The end of the investment of home ownership by Tony Green

People purchased homes before the housing market crash not only with intention of having a place to live but with the goal of making an investment in their future.  The reality of renting an apartment versus owning a home meant the payment being spent on rent on a monthly basis went down the tube never to be seen again.  In the past, a symbol of success was burning the title of your home, which you now owned after the last payment had been deposited by the mortgage company.

Fast forward to today and the situation is drastically different. In a time of high unemployment and limited access to credit with the lowering of property values to the point where the amount on the loan is in excess of its value has turned the monthly mortgage payment into a financial black hole.

Image of beautiful  home

In the event you are unemployed the result is you are between a rock and a hard place since if a person cannot show a regular salary coming it is not possible to qualify for a modification on your loan. More ever if a short sale was attempted to avoid foreclosure and the house sold at a amount less than the value of the property the capital gains tax would transfer you mortgage debt to the IRS assuming the tax break for underwater properties would not be reinstated at the end of the year in the same fashion as the Bush era tax cuts.

The prospects of improvement sooner than later are slim which has caused me to consider moving back to an apartment. This will ensure I understand what payment I will owe and which won’t adjust arbitrarily dependent on some obscure formula for the interest rate. At least, you know what your rent money goes away for and there would be no need to think about the other painful occurrences such as foreclosures, short selling, and re-modifications, etc. Just like an apartment.  How’s that for full circle?