Getting a house is almost synonymous with acquiring home loan. It looks like buying your dream house means that you need to be approved for a home loan first. It is unlikely that you you’ll achieve your home ownership goal without a home loan not unless you are a well-known multi-millionaire who will only buy a cheap house (which is impossible). So even if you are not used to having a loan, a house loan is a necessary evil.
The title is quite irrelevant because even if house loan is not worth it, you still need it. But for the sake of clarification, here are the drawbacks of acquiring Hawaii luxury real estate:
If $500,000 home loan for you is already costly, wait until you compute how much you will pay for the interest. For that amount, your home loan due for 30 years with 5.50% annual term interest, you will be paying a total of $ 1,022,020.20. This means that you will paying as much as the worth of what you owe the bank. If this concerns you, there are options to minimize the cost. The most effective way to reduce the cost is to find a home loan that offers unlimited extra repayment, which will enable you to cut off years and thousands of dollars off the cost of your home loan.
They’re a big commitment:
It’s a huge commitment: When you get a home loan, it seems forever to repay it. This means that for the next 25-30 years of your life, you will think about it every month. Things can also get complicated when your situation calls you to move to other locations and leave your current house which is still under the loan agreement. For this reason, it is advisable that you look into home loans that offer portability.
Well, any form of investment involves risk and home ownership is no difference. Circumstances might happen that will make it difficult for you to pay your loan. Unforeseen events like illness, unemployment, or divorce can cripple your financial sources which will make it harder for you to pay your loan obligation. However, many lending companies are sympathetic to events like these and they develop programs that can help the borrowers get back on track. Discuss with your lender the possible options that you can take when financial difficulties come your way.