The housing market in the U.S., and particularly in some very hard hit states, has been experiencing the long, drawn out pain of foreclosure for years. You might think a foreclosure is a pretty clear cut process. A homeowner fails to make his payments, the lender starts foreclosure proceedings and eventually takes over the home and sells it.
April 23, 2012
March 21, 2012
When Smaller is Better
Seems like the more space you have in a home, the better of are. Seems like anyone would love to have more room then they know what to do with. Think again. You might be surprised to find that many would be better off with a smaller home.
March 14, 2012
March 6, 2012
Rewards For The Fiscally Responsible
There’s been a lot of talk of bailouts for companies and individuals who are now in financial trouble due to poor financial decisions. People who took out mortgage loans they couldn’t afford are getting loan modifications. Others who used home equity loans to pay off credit cards only charge up their credit cards again are walking away from all that debt and starting fresh.
What about those who managed their money well through the crisis? There are many consumers who only purchased what they could afford, in spite of multiple offers to loan them money. They’ve seen their home values plummet and their taxes rise to foot the bill for the irresponsible spenders. Where’s the justice?
Super low interest rates present many almost unheard of opportunities, and those with good credit scores are the only people in a position to take advantage, especially on home loans. I know what you’re thinking. Borrowing is what got everybody else in trouble. You definitely shouldn’t get a loan just because it’s cheap money and you can go shopping. That would put you in the same spot as all those people who overextended themselves. But you can use this opportunity to invest strategically.
The most important step is having a clear idea in your mind about responsible vs. irresponsible borrowing. You should never borrow money for things that are going to get used up. Everyone needs groceries, cars and clothing. We like eating out, buying books and taking vacations. These are fine as long as you can afford them. Spend this month’s earnings on this month’s expenses. If you want to go on a big vacation or buy a new car, save up the money and then make the purchase. Once the money is spent on these things, it’s gone.
There are cases where borrowing money is a smart move – when what you’re buying is an investment. Most people use loans to buy houses. When you buy real estate, you expect the value to increase over time. Most of us couldn’t pay cash for a house, so the only way to invest in real estate is to borrow the capital. That’s especially true in high cost areas. Unless you’re independently wealthy, you’ll need a loan to buy Brookfield Homes in San Diego. You’re using someone else’s money to make money.
Obviously it’s critical to determine whether the investment you’re considering is wise, including interest payments on the loan. With interest rates at historic lows, many investments that would be good under different circumstances are great now.
Interest rates wouldn’t be so low if the whole economy wasn’t suffering because of the irresponsible borrowing and spending that so many indulged in. Take advantage of it, in wise ways, while it lasts. Your credit history, income and bank balance makes you one of the few that can.
February 27, 2012
How to Co-Buy a Home
Everyone wants to own their own home. Many would love to have a vacation home as well but can’t afford it on their own. Maybe it’s time to consider co-buying a home? In the past, co-buying was mainly the domain of married couples but in light of the recent economic times, many are discovering that pairing up with close relatives or even a best friend, can allow them to buy a much nicer home then they originally could.