Jakarta, Armfalcon.com – One of the dreams of a newly married couple is to be able to live together under one roof in a comfortable dwelling. In addition, the financial ability of married people in terms of mortgages can also be higher because of the joint income mortgage system.
However, there are a lot of things to think about about this place to live, bearing in mind that a house is not a cheap asset and when you buy it, you must have a long-term commitment regarding credit, maintenance, and so on.
But what happens if the plan to buy a house appears not long after someone holds a big celebration for a wedding?
Which should be done first? Restoring financial condition or buying a house? Here’s an explanation.
Check priority first
Try asking yourself, is home a priority that must be fulfilled in the near future? Is it not possible for you to live in your parents/in-laws’ house first, or rent a house?
If the answer is no, then think twice about buying a home today. Delaying doesn’t mean you won’t have it forever.
No need to worry about rising house prices or running out of stock of houses in strategic locations. Just decide when you want to buy it, at what price, and start allocating money to buy it, be it cash or through mortgages.
Check your total savings
The ideal limit for current assets (savings, cash and cash equivalents) is a maximum of 20% of net worth. The value of net worth itself is obtained from the result of reducing total assets and total debt that has not been paid off.
When your total current assets exceed 20% of net worth, it means you have quite a lot of savings.
If you have to repay, know this
Monthly debt installments may not exceed 30% of total income. And the amount of mortgage debt cannot exceed 50% of your total assets.
It is also important for you to pay a large down payment so that the principal of your mortgage debt is reduced. Or you can also make partial repayment in the middle of the road when you receive bonuses from work or holiday allowances to reduce the principal debt, while reducing the installment burden.
Make sure if you buy with a mortgage, you must be protected by life insurance
No one knows what will happen in the future. It could be that when the mortgage installments are running, we close our age and pass this debt on to our beloved family.
If family members do not have enough money to pay the installments, this valuable asset may be confiscated by the bank. Therefore, it is very important to have life insurance if we are in debt.
Life insurance will disburse the sum insured when the insured loses the ability to earn a living, say due to total permanent disability or death.
The sum insured can be used to pay off the remaining mortgage and return the name of the house to the legal heirs.
Where’s Cuan? Buy land first or house first?