According to Bank of America’s 2018 fall report, 72% of young adults surveyed prioritize owning a home over getting married or having children. This is mainly because they equate personal success with home ownership, as this decision to invest in a home makes them feel mature and responsible. Additionally, young adults look into buying their own home for the sense of freedom and independence that it entails. For these reasons, more and more millennials are looking into buying their own homes – but they may not have sufficient finances to do so. This is where mortgaging comes in.
Here’s how a mortgage can benefit young adults.
Owning a Home at a Young Age Signifies Your Stability.
“Buying a new home or deciding to refinance your property is a big financial step,” residential mortgage experts from Guilford say. Mortgages and loans are big financial commitments that are to be treated with the utmost responsibility. Backed by a good credit score and stable income, you have a higher chance of qualifying for a loan. If you’re responsible enough and on track with your current bills and payments, the better your credentials will be. Financial stability prompts banks and loan officers to trust you with a loan, so make sure to be on top of your bills and payments.
This is also applicable in the long run. When you’re done paying for everything and have retired, your credit history and bank records will reflect how you kept up with payments throughout your life. With the proper management of your savings, there’s no doubt that you’ll be able to invest in more properties over time.
Mortgaging Helps You Build Equity.
Getting a mortgage enables you to buy a home while slowly building equity for it. Eventually, what you’re paying for will turn into a profit while the value of the house increases over time. Whether you’re leaving the residential property to your kin or are planning on selling it someday, chances are that you will make a significant profit, making having taken out a loan well-worth it.
It Gives You Financial Freedom Over Time.
Typically, people purchase their first home upon marriage or when they have children. But many young adults now choose to make that investment before hitting those milestones (if they ever choose to) as they want to live in the house for a longer period. Mortgaging at an early age serves as a long term investment because you can relax in the residence that you’ve been paying for when retirement comes. By then, you would have finished paying off the house and can enjoy your pension and the rest of your life’s savings as you please. You may also pass on the house to your children and grandchildren and build a home for generations to come.
Buying a house, on a mortgage, at an early age has many potential benefits. If your top priorities include owning a house and being able to enjoy your retirement, mortgaging to purchase a residential property could very well be the ideal financing method for you.