Yesterday I talked to a friend about the fact that he had a flat in the 11th district, which he raised in foreign currency with $ 6 million before the crisis. At one point, he asked himself, “Can’t I pay for the home affair, what should I do?”. From this point on, the story is very typical, as a target-oriented man has sold the apartment for 11 million forints (out of zero) – today this apartment would cost 25-28 million forints – and lost the chance to get out of the apartment in the coming years. But what would have been the real solution for her?
Man’s natural reaction
People typically want to get from A to B, which assumes a kind of goal-oriented way of thinking about them. In such a case, they do not actually see the forest from the tree, they are unable to interpret their own situation realistically and prospectively.
In this case, the target-oriented person takes credit to have a home. If you are unable to pay the loan, you will “return” the apartment to get rid of the loan. Instead of trying to “escape to victory”, he pulls the brake and is driven back by an ancient reflex and pulls himself back. In this case you are in an apartment or family…
What’s up at the end?
I would like to tell you a cute, but exasperating story from 2010. A banker acquaintance told that once a desperate customer appeared in the bank branch and gave the security guard his home key, saying he could not pay his credit and considered the case closed by “returning his apartment”.
But think about it, is that really the case in this story? If I want to throw money into my own home instead of renting a home, I buy credit. If I can’t pay for my credit over the years, then (even at a loss) will I sell my apartment and end? In fact, we lost years and most importantly, our chances!
The hardest way to get to your home is buying it!
We have to understand that the most difficult step is always to get home. Most of them are faced with the problem of not being able to collect up to 20% of self-sufficiency in the foreseeable future in the absence of family assistance. Without it, they can’t buy a home.
Instead, they often pay rentals that are equal to or exceed the potential mortgage of a home loan every month because they have no other choice! So those families who managed to reach this first step can be said to be in a position where they will have the most inexperienced choice!
You have to understand a very important thing about housing
Rental rates and interest rates on real estate / loans always go hand in hand. The person renting the apartment invested in the property to win it. He wants to ride exactly your misfortune, that is
you have no choice at all because you cannot buy your own home (usually due to lack of self-sufficiency).
So he can ask for exactly the same rent as your monthly repayment! And you have to pay for it, because somehow you have to do something. The real estate market works like this and it doesn’t hurt to get it in your head.
When I say that if you got in, you stay at all costs, then I mean. Because you are returning your apartment key, it is almost guaranteed that your life will not be easier, you will certainly not pay less than your credit! Only from that point on will you pay diligently for your own credit, not for your own credit.
But what if you get into an impossible situation?
My acquaintance outlined a thoughtful situation about his own tragedy. He was so afraid of the loan, he did not understand the operation of the loan so much that he had caused himself a loss of 28-11 = 17 million forints in real estate over a period of 5 years + the rentals paid since then, rather than his credit.
He thought he’d played with him, as long as he could, he didn’t pay the installment. However, this is the last step, even if we had another chance. In this case I was surprised that the loan took 12 years, so it could have simply extended the term
- could have drastically reduced monthly repayments
- he could have time for himself until his life was again a good direction
Why didn’t he?
From fear and financial ignorance. Because he did not understand the credit, he wanted to get rid of it at the point where the principal debt was freed and became unbearable. He didn’t notice that there was no return at this point . Salvation means realizing exchange rate losses and now paying out the bank’s profits. He wanted to win time himself, instead of paying for time.
On the other hand, it is encoded in people that the loan has to be paid out as soon as possible. They are so incapable of thinking in the long run (20-30 years) that they are willing to go under the bridge voluntarily as they sign the paper for a 20-30 year run (which could save their lives).
Where will you be in 20 years?
During the conversation, he asked me how many years would I take up the housing belief? I proudly said that I would take it for 25 years, but I would like it for 30 years. He looked at me as a repulsion because he couldn’t imagine this time span.
I assume that we will have to live somewhere in 20-30 years, and I will certainly have to pay for my housing or investments (real estate) in return. Then why would I favor my bank by paying off the loan as soon as I can make a new investment goal out of the freed capital (long-term short-term loan repayment)?
If you have to move, you have to give the apartment?
Let’s be realistic! You may find yourself in a situation where reduced monthly repayments seem to be incurable. This is the only solution, back to the alma mater, that is, the parents, where we can probably live for free.
Of course, in the medium term, we will be paying for our housing in the same way, the question is, what legal title?
- do we pay for our own apartment?
- do we pay the rent?
- do we add it to our multi-generation home (parents’ apartment)?
You need to be prepared for this if you want to move in a strategic mindset. You need to create a complex solution and expected consequences, one fixed point with many variables that you will pay somewhere.
Are you saying, “Can’t I pay for a housing loan”? I’m telling you to pay someone else!
Remember the first article in the article? Get inside the hardest apartment. Especially after a fallen loan, when you have no chance to raise a new loan and to raise your own. Instead, what do the families in this situation do in the medium term? Return their apartment / sell it at a price below and go sublet!
where else will the credit of others be paid back…
Did you turn your mind that when you leave your home – because you can’t pay your credit – then don’t sell the apartment but release it? You see well, don’t miss it! Give the apartment the apartment you are about to liquidate! Find someone who is in a position you will be in! That’s one who
- he wants to live somewhere
- there is not enough self-sufficiency to pay for his own apartment
- forced to pay your apartment’s credit (rent)
I simply do not understand how an 11th district apartment could fail
I know it is very provocative, but at least as true! There are places in the country where it is almost possible to find a tenant for our apartment. In Budapest, the 11th district is exactly the area where you could always find someone.
In addition, in such places, we can count on the rise in property prices, as has happened in this story. What is the other feature of the fallen loans? Usually in a period of crisis, they happen with depressed property prices. So over time, we are actually earning money if we manage to cut off the next economic flowering time!
Do you know what would have happened to this friend if he hadn’t escaped the loan for 5 years, but extended the term with a simple change of contract and issued it to a sublet?
- someone would have paid his credit instead
- today it would have a property worth 25-28 million forints, with a capital debt of about 6-8 million forints
- today you could not ask for 60 000 forints for rent, but 150 000 forints, which would be twice your monthly repayment. You could put the difference in your pocket, put it in your house or simply cut it down on time…