Property culture

We live in Romania, a country where the culture of ownership persists. Being an owner comes from the desire not to pay rent even in retirement.

Are you Romanian and do you have a house of your own?

Maybe you don’t have one yet, but are you planning to buy one?

We are the country with the most homeowners. 96% of the Romanian population, to be exact, according to research published by Eurostat. Only 1 in 20 Romanians lives in a house that does not belong to him or his family.

Romania is a people that has developed the cult of property. The leading position of owners also represents a high degree of indebtedness. Romanians benefit from easy-to-achieve criteria in terms of contracting a real estate loan, compared to other peoples. Bucharest is the city with the most residents indebted for a property.

The need to have a roof over their head

Maslow ranked the needs that a human being has throughout life. The needs start from the basic ones, for survival, reaching the highest ones, practically the most expensive. Owning one’s own home is on the second level after physiological needs. The property culture of Romanian citizens also denotes the need for belonging. Even if you are abroad, you have property in Romania where your friends and family are.

Acquiring your own home is the most common financial objective for Romanians. It is also the reason why emigration has increased. Romanians leave the country to work abroad, where salaries are higher and they can save more money to pay for their home. It is true that there are also people who see themselves as renters all their lives. For them, flexibility is more important than stability, which the very expression of property: “I sit in my house” denotes.

Stability represented by consistency, living together in one place “my house” and the need to belong to a place and a social group. Satisfying a person’s need for achievement validates them as human beings and makes them optimistic, much stronger in confronting the vicissitudes of life, namely completing the loan by facing a demanding job and an annoying boss. Therefore, even the long duration of completing the loan does not represent an impediment to working and paying off the desired property.

Do you remember when, as a child, in kindergarten, you argued with your classmates over a toy? The argument went like this:

“It’s my car!

– No, it’s mine!

– Mine!”

We work to possess goods. The right of possession confers pride, but also the peace of place: home.

Your own home and financial planning

The sense of ownership, of those who want to have a place of their own, constitutes the establishment of this culture and has determined the Romanian state to invest and offer its citizens the opportunity to access their objective.

The culture of ownership in our country has been supported not only by the state through the accessible programs made available, but also by banks that allowed a high degree of indebtedness: up to 65%. In Germany, a country ranked last in the number of homeowners, financial security is very important for citizens and this does not translate into owning a home. For the German citizen, financial security means having money set aside to be able to maintain independence in choosing a job, in supporting expenses and unforeseen situations. In contrast, the Romanian considers that he has financial security if he has a place of his own, a house. “I pay the installment, but I know it is for my house.” It is true that the Romanian has a completely different nuance of financial security and not exactly a healthy one, unfortunately, for personal finances and for his and his family’s financial future.

Owning a home also brings risks. One risk is the inability to pay the loan, either due to job loss or temporary incapacity for work due to health damage. A second risk, in the case of a loan contracted by a couple, is the separation of the couple, which endangers the financial and spiritual freedom of the two people. Thus, events in the emotional sphere can also short-circuit the financial sphere. Unfortunately, an aspect that is unlikely to be taken into account when contracting a real estate loan. (Here, we are discussing the situation in which the two cannot afford to return to each other the money necessary to pay for the home in question.)

Therefore, the desire to have their own home comes with responsibilities and risks. Caution and financial planning get mortgage owners out of the impasse and give them the financial security necessary to annihilate the risks of such a decision.

There are people who have been cautious regarding the monthly installment level. They have a lower installment than their financial ability, which gives them financial security and relaxation. Relaxation can take the form of early closing of the home loan. Increased financial availability denotes planning. This planning should be done long before finding the home, several years in advance, when the property was in mind. Time helps to raise a large amount of money. This is translated into advance and thus, the loan is smaller (the amount borrowed and the duration.) However, financial planning is also vital after accessing the loan. It aims at early closing the loan. Adequate planning, in the entire lending situation, can shorten the loan duration by several years and provide financial support of several thousand euros even after the mortgage is taken out and the house, in fact, becomes personal property. (The existence of the name on the contract does not mean ownership of the respective asset until the full cost of the home is paid.) This planning is a healthy option that preserves the cult of property and provides financial security.

From the desire to pay off the loan and become an owner faster, you have the option of saving money. With this, you can go to the bank to repay the loan, to shorten the duration or amount borrowed, or invest it to receive a good return. The return constitutes a passive income that allows you to close the loan early, shortening the duration and saving interest.

In conclusion, planning has a healthy impact on personal finances. Planning for early closure can be done even after the loan has been in progress for several years. Results differ, however, depending on your personal financial situation.