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When
A Dream Becomes A Nightmare
by
Carl Hampton
09/19/2007
A good education leads to a great-paying
career; job security affords the dream of
owning your own home becoming a reality.
Sounds good, doesn’t it?
Once upon a time, that was more than likely
an achievable dream. These days, however,
with housing costs devouring about 70% of an
individual’s gross income, keeping a roof
over one’s head may be the most we can
do……..never mind owning the house!
Being employed, does not offer the same
security to families that it did during our
grandparent’s era. The cost of living is
not compatible with surging home prices;
health care; property taxes; insurance;
education…….and, on and on, and on.
After you have paid the excessive amount of
income required in order to live in your own
house there is not much left over for
necessities (let alone life’s little
luxuries)!
Housing crosses the threshold of being
unaffordable when you are spending 30% or
more of your “before tax-income;” yet
almost 40% of U.S. homeowners with a
mortgage are living that reality. And, over
7 million households are spending 50% of
their gross monthly income on covering their
home loan, and basics, like utilities.
It would appear that the strain of owning
your own home is inevitable. Existing
homeowners with Adjustable Rate Mortgages (ARM’s)
should expect to see an increase in their
monthly mortgage payments, especially once
the initial fixed-rate period ends. And,
those homeowners who want to sell or
re-finance will find it more difficult to
get a loan now that the real estate market
is softening, and the mortgage industry is
plagued with problems.
Cities like Stockton, and Long Beach, in
California, and Miami and Fort Lauderdale in
Florida seem to have the highest percentage
of homeowners paying between 30% - 50% of
their incomes on housing.
With a population of 300,000 in Stockton,
California, to date there have been over
8,000 foreclosures in the past 8 months!
If you are a potential homeowner educate
yourself about the market. Learn about
adjustable rates, refinancing, and
pre-payment penalties.
Having a dream is a necessity in order to
achieve goals; home ownership should not
become a stigma attainable only by a select
few.
Don’t let your dream become a living
nightmare! Own a home; but only if you can
afford it!
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