Although the property market has entered the trend of adjustment, but the cost of home buyers has been high, data show that up to now, the average price of new houses in 100 cities in the country is 16,244 yuan / square meter, and the average price of second-hand housing is 15,230 yuan / square meter, which has been 20 consecutive months of month-on-month decline, and the year-on-year decline is also expanding.
This also means that it will cost at least 1-2 million yuan to buy a house in these cities, and if it is in a first-tier city like Beijing, Shanghai and Shenzhen, the cost of buying a house is even higher, and it costs six or seven hundred yuan casually.
In the face of high housing prices, ordinary families cannot afford to buy a house in full, so they can only choose to take out loans. However, there are also a few families with relatively well-off families who choose to buy a house in full at once.
So, whether to choose to buy a house "pay in a lump sum" or choose to "repay the loan for 20 years", how much is the difference between the two?
In this regard, real estate experts said that there are significant differences between the two methods in terms of financial burden, return on investment and risk. Let's take a look:
01.
Advantages and risks of a lump sum payment
1. Save interest: Buying a house in full means that after the purchase, you will no longer pay the interest on the mortgage from the bank, and you will have no pressure to repay the loan every month, and your life will be easier.
2. Financial freedom: Buying a home in full means that you are no longer burdened with a mortgage, and you can focus more on other investments or businesses later on, rather than worrying about monthly mortgage payments.
3. Simple procedures for buying a house: Compared with buying a house with a loan, the procedures for buying a house in full are simpler, and the buyer can get the house after choosing a good house and signing a purchase contract with the developer to pay.
4. Liquidity risk: Paying off a home in one lump sum requires a lot of money and can put pressure on your cash flow. If there is an issue with liquidity, you may run the risk of not being able to complete the purchase transaction.
In addition, for those who buy off-plan housing, if the developer does not deliver the house on time, or due to insufficient funds for the project, it cannot be delivered or even the project is "unfinished", then the buyer who has paid the full amount may lose more interest, or even all of it will be lost. At this time, it is obviously safer to take out a loan than to buy a house in full.
5. Opportunity cost of investment: If you choose to pay for your home in a lump sum, you may miss out on other high-return investment opportunities. For example, investing money in the stock market or other high-yield wealth management products may result in higher returns.
02.
Advantages and risks of repaying the loan for 20 years
1. Reduce cash flow pressure: Borrowing money from the bank to buy a house is to prepare a small part of the house payment as a down payment, and the bank will help you advance the rest of the money, but you need to repay it little by little later.
Therefore, the initial investment of borrowing to buy a house is small, which reduces the pressure on cash flow in the short term. You can also put more money into other investments or emergency reserves.
2. Interest expense: Long-term loans usually require a certain amount of interest to be paid, which may increase the total repayment over the life of the loan. However, inflation can also reduce the actual repayment burden over time.
3. Diversify your investments: By repaying your loan for 20 years, you can diversify your money into other areas of investment for a broader asset allocation. In this way, your wealth growth may be more diversified and sustainable.
In addition, taking out a loan to buy a house can also use the money saved in leisure for emergencies, if you face difficulties in life in the future, or need funds urgently for other reasons, then this money can be realized to make yourself more calm.
4. Later life burden: Loan to buy a house needs to bear high mortgage interest, which will lead to an increase in the burden of living during the monthly payment, once encountering an emergency, resulting in an imbalance in family income and expenditure, it is very likely to be cut off, not only affecting their own reputation, but even may face the risk of the house being repossessed.
5. Interest rate risk: Long-term loans are closely related to interest rates. If interest rates rise in the future, your monthly payments will increase and vice versa. Therefore, interest rate risk is one of the inevitable factors in repaying the loan for 20 years.
03.
Recommendation: According to individual circumstances
Make the best choice
When choosing a payment method, whether to pay in a lump sum or repay the loan for 20 years, buyers need to consider multiple factors, including financial situation, investment goals, risk tolerance, etc.
In addition, it is recommended that you refer to the following points to make the right decision:
1. If you have sufficient cash flow and a stable investment portfolio, it is advisable to pay for the house in a lump sum to save money on loan interest expenses and achieve financial freedom in advance.
2. If you want to spare some funds for yourself when buying a house, it is recommended to take a loan to buy a house, which can reduce the economic pressure in the short term and reduce the risk of capital liquidity.
3. When considering interest rate risk, you can pay attention to market interest rate trends and choose fixed or variable rate loan products. A fixed interest rate ensures stability in your monthly payments over time, while a variable interest rate may give you more flexibility.
4. Buying a house is a major investment, in addition to market trends, loan conditions, tax incentives, etc., you should also have a general plan for your life, such as when to get married and have children, when to start a business, etc., these factors may affect the need for funds.
5. Don't overlook the quality and value of the house itself. No matter which way you choose to buy a house, it is more important to choose a good house, such as a property with higher quality and better property services. Not only that, but also factor factors such as the location of the house, school district, infrastructure, and future development potential are taken into account to ensure that your property has long-term investment value.
In short, it is not advisable to buy a house blindly, whether you are buying a house with various payment methods, you must ultimately analyze it from many aspects, weigh the pros and cons according to your personal situation and then make the right choice. In this way, it will not affect the later life plan, and it will help you achieve your financial goals and achieve sustainable wealth growth.
Wan Ziwen said: Every word of the article was typed out by me, and I clicked "watching" to let me know that you are also "doing your best" for life.
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