Buying a house, as a major moment in everyone's life, is often heart-wrenching. How different is there between paying off in full and taking a 20-year mortgage into two very different ways to buy a home?Thankfully, I learned the answer to this question early.
Full payment, as the name suggests, is a lump sum payment for the entire purchase. The biggest advantage of this method is that it is worry-free, you don't have to bear the pressure of long-term debt, and you have nothing to do with real estate. When all the purchase costs are paid in one lump sum, we can enjoy our new home with peace of mind, free from the hassle of mortgage procedures and monthly repayments. In addition, paying in full allows us to take advantage of market fluctuations to earn the difference, making it easy for us to grow our assets once the price is price**. This is a win-win-win for those who buy a home as an investment. Full payment is not suitable for all home buyers. After all, in today's high-priced housing environment, paying for a one-time home purchase can still be a bit difficult for most people with a stressful life. This leads to the common way of buying a house with a 20-year mortgage.
A 20-year mortgage, as the name suggests, is to pay off the purchase price over 20 years. The biggest advantage of the mortgage method is that it reduces the financial pressure compared to paying in full, so that many people who cannot afford to buy a house in full can also own their own home. In addition, choosing to repay a mortgage has the benefit of building a good credit history with the bank. Long-term repayment on time is conducive to improving one's credit rating, which can lead to more financial support in the future. There are also certain drawbacks to a 20-year mortgage. First, the 20-year repayment cycle means we have to bear a heavy interest burden. Although the loan amount is relatively low, the longer it takes to settle the interest, the more interest will accumulate. Even if we can afford to make monthly payments in the current situation, this long-term debt stress will continue to drain our energy and savings. Moreover, during the mortgage repayment period, even if we have moved in, our interest in the house is not complete, and we do not really own the property until the last instalment. It also adds uncertainty and inadmissibility to our lives.
To sum up, there are pros and cons to the two ways of buying a house, full payment and a 20-year mortgage, and the choice of which option needs to be decided according to the specific situation of the individual. If the economic conditions allow, paying in full is undoubtedly the first choice, which can avoid the pressure of long-term liabilities and enjoy the opportunity of asset appreciation. However, for some people who are relatively tight on finance, a 20-year mortgage is also a good option to spread the stress of buying a home and gradually build a good credit history. Needless to say, it's crucial to understand and grasp the differences between the various ways to buy a home in advance for the huge decision to buy a home. Luckily, I had this information well in advance of my purchase, which allowed me to make my choice more calmly.
It's not enough to know this, because many decisions in life are cumulative over time, and we need to keep an eye on social and economic changes in order to make the right choices at the best time. After all, different ways of buying a house will have different impacts on the economic development of individuals and families, and this is related to the quality of our entire life and the direction of future development. Isn't life a journey of growth?We need to be vigilant at all times, absorb and accumulate knowledge, and constantly adjust and optimize our plans and decisions. As the example of buying a house shows, it's good that we know this information in advance, otherwise we would have regretted it. However, it is this unknown risk and suspense that makes our lives more colorful, isn't it?Let's search for the answers to life together!