Do you want to own your own home, but feel nervous about getting a mortgage? If you get a mortgage, will you be concerned about paying it off as quickly as possible? When a person is in this situation, they may think of the large amount of debt they will have and begin to feel anxiety over it. However, getting or having a mortgage is not as scary as you might think. There are actually several benefits that can come from a mortgage and these will be discussed below.
To begin with, buying a home is usually considered good personal debt. You are putting money into something that you will eventually own and that will hopefully gain value over time. If you are concerned about the interest that you will pay, the best thing that you can do is put a large down payment on the home. Traditionally, a person will usually pay 20%. However, the more that you put down on the home, the less money you will owe to the mortgage lender and the less interest you will pay over the time of the mortgage need to be paid back.
Getting a mortgage, instead of putting all of your cash reserves into a house, will allow you to use that money on a high return investment. This may end up being better for you financially. You will have to look very carefully at the various investments that are available and decide if they are worth the risk. You can use the various financial products and tools that are available at Clydesdale Bank (http://www.cbonline.co.uk/personal/mortgages/) to help with this.
When you have a low interest mortgage, you have the benefit of putting money into a house that will eventually be yours, but you have the ability to use some of your savings money or monthly income towards something that would be more beneficial. For example, if you have credit card debt, it is likely that the annual percentage rate is quite high. You can pay this off over a shorter period of time and benefit yourself financially. Also, you can put more money into a 401K. This is definitely going to bring you benefits later on in life. You may also be in a situation where your employer will match your 401K contributions. It would be a lot more beneficial to you financially to put money into this, instead of into a mortgage.
About the author:
Fiona Harris contributes to many blogs including Financial Newsgroup, where she enjoys helping people save money and keeping abreast of the latest financial developments. You can read more of Fiona’s work at Financial News Group.