Home Renting vs. Buying

Oink — Tue, 10 Mar 2009 19:10:28 +0000

Is The American Dream A Good Idea Right Now?

I guess almost everybody thinks about the day when they can buy their first home, or if a family already owns a home, they think about upgrading to a different home. But right now many people are looking at the realities of home ownership and asking themselves if it is really a good idea. Sure, people will argue that paying rent is just like throwing away money. You pay, get a place to live, and then next month, you pay again. But I would argue that people always pay rent, even when they own a home.

How Do Homeowners Pay Rent?

Taxes – If you own a home, you probably pay a couple of percentage points, or more, of your home value in taxes every year.
Repairs – When you rent, you call the landlord to fix most things. When you own a home, you have to fix things yourself.
Interest on A Mortgage – Talk about money down the drain! If you carry a home mortgage, and most homeowners do, a large chunk of your payment goes for interest.
Home Value – Traditionally, homeowners could count on an increase in the value of their home. These days, that home value could decrease. If a home has to be sold, unhappy homeowners may actually have to write a check in order to close a deal.
Homeowner’s Insurance Premiums – Sure, renters buy renters insurance, but it is really cheap! Homeowners insurance costs more.

Do I Own or Rent My Home?

Now let me be honest. There are also advantages to owning a home, and I must tell you that I did purchase a modest home after renting for a while. I got tired of waiting for the landlord to do a mediocre job of fixing things, and not being able to tile or paint the way I wanted to. But sometimes, especially after paying for large repair bills, I long for the days when I could just call the landlord or move when things were not right with my home!

And I did buy a modest home because I wanted to make sure I had money left over to pay for things like taxes and repairs. But believe me, I often succumb to the American dream of moving up!

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Worried About Layoffs?

Oink — Tue, 09 Sep 2008 02:46:21 +0000

We haven’t been getting very good news about employment in the US lately. And of course, all economic news, with the bailout of the mortgage giants, is pretty grim. In fact, home foreclosures hit a record in the 3rd quarter of this year. And if you think that the bailout will help the situation, you might want to read this article: who does the mortgage giant bailout help?

Prepare for an Income Loss

Do home mortgage defaults and layoffs have anything to do with each other? Well, according to the much maligned Freddie Mac, unemployment or income loss is the leading cause of mortgage default. In an ideal world, we would all have 6 months of income stashed in a bank account in case of an income loss. But lately, with rising gas and food prices, most of us have had to dig into that savings account.

So what can you do? Well many people can qualify for a supplemental job loss protection program. Instead of a loan company financed mortgage protection plan, which only pays the mortgage company, you can get a plan that actually pays you cash if you are layed off. I think that giving the consumer the choice of how to allocate the cash, rather than the loan company, is a better deal to protect a family’s home, credit, and finances.

Learn more about Job Loss Payment Protection Here.