Before you take a Housing
for undertaking a home loan
considering the purchase of a home, we should apply these three criteria as for undertaking
any debt loan.
of all, does it make economic sense to incur a home loan? To determine this, there
are two rules to follow:
The cost to borrow (after-tax interest) must be less than the economic benefit
received (interest, yield, and/or growth in value). Rule two: there should be a guaranteed
way of repayment.
if you're married, are both spouses free from any anxiety regarding this home loan? The principle indicates
that there must be unity between the spouses. Can the home loan be undertaken with peace of mind? If you experience
a lack of peace when you picture yourself taking on this home loan, do not enter
into the debt.
ask yourself, what personal goals and values am I meeting with this home loan
that can be met in no other way?
These criteria are practical, pragmatic, and biblical and should be applied
unemotionally to every debt loan opportunity. The counsel to young couples who
are considering the purchase of a home or those intending to purchase a new home, is never to become so attached to the home
that they could not give it up if the debt could not be paid. Jobs are not nearly
as secure today as they were in the past. Inflation will certainly go up,
and fixed low interest rates may very well be a thing of the past.
psychological burden of home mortgage debt is more severe than most people think,
especially if a woman whose center of influence and security is in her home is
involved. Studies have shown that having mortgage debt is a stressful factor and
that degree of stress relates to the amount of the mortgage.
question of whether or not to pay off the mortgage, if that is an option, is really
an economic, psychological decision. Economically, it may not make sense to pay
off a low interest rate mortgage, even if one has the funds to do so. However,
psychologically, it may be, by far, the best course. Again, I would remind you
that finances are nothing more than a resource to accomplish other goals and objectives
- they are never an end in themselves. Therefore, even if it does not make economic
sense to pay off a mortgage, there may be higher priority goals and objectives
that need to be met. Money then becomes merely the resource to meet those goals.
The decision does not have to be always an economic one. That counsel is, of course,
good for all decisions.
your loan interest as well as your compounding interest with our calculators.
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