Myths of owning a home, don’t buy into them! When thinking about getting a home loan, you will receive oodles of advice from friends and family. In order to weed out the ridiculous from the reality, here are some debunked tales that you don’t have to worry about when weighing up whether its time to own.
Myth #1 – You are throwing away your money in the first five years of ownership
No, no you are not. Sure, the first five years of paying off a mortgage is mostly on the interest, but a percentage of that is going directly to the value of the home. With every single monthly payment, that percentage will increase. Even though a majority of your monthly payments will go on the bank’s incurring interest, it is not all of it and you are slowly but surely paying off your home.
Myth #2 – “I cannot handle paying off a home loan because I am single”
First of all, you do not have to live in a two-salary household to get a loan. When you are able to pay the deposit and you have good credit, there is every reason to hope that your bank will grant you a loan, even on a single salary income. Secondly, if you have ever had a credit card or any type of loan, paying off a home loan is not much different. The team at Bank of Heritage Isle will be able to talk specifically about your needs and requirements.
Myth #3 – Debt is bad and wrong
Time and time again we are told by our parents not to get into debt. However, it is very difficult, especially for millennials, to avoid it. Getting an education, car expenses and general living costs, often sway people to borrowing money. But there is a difference between “bad debt” and “good debt”.
According to Ample Property Solutions Simplified, “bad debt” is borrowing money for an asset that will not appreciate. For example, a car will depreciate in value for every year of ownership and it is unlikely you will ever sell it for a profit. “Good debt” is borrowing for an investment that will one day make a profit – like a house.
Debunking some of the myths associated with home ownership will allow you to ask the right questions when talking to your bank about a loan. For any loan or ownership questions, ask the friendly team at Bank of Heritage Isle.