Does Mortgage Count as Debt?
Devastated with your credit card debt, and any other forms of debt where you constantly get harassing calls from debt collectors? Perhaps you’re on target to wipe out your debt, and currently in regret why you’ve gone out of control in managing your finances.
Reasons Why You Think that Mortgage is NOT a Debt
Should you consider buying your first home? Some of your debt amounts might still be bearable, and paying it off might be feasible as you look into the figures. But, what if you’re down to the last target, which bears the largest amount? Your mortgage.
Well, whether what strategy you take to knock it down, you might ponder up until when can you gain financial freedom? When can you de debt free? If you’ve successfully eliminated each debt in your list except for your mortgage, you might feel debt-free. You might not think of your mortgage as a debt, but you should realize that your mortgage should still be counted as one.
Reasons Why Mortgage is Counted as a Debt
There are reasons why some perceived that a mortgage is not debt. The primary reason is that your house is considered an asset. Since over the span of your mortgage, your asset is likely to increase in value when disposed, you perceived it as sufficient in paying back the money that you owe. As businesses lend money to compensate for earnings projects and programs so are you.
Moreover, you might be fine to let your asset go since for sure you can get a decent apartment to rent, but because your just throwing money out of the window is unacceptable.
In fact, recent survey shows that average people pad off their mortgage on the age of 48, which means that you can potentially be carrying this load in the significant stage of your adult life. Anyways, for some it’s just how it is for sure.
If you’re home is said as your residence, it is a liability; unless, when put on rent. Well, even if you do, you’re still obliged for repairs, upgrades, home insurance and all the others that will reap your pocket. Besides, the huge money you invested for down payment plus your monthly payments for your mortgage could have been more useful and practical if put up for investments where you can grow your money.
Though you can live somewhere you wish to, renting will cause you a lifetime of monthly expenses rather than owning your own home. Besides, renting is just a waste of you’re money as compared to your own home where you can build asset. However, owning a home might also be costly as you think it’s not. This is to consider some of the cost below when you own a home:
- Taxes
- Mortgages Interest
- Home repairs ad maintenance
- Property Insurance
- Restoration or Upgrades
Though it may not be justifiable for everyone, as some people are putting their mortgage as their priority, there are a few who have paid off their mortgage loan earlier than they reach the age of 48. These are those who thought of their mortgage as a debt that needs to be taken out of the path.
What Should You Choose?
Completely knocking down your entire debt and owning your own home will give you a chance to focus on the other goals in your lifetime.
But, if you’re willing to carry the load of your mortgage up until your old age, then its a must not to acquire any types of debt to focus on paying it off.
Moreover, if you’re swimming in the pool of debt, if you’re load is too much to carry and you’re endlessly owing to someone, then don’t give up, there’s still a special category that can be a way where you don’t have to pay off your home loan. These and more will be tackled in the later article.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
1 | Personal loan | $8,000 |
2 | Credit card 1 | $6,812 |
3 | Tax Debts | $5,399 |
4 | Overpayments | $5,200 |
5 | Overdraft | $700 |
Total Owed | $30,204 |
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
60%
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.