Let’s Think Big Picture, Then Zoom In.
The ‘American Dream’…conjure all the images you can…it probably includes ownership of a house, a two-stall garage, 1.5 children…”I got it myself and it’s all mine” type of attitude. Then the man pats his boot straps with pride.
Maybe you have other ideas…read this interesting article on Nationwide Property Values.
Is ownership actually economically better or it the image we prefer?
The word on the street is renting is more expensive than a monthly mortgage payment. Read this article on Grand Rapids Property Value.
The housing collapse of 2008 is the ‘American Nightmare’ we’d rather forget.
In 2006 housing prices steadily dropped. You may have bought a house last year in a 30 year fixed rate mortgage, but the next year your couldn’t sell your house and pay the mortgage BACK. That’s what we call – underwater. By 2008 the prices dropped some more. When households couldn’t pay that already underwater mortgage payment – they went into default and foreclosure…
HARP was born…Home Affordable Refinance Program…in 2009. Using Fannie Mae and Freddie Mac people who were in default, about to lose their homes could instead refinance.
People who were not able or did not take advantage of the HARP program have to live somewhere. Renting it is, sometimes through a government assistance program called section 8.
The buzzword lately is “affordable housing”, which can be a misleading name because it doesn’t mean affordable for you, but it’s housing for those who could not afford housing. Using a tax incentive program for investors to finance the construction of rental properties called the LIHTC (Low Income Housing Tax Credits)…in order to create more home for displaced people to live.
Let’s Think Micro, Here.
You! What would be best for you! Here is an interesting way to figure out how much you can afford to pay per month to hold your living space… your annual income divided by 40. If I make 20,000 a year I can afford $500 in rent.
Owning seems like the ball is in YOUR court, and you have the control. Is that true? What about the very legitimate fear that you could go underwater in a mortgage? You can sort of be responsible for your employment. Ask someone who was let go if they had control, though. You cannot set the market value of your home, either. You do not control the appraisal, although you sure can DIY, hire professionals to steadily add value…(read some tips for a greener, heavenly home here)
Owning frankly is added responsibility. The pay off for being your own property manager happens when you sell the house. The assumption is, you pay the mortgage monthly and when you are ready to sell you make a profit.
Think of this way. Someone might be paying a mortgage on the house, but renting it to you. They want to make a profit so you pay more than their mortgage.
Then there’s this hang up called credit. Which you need a great score in order to even qualify for a mortgage. Good credit repair is out there…like the Sub Prime Credit Store…if owning is your dream!
Sometimes you get lucky and the owner wants to slowly transfer ownership over to you…which is where rent to own comes in.
Not new news, but you aren’t going to make a profit on your rent. You are excited enough just to get back your security deposit. Rent to own is different because all rent you pay is coming off the principal worth of the house.
RENT TO OWN IS THE BEST OF BOTH WORLDS FOR MANY PEOPLE
It’s true that rent to own homes can be incredibly hard to find. That’s what the Ultimate Rent To Own Home Program is here, for you!