Buying a house vs renting an apartment is a never-ending discussion among millennials. It is really rare to find young adults making a large purchase when they’ve just started earning and still trying to figure out their life as a young adult. While some youngsters are not yet prepared to enter into a mortgage commitment, others think that homeownership is not for them unless they have decided to settle down and start a family.
Having said that, a lot of millennials are unaware that they can actually afford to buy a house even if they are just beginning their career life. Gone are the days when young adults will have to wait for so many years to reach their middle age and save up for their dream house.
Fortunately, there are lots of buyer-friendly loans available for youngsters who wish to purchase a house as early as possible. Real estate agencies are also providing rent-to-own opportunities with equated monthly instalment (EMI) to service their clients in establishing a successful life on their own accord. If you are among the young generation who like to consider buying a house at a young age, know that there are many reasons you should go for it. Aside from the well-known fact that homeownership is one of the many indications of a successful life, here are other benefits that you will enjoy when you buy a house in your 20s.
You build your credit score.
The main objective of building a credit history is to make you qualify for lower interest rates and fees should you consider taking out a larger loan in the future. When you buy a house, you get to build your credit score by obtaining a loan from a financial institution. Given the house is a big purchase, being consistent on home loan repayment can make your credit history look strong and impressive to future lenders.
For sure, a house will not be the only huge purchase you are going to make in your life. If you reflect a good credit history, it will help you afford a much larger purchase such as a car, a wedding or a business franchise.
You improve your spending habits.
Once you have made a big purchase, you will learn to be more responsible with your finances. While some people of your age are spending their money on luxury bags or expensive weekend getaways, you, on the other hand, will have a bigger responsibility of paying a mortgage and other home utilities. Being responsible with your spending habits at a young age is healthy for your savings account. Remember, just because a house is considered a big purchase doesn’t mean you are wasting your money on it. Trust us when we say that a house you’ve purchased while you were young is something you won’t regret when you get older.
House is a life-long investment.
This might sound a bit cliché but a house will be your lifetime investment that shows lower risk compared to other expenditures. It can also give you high returns, considering the land prices that constantly increase over a period of time. In other words, when you purchase a home, your money is not only safe but it also multiplies in the long run.
Loan repayment takes time.
Simple logic. When you buy a house at a young age, you have a longer period of time to fulfil your loan obligation. The longer time you have, the lower your EMI will be. There are actually young homeowners who are renting out some of their empty rooms to Gen Z tenants so that they can earn some extra on the side. This strategy also helps you to have someone else pay your mortgage in time.