First home
Dear Sophie,
Forget about the usual questions about your first home – the biggest thing I want you to think about is getting a house as YOUNG as possible! If a bank said you were ready to buy a house at 10, you totally should!
Here's why:
- Banks lend you lots of money to buy a house. Think about it – if you save up $50,000, the bank might lend you $450,000 more to buy your own house! No one else will lend you that kind of cash.
- Think of your house like a giant piggy bank. Yes, you pay interest on your mortgage, but as you gradually pay down the mortgage, you're building up money in the value of the house– this is called equity. Later, you can sell it or even use that extra value to get an even nicer house. That is why you will lose out when you are renting a house.
- Forced piggy bank for the future: It's easy to dip into savings when they're just sitting in your bank account. But, the equity in your house is harder to access. This means that the money put into your home is more likely to stay put and grow.
While the idea of a huge mortgage might seem scary, mummy and I know how stressful it can be! Imagine the amazing feeling of owning your own place at a very young age. That's something to seriously think about!
Love always,
Daddy
