Some developers, in collaboration with the bank, deliberately provide credit/debt services to buy a house. But is it recommended? And will choosing this credit/debt not cause problems in the future?
To find out, it’s a good idea to read this article to the end. Because here, we will discuss the pluses and minuses of providing credit/debt in purchasing this house. Therefore, let’s see more information in the discussion below about debt consolidation.
Is It Necessary To Take Credit/Debt To Buy A House?
As is known, the house is one of the basic needs that must be met, in addition to the need for food and clothing. It’s just that, because the price continues to soar every year, it is not uncommon, there are still many individuals who put aside the desire to have a dream home.
But on the other hand, the large number of credits/debts for buying houses offered by developers and banks, which seem even more tempting. Especially for people who don’t have enough money to buy a house in cash.
If so, is it necessary to take the credit/debt? Given that by using the credit/debt, the price of the house paid for, of course, will not be the same as the price of the house if you pay it in cash? In a sense, the price of the house becomes more expensive, compared to when buying it in cash.
But what if it turns out that you can’t pay the credit/debt installments every month? It’s only natural that you have questions related to this.
Considering purchasing credit/debt, it certainly won’t be the same as buying a house in cash. Where house prices are becoming too expensive, the risk of paying installments each month is too high.
However, it all depends on your own choice. If indeed you feel able to save money to buy a house. So of course, you don’t need to choose credit/debt to buy the house.
It’s different if it turns out, you are a typical person who is very difficult to save, or you are used to saving, but the income received is still far less than the expenses that must be paid every month. So choosing credit/debt can be an option.
Get to know the Plus-Minus of Credit/Debt in Buying House!
Even though you finally choose to buy a house on credit/debt. But still, you need to know about the pluses and minuses of this credit/debt system. Whereby buying a house with this credit/debt system, usually has several advantages (pluses) and disadvantages (minus). Among them:
In general, buying a house on credit/debt, you will get several advantages. Where these advantages are directly an advantage (plus) of the credit/debt system in buying this house. Some of these advantages include:
- You don’t need to save first to buy a house.
- You can immediately own a house, even if only by paying a down payment. In a sense, the remaining payments can be made in installments and stages. So it will be much lighter when compared to buying a house in cash.
- You can immediately occupy the house, as soon as you pay the down payment. You can even rent it out, to cover the installments you have to pay every month.
- When you choose credit/debt, buy a house with a larger down payment. So this means that the installment payment term will be shorter, and the number of installments will be smaller.
Although it offers many advantages, you need to know that buying a house with credit/debt has many drawbacks. Among them:
- Each developer and bank targets different interest rates, which you must pay together with the installments.
- The longer the selected payment term (tenor), the greater the amount of interest you will have to pay.
- Although it is fairly easy, sometimes, to use credit/debt to buy this house, there are several requirements that you must meet first. Meanwhile, the bank that provides the credit/debt will not necessarily provide the credit/debt easily, without going through a complicated and lengthy process first.
- If you can’t pay the installments. In a sense, if the credit/debt is stagnant, and experiencing congestion. Then you have to accept if in the end the house you bought on credit/debt was confiscated by the bank.
That’s the plus and minus of using home buying debt you need to know. For that, before you decide to buy a house on credit/debt, first identify some of the pluses and minuses of credit/debt as described above and use a Debt Consolidation Calculator so that you can work out how to pay off your debt faster and take into account some of the risks that may occur later. You can learn more about this topic here.
- About the Author
Alex Grigoryan is a Professional Home Improvement and Lifestyle Writer. He has been in the industry for over 6 years and has been writing for Chique Home Living since 2019. His work has been featured in prestigious blogs such as Spruce Home, Better Homes & Garden, and more.