Does Buying a Home Really Make Sense?

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For Christmas, I received a card from the real estate agent my husband and I dealt with when we moved into our rental apartment. She had written on the card: “If you don’t renew your lease – are you ready to purchase a home?” While I commend President Obama for taking a step against the banks and powerhouse CEO’s of the financial world, it’s not just the big guns we have to go against if we want to avoid another financial crisis. Everyone around us – from real estate agents to loan officers to banks, family and even internet news articles – the human being is constantly being told that buying a home is the American dream. While we may find a real estate agent that can find some amazing homes for us, in reality, my husband and I know we can’t afford it. Between property taxes, PMI insurance, earthquake and property insurance, HOA fees, property upgrades and the mortgage payment itself – we would be in debt before we even signed on the dotted line. The current mortgage crisis could have been averted if the buyer was well informed and if the banks and real estate agents weren’t worried about making numbers and commissions. It could have been averted if knowledge was placed in the hands of the people instead of in the people at the real estate offices, the banks and the construction companies. I have outlined three things that the common borrower, investor and bank should do.

In order to take steps to avert any additional foreclosure crises, there needs to be knowledge placed in the hands of the borrower. Approximately a month ago, my husband and I found a loft online that we have been eyeing here and there for about six months. We calculated that we would need down payment assistance if we were to buy this loft. That is ...

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...le about different loan programs out there and to learn what ones work best for their lifestyle before talking to a bank. Additionally, banks and real estate agents have to learn it’s not just about the bottom line or about placing a borrower into a loan program that they are not qualified for or barely qualify to begin with. Bonuses based on how long the loan stays out of default could be a new incentive for banks instead of worrying how long it took for a property to move from the auction date all the way to close of escrow. Many future foreclosures can be avoided if certain precautions are taken. However, the foreclosures of 2008 and 2009 were also a causality of businesses failing and many people losing their jobs. Unfortunately, if that trend continues, there will be nothing to do to stop the foreclosure crisis from deepening and continuing for years to come.

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