Housing Market Fall Buy or Rent ?

  Since the market has fallen in some locations, key word being some locations, all kind of talk is going around about what should be done. Some even suggests renting instead of buying, an idiotic ideal. If the market has fallen would you not buy when it's a buyer's market where you can name your price? Who would give such advice? A Landlord. Some places are a seller's market but I'll bet you don't hear about them.

  If you have a stable job and really nobody knows that these days, but we all assume we have a tomorrow why would you rent? If your credit is too bad for a loan, renting isn't an option, it's mandatory yet you may be able to get credit and just think you can't. If your building a new house and need somewhere meanwhile that is a time to rent. Older people may want to consider renting due to upkeep. People getting divorced or having marital trouble may want to rent until their life goes back to normal. Other than these reasons, there are none other that come to mind. If you can obtain a loan why wouldn't you except for the following reasons? Why would you want to rent and pay money and never own? Renting is a 100% non-recoverable expense. While you don't have upkeep expenses or taxes to pay you also don't have security and ownership either. You still have to have insurance. At any given time the owner can simply sell or tell you to leave and your on the road again.

  This by no means justifies a Interest Only Loan. These loans are simply renting from a lending institution except now you have taxes and upkeep added. Personally I'd rather not sell a piece of property to someone with an Interest Only Loan. There are ways around it, it's called adjusting or settling for a bit less or affordability. We'd all like to live in Biltmore but we can't so we face reality and buy what we can afford. Many larger houses are financed with these interest only loans. The only time I can think of is if you know you will be able to pay it off either early or at the maturity date. I hope the day never comes when this is the only way to buy.  

  Long Term Mortgages are ok if you need to stretch out the payments to get them lower to be able to get into a house but keep them as short as possible. I am still not use to the 40 year long bank note. One can do an Amortization chart to see how slowly and just how much will be invested at ownership. This usually don't get mentioned and with good cause, it's scary and depressing yet it's almost a must. If possible see what you can do with 20 and 30 year notes. You will probably not be able to do 15 but that's ok. The longer your mortgage the more you are counting on staying employed and healthy. You might even consider a lesser amount for starters and later on when your making more either adding on or trading up. You might have to lower your standards for a while but be able to have peace of mind. As time goes on one day we may see that we will need a 40 year or more loan as prices climb and boom or not, they're not making any more land and the population is growing. 

   How much should I spend? You should never spend more than you're comfortable with. While you do need to get Pre-Qualified you need to remember that what you get is the maximum. If you do not feel comfortable with that amount don't spend it, you are not committed to spend the amount quoted, it is the cap or maximum dollar you can spend. You shouldn't have to pay off your car to be eligible to buy. I own a lot of antique cars but that doesn't mean I drive or would want to drive them everyday. Most new cars don't even last 20-30 years. You need to figure in utilities and expenses and then have a little left to play with. Many divorces are caused by financial problems and if you can't got out to eat a little or see a movie or go on at least a few days vacation your in trouble. If missing a week of work would possible cost you your home or car you owe too much. Remember that Bankers, Mortgage Companies and Realtors all make more when you spend more, it's you and your families life so don't be afraid or ashamed to say you don't want to spend that much, do not get pushed into anything.  

Just a quick reference link here, could this be you next? Click Here. 

   That's Just my 2 Cents Worth,

Anthony Kimbrough - Affiliate Broker

American Homes & Realty Inc