MORTGAGE FINANCE:
Before You Say I Do
Another fall out out of the banking consolidation is that banks are now looking the way of mere mortals when it comes to mortgage financing. Before now, they only dined with millionaires and estate developers.
In the developed wall, people buy property using their bankers money via mortgage. If you offer to pay cash, they will check you out before they accept your money.
Buying/building a house through mortgage makes a lot of sense.
Firstly, instead of paying rent to your landlord,you pay rent to your bank. In the landlord scenario, if you live there for forty years, he will not dash you one room for being a good tenant all these years. But in the case of the bank, the house is yours after 20 - 30 years. You are set free for good behavior and aske to pay no more. So in effect, as you are making monthly payments, you are increasing your share of the property until it becomes 100% yours.
Also while being a "tenant", you can do what you like with the house without asking the "landlord's" permission. You can install a swimming pool, redecorate, or turn the backyard into a vegetable patch, and you don't have to say "sir" to anybody. Technically it is your house.
Secondly, property prices historically tend to go up. If you took out a N90M mortgage to buy a N100M house, and while still paying, the house value rises to N150M, the N50M on top is all yours. The bank cannot come and say, since we contributed 90% of the money, we are entitled to 90% of the profit. That is why Rich Dad christened it "magic money". You bought a house with another person's money, sell for a profit and return the original money and keep all the profits.
Thirdly, with mortgage, you get to live in your dream house at an early age. If you save to build, depending on your salary, chances are you will be in your 40s to 50s by the time you finally get to paint, do house warming and move in. For a lot of folks, it happens after retirement. They use their gratuity to finish the house. Some never finish their dream house on this side of eternity. Some people leave it for their children to finish the project for them.
But with mortgage, you can move into your house in your twenties, keep moving up the property ladder (upgrade your accommodation by change houses upwards, bigger house, more decent neighborhoods etc).
Again with mortgage, you are not married to the house, till death do you part. If you dont like the house anymore, or the neighborhood, you simlpy sell, move and buy another one more to your taste. If your company transfers you out of town, you simply sell and relocate, with your bank more than happy to add more money, if you are moving to a bigger house, and you have paying your mortgage regularly.
Pages | 1 | 2 | 3 |
Connect With Us
 |
 |
 |
 |
