Short Term Or Long Term Housing Loan
You may be one who plans and wants to buy a house through a housing loan and you are presented with the option of paying it off within a short period of time or a long period of time.
What will you choose?
That actually depends on your needs and financial capacity.
Go short term if:
- you have enough to feed your family and do your everyday necessities after you have paid off your amortization for the month.
Advantages: lower interest, ownership immediate.
Disadvantage: initial cash outlay is abruptly bigger.
Go long term if:
- you want to invest but you are financially limited but still would be capable if you choose the long term scheme.
Advantages: monthly investment not heavy on the pocket; when you die earlier than the house is paid for, it is considered paid as long as you have morgage redemption insurance (MRI).
Disadvantage: Higher interest rate.
Filed under: Decision Making by Carlo