Its a big problem today in the UK where people are saddled with incredible debt and enveloped by the illusion of the investment lifeline they hold in their property.
Recent studies have shown the unaturally high mortgages held by many young home owners is set to cripple them long term. Convinced that the best route to go is own a home at any cost for the asset can only grow in value, could actually be wrong.
With house prices at record highs, many first time buyers can only afford teh fashionable 'interest-only-repayment' plan. Meaning after 30 years of struggle to pay an average £1200 per month + insurances and bills, there will still be 100% of the initial capital to be repayed.
This will be fine if prices continue to rise, such that there is enough equity to pay the final repayment and leave enough for a comfortable retirement. The reality though is different as many experts foresee a significant correction in the coming decade, a correction that could wipe as much as 50% off todays levels.
The advice is to begin to re-think, buying is cultural phenomenan linited to the UK, its is not necessary to take such risks. Better ans safer returns can be found in bonds and isa's. Its worth speaking to your financial advisor before saddling yourself with a lifetimes debt.
