The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2016

For long-term home occupancy, owning is generally more financially favorable; however, there are strong reasons not to buy and rent instead. Considering the many benefits of home ownership, why would anyone chose to rent? It’s said that the decision to own is emotional whereas the decision to rent is financial. During the housing bubble, renting was a wise financial move because it cost twice as much to own than to rent, but now that prices are much closer to rental parity, there are fewer compelling financial reasons to rent rather than own. Between 35% and 40% of Americans chose not to buy and rent their primary residence instead. The reasons vary, but they all generally relate to commitment and finance.…[READ MORE]

Contrary to popular belief, capturing home price appreciation is not the best financial reason to own real estate. Many people want to own their homes because they believe the property will rapidly go up in value, providing them an endless stream of free money they can spend on anything they want. During the housing mania, lenders allowed anyone to finance up to 100% (or more) of the value of their property, and with "innovations" in mortgage finance, their payments would actually go down! Quite a deal. Unfortunately, those innovations proved to be less than successful, and most people who availed themselves of that free money lost their homes in foreclosure, or they barely hang on through a loan modification, probably…[READ MORE]

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