It’s a tough real estate market nowadays in this horrible economic situation we have found ourselves in. Home prices have plunged throughout the country and are still falling in places. For those who bought when the market was overvalued a few years ago, times are especially tough. Mortgages were given to any Tom, Dick or Harry and they had ridiculous terms which left those mortgage holders in a bad way.

In Southern California where I reside, the prices of homes five years ago were incredible and the market for buyers was like taking candy from babies, a lot of candy. This is the time I moved across the country to Los Angeles and had my heart set on buying a home. I was always told buying was better than renting no matter the conditions and I believed it.

I knew I couldn’t afford the place I ended up with. But, they gave me the mortgage so maybe they knew something I didn’t. My house was overpriced and my mortgage was way too pricey and not a good deal at that. I had little equity and no more coming anytime soon. Then, my wife and I had our second daughter and my wife left her job to stay home. We lost her full-time salary and were heading up-creek further without a paddle. We were literally sitting on collapsing furniture with home space heaters at our feet because we couldn’t afford to repair anything when it broke.

As was bound to happen, the housing market and economy collapsed. Our home devalued quickly but our mortgage payments did not. Now, not only could we not afford the home, we couldn’t sell it at a profit and barely sell it at a loss. We went through a bankruptcy to get rid of our debt and decided that to free ourselves up from all financial burdens, we would sell the home through a short sale if we could.

We are currently doing much better renting a home. I hate that we went through what we did but, had we not, we may not have learned some valuable lessons.

I would buy an income property, something that I could put a renter in that would cover my mortgage. I would buy a slight fixer-upper and spruce it up with some cheap home decor accents and maybe a coat of paint. But, most importantly, I would buy something below my price range, taking the renter into consideration and get a mortgage that earned equity and had a good rate either fixed or with a long arm.

This way, I would not have to worry about covering mortgage every month. Plus, my home would have real value and, I could hang on to it long enough to make it a truly valuable resale property, no matter the market conditions.

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This entry was posted on Thursday, March 11th, 2010 at 12:47 pm and is filed under ARM Mortagage, Bankruptcy, Consolodate Mortgage, Credit, Credit report, Debt Consolidation, Debt Relief, Familiy Banking, Hotels, Loans, Mortgage, Personal finance, Reduce Debt, Structured Settlements, Travel Offers, USA Accomodation, Uncategorized, Wealth Building, free 3 credit report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.