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Mortgage = good debt as the asset is extremely likely to grow in value long term
Tell me this one again? Why should house prices grow? I bought a flat in 2009 (yes, I know). It is still @-20% down on value and sliding more...
Tell me this one again? Why should house prices grow? I bought a flat in 2009 (yes, I know). It is still @-20% down on value and sliding more...
A statistical outlier....
Good debt, bad debt, you're not debt free if you have a mortgage.
Good debt, bad debt, you're not debt free if you have a mortgage.
No you're not, but for most people they have an asset which has a higher value than the debt which is different than getting a £20k loan for the latest Ford Focus.
So getting a loan for a 1970's 911 is good debt, getting a loan for a 2017 911 is bad debt
Mortgage = good debt as the asset is extremely likely to grow in value long termTell me this one again? Why should house prices grow? I bought a flat in 2009 (yes, I know). It is still @-20% down on value and sliding more...
I did say extremely likely, not 100% guaranteed. Past performance is not necessarily an indicator of future growth of course but think of a property asset over a longer period like 20/30/40 years and look at the average growth rate. It's basic balance of supply/demand economics BUT with lower immigration, people leaving and if a brutal relaxing of planning laws were to happen, that balance may well change. It's also possible you bought badly or were very unlucky as not many properties are still in the red compared to 2007, let alone 2009. Where is it ?
I imagine some of those Nottingham 1 bedders aren't doing so well.
I'm debt free and could probably stop working, certainly if I moved to a cheaper area/downsized, but I like where I live, and would get bored anyway, so carry on whilst I can still earn a decent amount.
No you're not, but for most people they have an asset which has a higher value than the debt which is different than getting a £20k loan for the latest Ford Focus.
but if you pay £20k cash for a focus when you have >20k left on your house, you could have put the money on your house instead. Yes, the lending is secured, and therefore cheaper, but you're effectively still borrowing 20k for a car (and, worse than a car loan, you can lose your house if you don't pay it..)
Some of the others in our family are openly talking about debt not being a problem, because it will all magically be sorted when granny dies
And what will they do if granny leaves them nothing due to care costs/dementia fuelled spending spree/tax/falling out etc. ?
When my parents die I'll probably inherit a house, but I'm not planning my future around it, it's a big gamble for anyone to take, and I'd honestly rather I didn't inherit any money from them.
I've openly told them if they leave me any actual money (cash/savings) at all I'll be disappointed as I firmly believe they should spend any money they have* enjoying themselves, I'd trade any lump sum they could leave me for seeing them enjoy their last years. They've already helped me and my wife out by helping us with deposit to buy a house together, their job in supporting/setting up their child is well and truly done in my eyes.
In terms of OP though, we have a mortgage and student loans, no [i]other [/i]debts at all and we try to live within our means and normally manage to save something each month for future purchases/rainy day.
I understand perfectly well how to make use of finance, 0% deals, and how it could enable me to buy things, but I just don't like borrowing money at all and sleep better knowing I don't owe anything other than for the house (which is a better situation than renting), it's the only real debt I'm comfortable having, I don't begrudge other people for acting differently, but it's not for me if I can help it.
* to clarify, their retirement income is well in excess of the combined (full-time) income of my wife and I, they're in a better position now in retirement than I imagine we ever will be, I still want them to spend it on themselves not leave it to us.