The idea of taking out a loan in order to buy a house or an apartment is not a great idea, although this is what many normally think about when they get their first property. We are faced with many negative aspects that are associated with such a decision from a financial stability point of view.
Answer this question:
Do You Know What Will Happen 10 Years From Now?
Although there is quite a huge flexibility that appears when looking at loans aimed for people that want to buy a home, if you cannot afford the monthly payments because of any reason, there is a huge possibility that you will end up losing your home. This can actually happen 10 years from now.
Most of the friends I have that took out a loan to buy a house agreed to a deal that covers 20 years. This means that they keep paying for the home for 20 years, each and every month. Such a financial commitment is huge.
A Better Approach
The approach that I like the most is really simple:
Buy a home when you can pay it off completely in 2 years.
What does this mean?
It practically means that you work hard until your current income allows you to easily pay the home in 2 years. That offers a much higher security and your property will be yours in a much shorter period of time. Stress associated with mortgages and loans is reduced and your main focus is put on making money and growing your business as opposed to dealing with debt.
In the meantime you can rent a house or an apartment. Generally speaking, you want to aim for rent that gives you what you need at an affordable rate. Make yourself fully comfortable.
You will end up with more money to spend on a monthly basis as opposed to the rates that you pay for the home or you could at least do so if you want to. At the same time, your main focus put on business means that growth is faster.
Financial stability is really important, especially when you are responsible for a business. Taking out a really large home that is aimed to buy a home shakes that stability. You never know if you will be able to repay the loan rates in 5 years from now.