of my hesitation stems from my fear that I may not be able to sustain my amortizations. In addition, I feel like settling in to your own home requires lifelong commitment – something that I, as a young mobile person on the lookout for opportunities anywhere, am not ready to give.
- Mischa (Bulacan)
The fears that you harbor in relation to buying your own house are natural and are not entirely unfounded. With the economy not doing so well, it may be unwise to take out a housing loan knowing fully well that you are not financially ready for it.
See, there are several advantages to renting a home. For one, it spares you the trouble of having to deal with paperwork and other minutiae of homeownership that absolutely no one wants to deal with, including arranging for the transfer of your name to the Transfer Certificate of Title, paying for real property tax, insuring the property, fixing damages, and renovating all or parts of it, among others.
Additionally, renting provides you the flexibility of choice. This means that no matter where life takes you – either in the form of new employment or transferring to a new city with your family – you are not rooted in any specific place. In other words, you can rent wherever and whenever you want, without foregoing opportunities and thinking that you have a property that keeps you anchored on one and only one place.
With home ownership, you have got to be committed to it before plunging headlong into this major life decision. Here’s why: taking out a housing loan will involve amortizations that will last years. Depending on the amount of monthly amortization, this period could last to a minimum of five years to a maximum of 30 years.
In addition to mental and emotional readiness, financial readiness must also be taken into account. This means payment of your monthly amortizations must be made religiously. Otherwise, you run the risk of defaulting and having your property foreclosed.
And as mentioned earlier, paying for a home in a specific place does not provide for the same degree of flexibility when it comes to career and other economic or personal options. If your house is located, say, in Bulacan, you are constrained to look for opportunities only within the range of Bulacan. If a great opportunity pops up somewhere else, it is clear you have to forego such.
But the beauty of home ownership is the sense of security you enjoy from having a home you can call your own. No abusive landlords to deal with, no overpriced rent, no arbitrary increase in monthly payments, and none of the hassle associated with having to hunt for an apartment.
If as you say you are a sprightly and mobile young person who’s not ready to settle down yet and commit to a major decision of purchasing your own home, then renting should be your best bet.
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Got a question yourself? Post it in the comments section below or on any of our social media channels. Watch out for the next edition of Q&A Tuesdays next week!