Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (8)

Read? Will You Try To Pay Off Your Housing Loan ASAP If You Have One? (7)

I am glad that someone like Dr. Michael Leong who is well-known and respected local BB has the same view of paying off housing loan asap.

Guess who are telling you to take the longest housing loan that you can find?  Are these people from the property or housing loans industry? Think about it. You probably know them, right? May be we shouldn't be taking advices from people who may profit from giving us such advices.

By Dr. Michael Leong

Firstly, pay off your loans

When I first started working, I was told that I should immediately take up a housing loan as it was my entitlement. Before having a job, the bank would not have granted me a loan. Hence, I was told not to 'waste' my entitlement and I then started on my journey as most people would - I took up a loan to buy a house.

As the years went by, I realised that having a housing loan forces one to be constantly employed because failing that, one cannot pay off the monthly loan amounts and when one defaults, the bank can repossess the house. In many ways, the age old logic of getting a housing loan actually strangulates one's ability to start off any new businesses because the housing loan requires a steady monthly income which one can only get when one is under the employment of others.

When we start off a new family, the original house that we bought is likely to be inadequate for our needs. We then upgrade and commit to a further 30 year loan. This process of upgrading eventually forces us to be employed for the rest of our lives. Hence, having a housing loan is like having a jail term where one is beholden to the bank for the life of the housing loan. To pay for this loan, one has to have full employment till the end of his housing loan.

The first step towards retirement is to have a plan in place to pay off your housing loan as this is usually the largest loan that you can have. Once you pay this off, you will have the feeling of freedom that you have never experienced before. This is the freedom that may initiate you to start off your first business which may then become your ticket to financial freedom. Unless you are a high flying executive, it is unlikely that employment alone can make you financially free.