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Wednesday, September 22, 2010 3:16:06 AM
There have been several reasons tossed around for the crisis in the real estate market happening now. Many individuals point the finger at the banks and mortgage companies while some point the finger at the people buying homes. Somewhere in between is probably the real story. Many a homebuyer purchases more of a house than their pocketbook can afford. Up till the foreclosure problem banks and mortgage companies have been too generous in their lending too. We will take a closer look at the reason for this real estate crisis.
Home buyers have long bought big when it comes to homes. Sometimes so big that they get themselves in over their heads with their mortgage payments. If they could only see the problems that could arise in the future they would think twice before having such mortgage payments to deal with. Some home buyers have made huge mistakes by grabbing mortgage loans that have rates that vary. They start off low but rise and this makes the payments often too high to handle. Also the taxes and insurance for the house can rise too compounding the problem.
New home shoppers should inform themselves on all the loans available before buying a house. They need a definite idea of what monthly mortgage payment they should pay according to what they make paycheck wise. Most new home shoppers just plain want too expensive of homes for what they make salary wise.
There are even those that buy large houses that have big kitchens and plenty of space. But the way some of them get their loans is by out right lying about their income on their applications for their loans. Then they wind up with more than they can handle and wind up losing the house. Unscrupulous lenders even seek out people (with bad credit or low income) to loan money to knowing that it will all go bust and they will have to repossess the house. Many states have voted and passed legislation to prohibit this now. More states need to do this though.
There was a special house in foreclosure on the news the other night. It was a house donated to a family that could not afford to fix their old one. This type of house was so spacious and nice that most people could exist a lifetime in it. But this family decided to cash in and take out several loans against the house that they now cannot pay back. When this house was being raised it was on the television and so was the family's financial situation. Too bad whoever loaned them the money was not watching that night surely they would not have loaned them that huge of a sum.
Did this group stop to think that this family would abuse having this house? Maybe they need to research into how responsible people are before giving away another house. There are certainly a lot of people that could use this kind of help today that would take better care of the house so nicely given to them.
Only a few of the reasons for the real estate crisis have been mentioned so far. An additional problem that happens is the homeowners go through situations that cause hardships as far as being able to pay the bills. Homeowners sometimes lose employment and this makes them fall behind in their bills. This also creates the situation that leads some to lose their homes.
There are also incidents that can happen where people become physically injured and cannot participate in their jobs. This causes money troubles sometimes very severe ones. People not only have medical bills mount up but their regular bills to the point that they try leaving their house payments lapse trying to take care of everything. This lapse causes major problems that can lead to a house being foreclosed on and sometimes worse.
When enough of the houses that were foreclosed on get sold and the new ones start selling for better prices this real estate problem will slowly subside. Maybe the proper changes will occur to keep something like these problems from happening anymore. It would be a travesty for this problem to return after we do get it resolved.
Greg Beaty gives Real Estate information for purchaseers and sellers. Don't purchase or sell without visiting this Blog or it could cost you money: florida real estateThis article, the best article ever, kindly provided by UberArticles.com
