The Concerns of Newlyweds Regarding Housing: How Much Should They Borrow for Jeonse Loans?
For couples preparing to get married, the biggest concern is undoubtedly "housing." Recently, an engaged couple attracted attention when they showed differing opinions regarding their funds and loan amounts for their new home.
In a recent online community, a post titled "We are a couple about to get married, and I would like advice on differing opinions about housing prices" was shared by a woman identified as A.
According to A, she has saved 45 million KRW while her boyfriend has accumulated 80 million KRW, totaling 125 million KRW in available funds. They plan to use this money along with additional loans to secure a jeonse for their newlywed home.
However, this is where their opinions diverged.
Her boyfriend advocates for minimizing loans. He suggested borrowing around 50 million KRW to find a villa jeonse in the range of 170 to 180 million KRW.
On the other hand, A wants to take out a loan of 100 to 150 million KRW to secure a jeonse for an apartment in the mid-200 million KRW range or a neat three-room villa. Due to the increasing concerns over jeonse scams, she prefers an apartment.
How Much Is the Burden of Jeonse Loan Interest?
The main reason her boyfriend wants to minimize the loan is the monthly interest burden from the loan. According to A's calculations, the monthly interest for a 100 million KRW jeonse loan is expected to be around 550,000 KRW.
While her boyfriend feels that paying 550,000 KRW in interest every month is a waste, A does not think it's unreasonable.
A asked, “The apartments we are looking at have jeonse prices in the mid-200 million KRW range, so wouldn't it be good to borrow around 130 million KRW? Is that a significant stretch?” seeking opinions from netizens.
Netizens responded with a variety of opinions, saying, "Live in a villa and save money. Gather a significant amount to buy a house," "I want to discourage jeonse for villas," "If you have no money, living in a villa makes sense," and "Jeonse for a villa isn’t worth it. It's tough when you move out."
According to a survey conducted in March by a marriage information company among 1,000 newlywed couples (500 men and 500 women) who married in the past two years, 43.7% reported they live in jeonse.
Regarding the type of housing, apartments comprised 81.7% of the residences. This was followed by villas (7.9%), single-family homes (5.3%), and officetels (5%).
Residents of Honam, Chungcheong, and Yeongnam regions tended to choose apartments as their newlywed homes, while the proportion opting for villas in Seoul and the Gyeongin region was relatively higher compared to other areas.
The choice of housing in the early stages of marriage is an important decision that can have significant impacts on future asset formation and lifestyle patterns. It is crucial to find a consensus that thoroughly considers both partners' financial situations, future plans, and preferences.
Image sources: AI images for understanding the article / Bing Image Creator, stock photos for understanding the article / Getty Images Bank.
