If you’re living in the Western world you would have been bombarded with the importance of getting a mortgage. This is drilled into us from we get our first jobs at 16 making £4.66 per hour (practically slavery) right through to university. Older relatives, friends and society consistently say to us save your money, find yourself a stable job and oh yes get a MORTGAGE.
Yes there’re benefits to owning your own home…no one’s disputing that issue here. But what I’m addressing is the low level of aspiration our generation and previous generations have chosen to adopt. Obtaining a mortgage isn’t the be all and end all.
Now for a long time I was disillusioned by the importance of a mortgage. I thought…I need to raise this 20% deposit. But then reality hit me. I started looking at houses and realised that acquiring a 20% deposit for a £200,000 house in the South of England was going to be a mammoth task on a salary below £20k a year. Yes, I could opt for the Help to Buy scheme but they too have their disadvantages. So what other option did I have? Get a job and work hard and save up for this 20% deposit? Because once I get this mortgage I’m told it will give me security…stability…and will change my life. Right?
But I don’t want to settle in a job/career I’m not happy with just to rush and get a mortgage. I see so many people doing it this way around and end up becoming stuck in this vicious cycle of…I hate my job…but I have a house to pay for…because ultimately that’s what it leads to. You’ve really got to ask yourself here… was it worth rushing to get that mortgage?
Now I have decided that I’m no longer going to aspire to get a mortgage! Let’s put that option in the bin along with a dead end 9-5 job and a mediocre lifestyle. I’m going to aspire to be a cash buyer. No deposits. No involvements from the bank and most importantly no mortgage. Now you may say this is ludicrous Nat. You can’t afford to buy a house cash when you’re not even employed. This is true…if my current situation was a person it would be laughing at me right now saying ha that will never happen! But I’ve realised there are absolutely no benefits to me putting limits on myself even before I’ve tried. My goals need to inspire me and quite frankly mortgages don’t!
Now if you’re still not convinced by my argument. Here are a few facts about mortgages that may make you change your mind.
- You don’t actually own your home
By definition a mortgage is a “…legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt”.
Basically the bank lends you the money to buy your home. However, there are requirements attached to this ‘generosity’. Interest is added to your loan which must be repaid on top of the repayments of the house. This is nothing new. We know that banks make their money from interest.
Also title deeds give the bank the right to take ownership of your property. Although they can’t exercise this right at their own free will. The conditions of the contract state that a failure to keep up with mortgage repayments gives the bank permission to sell (repossess) your home to regain the money they lent you.
So ultimately the banks still own your house until you make that last repayment.
- Mortgages weren’t designed to be paid off
The word mortgage comes from the Latin words Mort and Gage, literally translated as Mort = Death and Gage= pledge. Now I don’t think this is a coincidence. A mortgage is a death pledge?
As I mentioned before, banks make their money from interest from loans. Therefore, the longer it takes you to pay off your loan the more beneficial it will be for the bank. So why would a bank want you to pay off your mortgage early if they can have you trapped for life? Let’s be real
Now please don’t misunderstand my argument. I think property investment is a great way to gain wealth. But the core of my argument is centred on our levels of belief and aspiration. If we only aspire to gain a mortgage isn’t that dooming ourselves to this death pledge? Can we not aspire to be cash buyers? Can we not tell our children to acquire 100% of the house price rather than a 20% deposit? Should we not work together as a generation to build each other up so we can generate the wealth among us that our children’s children never have to take out a mortgage again?
These are the sorts of things I aspire to do and with a little belief and hard work. I’ll get there!
I would love to hear your thoughts. Please leave me a comment below or send me an email.