Pruelpo is Asking You: Should You Borrow Money to Buy a House
Actually there is nothing wrong in purchasing a house and lot or even a car. It only becomes wrong when you purchase without carefully examining your financial capacity to pay.
It is not bad to borrow money if you can pay. Borrowing with a well-studied plan and a payment timetable ensures that you will have a good debt. It makes money that does not belong to you work for you. Borrowing assumes that you have completely understood all the responsibilities involved and you have analyzed your competence to pay.
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Believe it or not that most income earners rush to buy homes just because they have enough money for the down payment. This general behavior appears to apply to almost all cases where people buy hard assets such as a house and lot, a car or just about any appliance they want to own. They forget the need to consider the cost of borrowing and of ownership.
I know a house is a home. All of us dream of owning a house. It is not to be taken strictly as a financial investment decision. Buying a house for you to live in is a long-term commitment. And for places where access to public transportation is difficult, it is also good to own a car. But very few can pay for it in cash. So to most, borrowing is necessary.
Buying and borrowing are two distinct decisions. You decide to buy if there is a need and it is time for you to do so. You decide to borrow if the terms are fair and economical. When you borrow, you must understand very clearly that you will be adhering yourself to a very certain and definite financial accountability which will require you to pay explicit amounts at specific dates in the future.
For that reason, it is important that you have an equally adequate, assured and ready source of funds to make these future payments. But buying when you are not yet financially ready will hurt your future financial condition. And you may believe that you have bought more liabilities. So it is important that when you borrow, understand the persuasive interest rate – the real cost of interest to you.
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Published in: Personal Finance
Comments: 24 | Post a CommentPost a Comment
FX777222999 | Sep 18, 2011 | Reply
Absolutely true. Very informative.
Nxwtypx | Sep 18, 2011 | Reply
Indeed, don’t make any jumps before you’re ready.
lapasan | Sep 18, 2011 | Reply
Most people cannot help but borrow money when they build a house because of the big money involved. It would be better to pay for anything in cash, but most often cash is difficult to come by.
mtrguanlao | Sep 18, 2011 | Reply
Agree with you kabayan,we should alaways take into consideration if we can pay our debts with our present job. It’s hard to have debts.
ittech | Sep 19, 2011 | Reply
Absolutely true.
pruelpo | Sep 19, 2011 | Reply
@FX777222999 – agree and that is the real score of borrowing. Thanks dude.
pruelpo | Sep 19, 2011 | Reply
Right dude Nxwtypx – we have first to consider the overall cost from borrowing. Noted and thanks.
pruelpo | Sep 19, 2011 | Reply
And that is absolutely true dude Lapasan – I myself had experienced it. Thanks.
pruelpo | Sep 19, 2011 | Reply
@mtrguanlao – when a person is already nailed with his debts, the next move he would do is to sell some of his hard properties such as a house and etc…Much appreciated kabayan.
pruelpo | Sep 19, 2011 | Reply
Thanks ittechil for your time and commenting. I appreciate.
foxpete88 | Sep 19, 2011 | Reply
informative..thanks
pruelpo | Sep 19, 2011 | Reply
Welcome dude foxpete88 and thank you also for your time and commenting. Noted.
papaleng | Sep 19, 2011 | Reply
As my father once said, Mgkasya ka sa banig mo.
erwinkennythomas | Sep 19, 2011 | Reply
some good points!
Ruby Hawk | Sep 19, 2011 | Reply
I have never borrowed money to build a house, We built two from the ground up. I wouldn’t advice anyone else to do it unless they are extreme do-it-yourselfers.
galore | Sep 19, 2011 | Reply
Borrowing is not good, Thanks for sharing your thoughts
beingwell | Sep 19, 2011 | Reply
Interesting view. Thanks!
pruelpo | Sep 20, 2011 | Reply
That’s really a common but great saying I had heard from my grandpa dude papaleng…actually that saying will work for people who dream for a change – they will regard it as an inspiration kaya lang sa paraang may pakinabang at may kabuluhan. Thanks.
pruelpo | Sep 20, 2011 | Reply
As usual thank you always dude erwinkennythomas. Noted.
pruelpo | Sep 20, 2011 | Reply
@Ruby Hawk – thank you for sharing it friend. Much appreciated.
pruelpo | Sep 20, 2011 | Reply
Welcome dude galore and thank you too for your thought.
pruelpo | Sep 20, 2011 | Reply
As usual thank you friend beingwell and your kind words. I appreciate them.
reiny | Sep 21, 2011 | Reply
I think should be carefuly to borrow some money, and I think you’re right, it’s not bad to borrow some money as long as you can pay it.
pruelpo | Sep 21, 2011 | Reply
Thank you reiny for sharing your awesome thought. It is noted.