Rent my house, please

The American Dream is to own your own home. Usually, the bank owns the home and the homeowner pays the bank for 30 years or so until the mortgage is paid off. The homeowner reaps the benefits of fixed housing costs and rising equity in their home. For many folks, their home is not only a place to live, it is also their biggest investment.

A few years ago, housing prices in the US went skyrocketing. Many people bought homes in this time period that were high priced relative to their income. They financed these homes with adjustable rate mortgages with very loose income guidelines. All you needed was a pulse and a job to get a mortgage! Now these adjustable rate mortgages are adjusting up which means the payments are going up; WAY UP!

This has left many homeowners in a situation where they can't afford their mortgage payments. Foreclosures and repossessions are becoming commonplace and many people will be put out of their homes.

One solution to this problem is the rise of sell house rent back programs. Basically a homeowner facing escalating costs can stop repossessions by selling their home to a property management company and renting it back at a (hopefully) more affordable payment. They can also pull out any equity in the house and stay in their home. Not exactly the American Dream, but at least the homeowner doesn't get into foreclosure and they are able to stay in their home. If you can find a sell house rent it back program, it should be a last resort, but it beats getting put out on the street.

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1 comment:

Kuanyin Moi said...

Very interesting info!

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