"It was a different world then wasn't it? Can you imagine a young couple today saving enough to buy their first home for cash, say $500,000 and having $80,000 left in the bank?
Now it all depends on the easy credit you mentioned or it falls apart and house/land prices are much too high.
Which way would you prefer for your children?"
It was a different world back then. But, not many people had that much money saved. Wages were very very low. My parents were freaks and saved every cent. They had bought another property and had sold it for a profit so hence the cash at bank. The Banks were deregulated in 81 so lending got easier but nothing like today. Rates were much much higher back then and loan terms were not 25/30/50 years. So the principle payments were much much higher and no interest only loans.
Therefore,
I am much happier for my children to get a loan in today's environment compared to the lending practises of a few years ago. If they work hard for a few years and buy an extra property as an investment, when they sell that they can pay off their home mortgage. Trying to pay off a mortgage with wages is nearly impossible in under 20 years for most people.
But then again, why would they sell. My parents home which was bought for $12,500 in 71 now pays them $22,500 in rent.
Ahh, interest only loans are great aren't they.
More money left in your pocket while you are taking care of those eggs.
Time is your best friend. Just depends when you enter every cycle to get an accelerated boost at the begining.
