Back to Main Page
Housing Market:
Sell, Buy, or Stay the Course?
By Ellen Corsi
The housing market is a loaded issue that everyone is talking about, and feeling the pressure of lowering housing values and home equity, adjustable rate mortgage payments rising and a higher rate of foreclosure. Depending upon your individual housing situation, what is a person to do about this?
Those who have stayed conservative with their housing costs and fixed mortgage, are faring better than anyone at this point. By staying within their housing budget, and having financed using a fixed mortgage rate, even if your home’s value has been lowering in the last year or so, your monthly payments have stayed the same, so you don’t have the worry of not being able to afford your house payment. You should be able to ride this housing dilemma out and recoup your home value over time.
It seems that maybe we are, instead, in a correction mode of what real property values are, and the market is adjusting itself, such as the stock market. It’s hard to say at this point what will happen, however, if you are in a housing dilemma right now, you need to understand your choices at this point and figure what is the best way to rectify it.
Here’s one scenario that was offered to me regarding a certain housing dilemma:
Bill and Amy purchased a home in 2005 for $1 million. If they were to sell the house now, they would only get $750,000.00. They had an adjustable rate mortgage which used to cost them $5,500.00 per month. Now it costs $10,000.00 per month. They owe $800,000.00 on the remaining mortgage. Should they sell now for $750,000.00 and pay $50,000.00 from their savings to pay off the mortgage? You see, they can rent a place for $3,000.00 per month and save $7,000.00 per month. It would then take 7 months to recoup that $50,000.00 they had to take from their savings. Or, should they stay in their house and hope for the best?
Here are some questions that Bill and Amy should answer to help them decide what to do:
- Does job stability factor into this scenario? For instance, is there a chance that they may need to sell the house if one of them is relocated in the next 6 to 12 months?
- When Bill and Amy purchased the house, was it within the normally recommended housing budget of 25% of total salary, or were they overextending themselves at that time?
- What is their tax situation? Is it better for them to stay the course and use their mortgage interest to pay less in taxes per year?
- If they decided to sell the house and rent instead, how will it affect their tax situation? Would it be beneficial or detrimental to their overall income per year without the tax cushion of mortgage interest?
- Are Bill and Amy having trouble paying the $10,000.00 per month mortgage expense right now?
- If so, is foreclosure on their house inevitable without trying to sell or refinance it?
- Depending upon Bill and Amy’s answers to the previous questions, would it be wiser to sell the home and buy a more moderately priced home now (with a fixed rate mortgage) so that they will still retain their mortgage interest each year?
- Do you think Bill and Amy will sign off on another adjustable rate mortgage in the future?
- If Bill and Amy wait it out, and the housing market takes another 2 years to bottom out, and they end up wanting to sell, how much more will they lose on the value of their house? Or will the loss, be more comparable to the value right now?
- If Bill and Amy do not need to move, and are planning on retiring and staying in their house for the next 25 years, does it matter if their house value keeps fluctuating? When you retire, do you really need a lot of home equity?
As you can see, just by this one scenario, there are many common questions that homeowners need to ask themselves before making a decision regarding their homes. There are so many different types of loans out there, such as Jumbos, with or without balloons, different A.R.M. financing lengths, etc. You really need to look at your specific situation and answer these questions to find the solution that is right for you.
It is always a good idea to have a financial advisor and a realtor to take you through what they are seeing within the market to give you some additional insight before any final decisions are made.
If you are finding yourself in the midst of this housing dilemma, take heart. There are many people who are in the same situation right now. You just need to find your best solution. |
Remember!
Your degree approval from Almeda University stays on file indefinitely.
You may proceed at any time.
However, even though we do not anticipate an increase in fees,
keep in mind that any fees quoted are guaranteed for 30 calendar days only. If you respond after this time period, you will be responsible for any additional fees that may be in effect.
On a budget?
Almeda offers a 0% finance plan.
Click here for more information!
 Calendar of Events
New Classes Being Added
Proposed Development Schedule is subject to change without notice.
These are estimated dates of completion, and course availability is
not guaranteed.
March 2008
Communicate with Power
PowerPoint 2007
Project Management from a People Perspective
SharePoint 2007
Internet Marketing
June 2008
Outlook 2007
Project 2007
Click the Products & Pricing page and save today! |
| -----------------------------------------------------------
Almeda University announces partnership with Fast Track Resumes
Fast Track Resumes was launched in 1997 by Kim Little, JCTC. Kim has fifteen years of experience providing high-quality, effective resumes for clients in all industries and all levels including new grads, professionals in transition and C-Level executives. She is among a small percentage of professional resume writers across the country who has earned the International Job and Career Transition Coach Certification. This ensures that not only will her executive clients receive an outstanding resume, but also the support necessary for clients to achieve both professional success and personal satisfaction.
Kim is also an active member of numerous professional career and resume associations which not only abide by a strict code of business ethics but provide ongoing insight into the latest, most effective resume writing strategies for diverse client needs. Her work has been published in over 10 Resume/Cover Letter books; she serves as career/resume expert for several job boards and has established a strong reputation as one of today’s leading resume authorities.
Combining a strong business management and recruiting background with her writing talents and personalized service, Kim offers all clients the opportunity to land quality interviews through resumes that not only capture employer attention but showcase each candidate to their maximum potential.
Click here to see what Fast Track Resumes can do for you
-----------------------------------------------------------
Testimonials
"I have received my package, thank you. After opening the box and seeing my Degree, I felt a sudden change. I felt like I was growing taller, I became more secure and articulate with a different kind of confidence. It's hard to explain. I just know that I am so very excited and possess such motivation to do greater things. My entire demeanor, attitude and outlook on life was revamped.
Thank you so very much for my beautiful plaque, my T-Shirt and everything else. I especially like the presentation, very classy. Very nice plaque and unique wallet copy. You are all phenomenal! Please thank everyone who has helped to make this possible."
D.B-B |
