The “Foreclosure Crisis” What did we learn from it? Should I purchase my home using cash or should I go with financing. I think the foreclosure crisis put people in a survival mode and they realized housing is basically shelter from the elements of nature: rain, snow, sleet ice the sun etc. So, after wasting thousands of dollars on 30 year mortgages to watch our equity and homes disappear overnight how much money are we willing to spend the second time around on descent housing without breaking the bank. Even better, without having to go to the bank. The banks are great partners if the deals are structured in a way that we might be able to win. Going into a mortgage with a 30 year note in an economy where companies are redesigning **[fancy word for laying off]** the organization every 3 to 5 years, may not be such a good ideal. How do we start this journey to affordable housing. Lets look at some practical options.
I read an article written on August 18, 2015 by Chris Mathews titled, “Young people can afford homes, they just don’t want to be homeowners.” In that article he stated, “for an unmarried person who hasn’t settled down or found a long-term career, homeownership doesn’t make a lot of sense.” I somewhat agree. However, everyone will at some point need a roof over their heads. I would encourage every human being on the planet who is of working age to learn to save at least 25% to $28% percent of their income for present and long-term housing expenses. What you decide to do with the remaining 72% to 75% is up to you. If you want to rent a place until you find a long-term career or long-term partner to contribute to the purchase of a house it is totally up to you. In the event of an emergency you will have at least a decent amount of savings to approach a bank in true partnership to discuss obtaining a mortgage on a home purchase. The only problem with renting, is in the event of a layoff, natural disaster or any other catastrophic condition you have no where to go and no amount of cash saved to put down on a house which can leave you jobless and homeless. Saving $375 every two weeks toward your housing expenses will net you $27,000 in 3 years or 36 months. This is a respectable down payment on the purchase of a home that cost $120k. The next questions is how long are you going to take out the note? This is where my vision gets cloudy. No one can predict what will happen tomorrow. I can not tell you that I can agree to terms of the note for 15 years because I don’t know when or if my financial situation will change. At best you are going to make an educate guest of what you think you can pay based on your current financial situation. The key is once you have at least amassed $27,000 dollars there is a lot you can do in real estate as it pertains to buying a home. The millennials are in a great place to start thinking differently. They can take the 27,000 and purchase a foreclosure and live in it without the heavy debt of housing payments. They can continue to invest there $375 every two weeks into their housing account and in another 3 years or 36 months, they have another $27,000 saved plus a paid for home which hopefully has gone up in value. They key is to think differently about housing you will always need somewhere to stay. A fourth of your income for life should be committed to your housing. Once you have acquired some savings and negotiated a few deals you will never look at housing the same way.
I am personally declaring it the year of the Jubilee for myself. Leviticus 25: 1-4, 8-10. “You shall thus consecrate the fiftieth year and proclaim a release through the land to all its inhabitants. It shall be a jubilee for you.” I have lost enough during the early years of the foreclosure crisis that if they would return land and possession back to me I would never have to work again. The bible describes a period of time most people have never heard of the: Jubilee year… The proclamation of a fiftieth “liberty” year occurs on one of God’s annual feast days known as the Day of Atonement. I don’t know when it is, but I wish it would hurry up!:)