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| Iqbal Ramadhani Fuadiputra, S.E., M.SM., The lecturer of Management Departement in UMM (Photo: Special). |
Facing the skyrocketing of property prices, many youths are choosing to take the opportunity of using Kredit Pemilikan Rumah (KPR) as their solution to owning their dream home. However, similar to any other financial decision, the use of a KPR has its advantages and disadvantages that need to be carefully considered.
Iqbal Ramadhani Fuadiputra, S.E., M.SM., as a lecturer in the Management Department of the University of Muhammadiyah Malang (UMM), explained that this phenomenon could have occurred due to the imbalance between the increase in property prices and income growth. "Therefore, this KPR system was chosen with the aim of providing financial support to buy a house. It is considered that it can help cut the monthly expenses over a certain period of time," he said.
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One of the main considerations in deciding to apply for a KPR is estimating the monthly income that will be used to pay the installments. "It would be better to make a budget and plan carefully so that the installments can be paid before the due date. If the loan goes into debt, the house assets can be taken or auctioned off by the bank," he explains.
Furthermore, the use of KPR also brings several opportunities. For example, the remaining money from installment payments can be allocated for other investments or business needs. In fact, with land prices continuing to rise, property ownership can be a promising investment alternative for homeowners.
However, the Secretary of UPT. Penerimaan Mahasiswa Baru UMM also warned of the risk of fluctuations in the interest rate that cannot be ignored. The mortgage system can fluctuate depending on the interest rates available at Bank Indonesia.
"If the interest rate is constant, there will be benefits. However, if the interest rate fluctuates, you will face additional risks, which can affect the financial stability of the family," he explains.
According to Iqbal, some people think that paying the KPR installments earlier can reduce financial expenses. Thus, they can be more relaxed and free when allocating their monthly income. However, it leads to another disadvantage, such as KPR penalties that are affected by the length of the loan that has been running.
"There would be no problem if the KPR is fully paid before the time limit that has been specified. But there will be penalties. In fact, the amount of this penalty can be very large. Of course, this has the potential to drain your income and savings," he adds.
As an alternative, Iqbal also suggests other alternatives to home ownership, such as social housing subsidies. "Moreover, social housing subsidies offer ease of financing from the government and the owner. Although it does not always have the best quality," he concluded. (lai/wil/put)
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