| Since the housing crash there have been a number of | | | | vacations. That low 2 year mortgage payment |
| articles and talking heads lamenting homeownership. | | | | doubled when the loan readjusted and now they could |
| The opinion is that it's just not a good investment | | | | not make the new payments. Add that to the poor |
| anymore and for some people homeownership is just | | | | economy, job losses, property tax increases, insurance |
| not in their best interests. | | | | costs increasing and you have the real estate disaster |
| Let's look at this from a long term prospective. Owning | | | | we see. But does all this really justify not owning a |
| a home adds pride for the home owner as well as the | | | | home? |
| neighborhood. You can drive down most streets in | | | | In my opinion the cynics are wrong, wrong, WRONG! |
| most any neighborhood and tell which homes are | | | | Not in my lifetime have people been able to buy a |
| rented and which are owned by the people living there. | | | | home at such great prices and at such low interest |
| Home ownership adds stability to the community and | | | | rates. If the banks would loosen up the financing to |
| to the tax base. Crime is always less in communities | | | | people who could actual afford the home purchase |
| where the majority of homes are owned instead of | | | | and FHA would stop putting silly requirements (such as |
| rented. And let's not forget about a home's value. Pride | | | | the 20% 90 day rule) and banks stop adding their own |
| in ownership translates into taking care of the property, | | | | inane rules we could actually work our way out of this |
| adding stability and possibly even increasing its value. | | | | mess. |
| Think back to your grandparents or another family | | | | In my home market here in North Port, and on my own |
| member. They bought homes, worked in the | | | | street you can buy a 3 bedroom 2 bath 1780 square |
| community and stayed there till they passed on. Either | | | | foot home for about $100,000. If a buyer were to put |
| the surviving spouse or the heirs sold the house and in | | | | 10% down ($10,000) and borrow $90K at 4.75% (30 |
| almost all cases they made a large profit. My own | | | | year fixed mortgage) the payment would be $ 469.48 |
| grandparents bought a house, lived there for 35 years | | | | plus taxes and insurances. The couple next door to |
| and then sold when my grandmother moved to Florida | | | | me rents this exact house and pays $925.00/ month. |
| with us. My grandmother was shocked when the | | | | Even if taxes and insurance are $350.00/ month it's still |
| house sold for $75,000; they bought it for $ 6,500.00. | | | | better to own than rent. We will eventually have equity |
| I know you're going to say times are different; people | | | | increases when our market gets back on its feet. The |
| don't stay in one place anymore. Yep, you're right, but | | | | interest and property taxes are a write off as well. |
| in most case they still are better off owning instead of | | | | (But I'm not an accountant so check with your CPA as |
| renting. | | | | to your taxes). |
| Some 'experts' have the opinion that homeownership | | | | In some markets you can buy houses in the mid $50's |
| is dead. Housing values have plunged and people are | | | | to high $70's and if they qualify for FHA with 3% down |
| losing their shirts. Yes people did buy in the heat of the | | | | the payment would be less than rents in that same |
| market. And now the crash has caused their values to | | | | market. Let's look at the payment: $ 70,000 loan |
| plummet. I know you've heard this over and over, but it | | | | amount 5.0% interest 30 years payment=$375.78 plus |
| happens to be the brutal truth: for a large number of | | | | taxes and insurances. |
| those deals the people should have never have been | | | | What needs to happen is a rational discussion about |
| allowed to buy the homes, and 'creative financing' | | | | homeownership and the responsibilities that come with |
| should have been suspect. No money down deals, | | | | it. People need to understand that when they buy a |
| loans such as pay option ARM's (where you paid a | | | | home they hold its future value in their hands. If they let |
| smaller payment with the interest charges adding to | | | | the place go or keep it up, they control the results. Also |
| the balance on the back end) seemed too good to be | | | | people who buy a home must feel secure about their |
| true. No one listened. Even worse, people making 100K | | | | jobs and life in that community. But all we hear is |
| were buying a house that cost 700K with no money | | | | America's best days are behind her and we are all |
| down with loans that guaranteed failure. 'No document' | | | | doomed. This sells news stories (like any bad news) |
| loans were really popular (where buyers were saying | | | | but it just adds to the angst of buyers and they |
| they made twice as much as they did and agreeing to | | | | become afraid to make the decision. If the market is |
| 5K a month in payments plus taxes and insurance). | | | | going to improve buyers and sellers must realize home |
| And let's not forget investors who bought homes that | | | | prices have changed and it's one of the best times to |
| they never saw in towns they couldn't even find on a | | | | buy. Or if you're a seller and you're holding out for a |
| map. In my town of North Port, Florida I have talked to | | | | better offer you need to really look at the deal you |
| people who did not even know where North Port was | | | | have and how much it is going to cost you to hold on |
| when they bought 2 or 3 houses no money down and | | | | to the house until 'better' deals come your way. |
| thought they were going to make killing on each one. | | | | The bottom line: for most people owning a home is |
| Well, they know where the city is today, that's for sure. | | | | better than renting in the long run. You must have the |
| How about the people who bought their homes in the | | | | courage to look past the cynics and gloom and doom |
| late 90's or early 2000's and saw the value of the | | | | people. You must have the patience and the faith to |
| homes double? They went from a low 30 year fixed | | | | know that the market will recover. Make the decision |
| mortgage to a higher rate 2 year ARM with cash out | | | | for yourself not letting someone else make that |
| so they could buy that new truck or a couple of | | | | decision for you. |