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Archive for June, 2012

Horses escape Colorado Fires

So glad they’re getting the horses out now rather than waiting until it’s too late. If you can sponsor or take in one of these displaced animals, contact your local animal shelter for information. Photo courtesy of facebook, Equine News Today.

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Recently, I have had  a lot of calls from people who want to rent rather than buy. My first question is: “Why?” There really are several good reasons, but many renters don’t fit into any of these categories.

First, if you are only going to be living in an area for a year or two, it makes sense to rent. This is especially true if the time it takes to sell a house in that area is especially long, or if values there are currently heading down. Those in this category would likely be military or those on a special assignment for their job. It could also include those who are temproarily relocating to care for an elderly relative but plan to move back after the person is settled or passes.

Second, if you are new to an area and don’t know which neighborhood you want to settle in. If you arrive and just buy the first house that you see, you may end up in an area that is less than desireable for your family. This might mean something as simple as too long a walk to the bus, or it could progress to more serious issues such as the local drug dealer living next door. In this case, you are better off to rent for a year and then make a decision on where you want to live permanently.

Third, if you have bad credit. Naturally, this will keep you from qualifying for a loan which makes it next to impossible to buy a house. Rent the smallest, least expensive place you can stand for a year or two while you work on getting your finances in order. This is best done with the advice of a mortgage lender or broker, or a financial planner. Follow their advice, get things straightened out and check again in a year to see if you can qualify for a loan.

Fourth, if you are strapped for cash. There are multiple reasons for this, ranging from bad financial decisions to circumstances that go way beyond your control. If you don’t have enough to cover the down payment and settlement costs, then put the homebuying dream on hold for a few years while you save. One of the saddest things I see in real estate is someone living in a beautiful home who can’t afford furniture. Be patient, wait until the time is right and then buy something you can afford.

Fifth, if you are waiting for a home to sell in some other part of the country. Many times people will be transferred and move before they can secure the equity in their home through a sale. This can put them in a bind if they can’t afford to make two mortgage payments while they wait. Rent until the old house sells, then you can use the money to buy without putting yourself in a bind.

If you are not in any of these categories, perhaps you should consider purchasing a home rather than renting. There are home types for every need, from those who want to have no yard work and just a small place (condo or senior living development), to those who want a place to entertain or a big yard for the family. You may have to make some compromises, but the money you save in taxes and other fees can more than make up for the cost of the house.

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