Unless and until you buy a home of your own you have to pay a regular rent for your accommodation. While it is important to save at least deposit money in order to take a home loan, it is almost impossible to save anything when you are already paying rent amounts on monthly basis. The sooner you get out of the rent- trap the better it would be.
Year by year you keep on spending on rent, which is actually damning your money as such payments are creating a hindrance for you in saving for the deposit value. The amount you pay monthly on your rent creates nothing for you but if you pay almost same amount in making loan repayments it creates an asset for you.
When you have a home of your own you can live in it and it will also get appreciated in value as time passes. Still it is difficult to manage for the repayments in short term. As time passes repayments become less burden with rise in equity and the dollar value reduction.
In Australia people find it extremely difficult to afford to buy a home. Impact of inflation and rising fuel prices has hit the people's capacity to save and to make repayments. As a result in Australia housing affordability has dropped to absurd levels.
At the same time more people than ever are living beyond their means and banks are trying hard to lend them attractively irrespective of the fact if people can afford it or not. All debts are climbing up, such as credit cards, personal loans, housing loans.
It all makes for a tough decision for anyone taking a new house mortgage these days.It is definitely a case of damned if you do and damned if you do not take a home loan.It may give you some short term pain for long term gain.
by Max
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