Advantages of Renting a Home Instead of Owning

Right now, home prices (especially in the U.S.) are quite low, and mortgage rates are fairly low as well. A number of foreclosures means that there are cheap homes on the market. As a result, it is really tempting to buy a home. However, in some cases it might be to your advantage to keep renting. This has occurred to me as my family faces the prospect of moving and possibly selling our house, as well as the expenses associated with paying for a flooded basement. I’m wondering if maybe we should go back to renting. Here are some of the reasons that renting is looking tempting:


 Owning a Home is Expensive


Forget about the line from real estate agents about a home being a great investment or your biggest asset. Your home is a purchase. An expensive purchase. By the time you pay interest (even though you can get a tax deduction), property taxes, maintenance costs, repair expenses, insurance and utilities, the expenses really start to add up. Even if you do sell your home for more than you paid, it may not be enough to offset the accumulated expenses associated with owning a home for decades.

Renting, on the other hand, is usually less expensive. You aren’t responsible for the repairs or maintenance costs (unless you do something you shouldn’t), renter’s insurance is much cheaper than homeowner’s insurance, and you don’t have interest or property taxes. Depending on the market you’re in, a rent payment for a decent-sized home may be a couple hundred less than a mortgage payment. Some folks like to invest the difference, hoping for a better long-term return.

Greater Flexibility

 

If you aren’t going to be an area for very long, the flexibility of renting might be attractive. Aside from having to sign a one year initial lease, renting offers the ability for you to pick up and leave if you need/want to. We had hoped to be in our current home for a longer period of time, but, like so much in life, it isn’t working out. We will probably have to move to a new town, and that means trying to sell this house. If we were renting right now, we could just offer 30 days’ notice to the landlord and leave when ready. And, because we don’t want to be landlords, we will probably have to take a loss on the home when we sell it.

Bottom Line

 

ready to buy a home, and we might not rush into it in the next place we live. While we can afford to live in the house, the responsibility of it, and the expense associated with it, can be irritating at times — especially when I think that we are likely to be moving after staying in the home for less than five years.

In the end, carefully weigh the pros and cons of buying a home versus renting it. Think about what is likely to happen in the future, and whether or not the money you put into home ownership might be better used elsewhere.

source: financialhighway.com

Mortgage delinquencies rose in second quarter, trade group says

The Mortgage Bankers Assn. says home loans with at least one missed payment but not yet in foreclosure rose to 7.58% in the second quarter from 7.4% in the first quarter.

The nation's slowly improving housing market hit another bump last quarter, with more borrowers missing payments amid continued high unemployment, a report from a trade group shows.

The Mortgage Bankers Assn., in a quarterly delinquency survey issued Thursday, said home loans with at least one missed payment but not yet in foreclosure increased in the second quarter to 7.58% of all mortgages. That's up slightly from 7.4% in the first quarter.

A separate survey from foreclosure listing firm RealtyTrac Inc. said the number of homes going into foreclosure rose 6% in July compared with a year earlier, the third straight month of year-over-year increases.

That trend reflected the fact that last year many foreclosures were on hold as banks focused on cleaning up flawed processes for seizing homes after the "robo-signing" scandals.

The Mortgage Bankers Assn. survey said the quarter-to-quarter increase in delinquencies appeared to result instead from a fundamental change: The slowing of the economy's recovery during the first half of the year.

Although in no way reversing the longer-term trend of declining delinquencies — the missed-payment rate was 8.44% a year earlier — the increase raised eyebrows at the lender group.

"It's not the direction you would want to see," Mortgage Bankers Assn. economist Michael Fratantoni said in an interview. The key determinant, he said, will be the job market, which has shown signs of improvement lately.

In a brighter sign, the percentage of loans in all stages of the foreclosure process, or at least 90 days past due, dropped to 7.31% in the second quarter from 7.44% in the first quarter and 7.85% a year earlier.

The slow decline in this "seriously delinquent" category shows that lenders are gradually working through the huge backlog of soured loans made during the housing boom, Fratantoni said.

Federal Housing Administration loans entering foreclosure were a notable exception. The percentage of loans in foreclosure soared to 4.23% in the second quarter to a record high. Foreclosure starts for FHA loans also increased to 1.53%, also a record high.

The increase was due to major lenders, particularly Bank of America Corp., starting up foreclosures on loans that had been delinquent but held up because of to the federal government's investigations into faulty foreclosure practices, said Shaun Donovan, secretary of Housing and Urban Development, which oversees the FHA.

"We had a significant period of time where Bank of America was not starting foreclosures or completing foreclosures for FHA loans," Donovan said in an interview with The Times. "What you are seeing is basically many, many months-long backlog of particularly Bank of America claims that are being submitted, and have caused artificially that rate to rise."

"It doesn't reflect an underlying trend overall for the broader portfolio," he added.

The report confirmed signs that California, once the poster child for collapsing housing markets, is generally in recovery mode.

Across the nation, 4.27% of all home loans were in the foreclosure process at the end of the second quarter, the home lenders group said. In California, 3.1% of residential mortgages were in foreclosure.

That compared with 13.7% in Florida, 7.7% in New Jersey and 6.5% in New York, all states in which foreclosures are processed through the courts, resulting in huge legal entanglements. Most foreclosures in California are processed more quickly without judicial reviews.

Fratantoni said that with home prices rising again in many California markets, more struggling homeowners are finding it possible to sell their homes rather than see them taken away in foreclosures.

source: latimes.com

David Duval FORE!!! ... closure

Golf superstar David Duval has made more than $18 million on the PGA Tour ... which is why it's pretty shocking that his Colorado mansion is in the middle of some major foreclosure drama.

According to documents obtained by TMZ, David and his wife Suzanne took out a loan for $5.9 million back in 2005 to buy a $12.35 million home in Cherry Hills Village, CO ... a suburb of Denver near Payton Manning's new home.



But the bank claims Duval has failed to make his payments ... and now it's going after the golfer's home to get it's money.

According to documents, the home will be put up for public auction on November 7 ... unless Duval can come up with the money.

We reached out to David -- so far no word back. We also called David's former agent hoping to get a comment ... but we were told the golfer has parted ways with the agency and is now representing himself.

source: tmz.com

Holsum Lofts among latest Las Vegas real estate bankruptcies

Commercial real estate bankruptcies continue to accumulate in Las Vegas — the latest two involving properties on Charleston Boulevard.

The owner of the Holsum Lofts redevelopment project at a former bakery, which has been hailed as key to the burgeoning downtown Las Vegas arts scene, filed for Chapter 11 reorganization on Thursday.

Headed by Jeffrey LaPour, the company formerly known as LaPour Grand Central LLC was sued last month in Clark County District Court by investors in its debt.

The creditors charged in the lawsuit that LaPour Grand Central had defaulted on debt of $6.46 million.

The Holsum Lofts retail and office complex has 46,505 square feet and 19 units that are leased, lawsuit records say. It’s at 231 W. and 241 W. Charleston Boulevard.

At the request of the creditors, Clark County District Court Judge Elizabeth Gonzalez on Thursday approved their request that the property be turned over to a receiver for management purposes while it’s foreclosed on — but her order may be delayed or blocked at least temporarily by the bankruptcy filing.

Under Chapter 11, businesses continue to operate while trying to restructure their debt. Creditors have a say in the process and can propose their own reorganization plan.

Separately, Charleston & 28th LLC filed for Chapter 11 reorganization on June 22 to block a threatened foreclosure.

That company is trying to restructure $2.33 million in debt backing a 7,985-square-foot, four-building shopping center at 2877 E. Charleston Blvd., east of Fremont Street.

source: lasvegassun.com

Obama urges passage of mortgage relief

WASHINGTON - US President Barack Obama on Saturday urged Congress to approve his plan to provide relief to millions of homeowners who are having trouble paying mortgages.

"In order to lower mortgage payments for millions of Americans, we need Congress to act," Obama said in his weekly radio and Internet address. "They're the ones who have to pass this plan."

The $5-10-billion plan, showcased by Obama this past week, would be financed by a portion of a fee on the most wealthy US banks.

The blueprint is intended to help borrowers who are up to date on their mortgages to refinance and take advantage of low interest rates, which could save an average of $3,000 a year.

It will simplify mortgage disclosure forms, so people can better understand the loans they take out and offer support to help those facing foreclosure to stay in their homes.

The plan also includes a government-led effort to make foreclosed properties that cannot be sold available to renters.

Obama urged people who agree with this plan to call, email or visit their representatives in Congress and demand its passage.

"Tell them to pass this plan," the president said. "Tell them to help more families keep their homes, and more neighborhoods stay vibrant and whole."

He cautioned, however, that "it will take time" for the US housing market to recover and for the economy to fully bounce back. — Agence France Presse

source: gmanetwork.com