Some will say that when you buy a house you will find a way to make it work. Recent foreclosure numbers might hint that isn’t enough.
I have suggested to many buyers that they start immediately taking the difference between their rent and expected mortgage and put it in a savings account. For the very bold they should add another 4% of the that expected payment and put it into the savings account as well. While this may not predict your success in owning a home it is a realization of what you will have left over every month.
Some lifetime renters will say they are better off. They don’t have to deal with home repairs or the up and down of the real estate market. They have flexibility if they have rotten neighbors.
Though there are still 0% down loans, FHA is talking about raising the minimum downpayment and lowering the amount that they seller can contribute to the buyer’s closing cost. Downpayment is not the only factor in a loan failing but if there is more skin in the game then maybe the buyer will think twice about the ability to pay and will work harder to make it work.
Foreclosures will always be there because life has it’s unexpected turns. Renting is flexible but the owner can decide to sell and forcing the renter to move.
This post was inspired by LifeHacker and My Life ROI
