Getting old and grey but still with some mortgage to pay

NO LONGER A REALITY: Paying off a mortgage before retirement.

GROWING up there appeared to be a progression of events to follow in the world. Leave school, go to university, travel the world, get a job and then settle down and buy a house.
Today our ambitions haven’t changed that drastically, most 30-somethings want to own their own home, but it’s no easy feat. And to add salt to the wound, a new study reveals that paying off a mortgage before retirement is no longer a reality, so it looks like we’ll be pretty old and grey by the time we can wave goodbye to that debt.
The traditional 25-year mortgage term is being replaced by 30, 35 and even 40-year terms, while the application process is much more rigorous also, as borrowers now have to contend with strict affordability assessments that factor in other financial commitments. Banks would once bend over backwards to give a mortgage.
They would usually finance up to 100 per cent of the cost of the property and then throw in a few thousand to get you started on furnishings. But long gone are those days! When my husband and I were buying our first house, it was a challenge. The bank would finance 80 per cent of the price, which meant that we had to find the other 20 per cent. Luckily we had some savings from working abroad, but it made us realise how difficult it is for first-time buyers these days. Saving 20 per cent of the price of a home on the average Spanish salary is a daunting task.
And because of having to wait longer to save a deposit, the average age of many first-time buyers nowadays is 36. Therefore, like everything when it comes to finance, an ability to save is crucial for those who want to jump on the property ladder.
Start saving as early as possible and stay focused. Don’t be tempted by properties beyond your financial reach and make sure to shop around for the best possible mortgage.

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Euro Weekly News Media

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