For most people, it is difficult to look past today’s problems towards the future. The current real estate market is creating such a challenge for plenty of people.
Homer Simpson is famous for yelling, Ahh! We’re all gonna die! Run! at the first sign of any crisis. From lenders to real estate gurus to the media, this is pretty much the same thing you hear about the current real estate market. There is no denying it is bad, but there is also no denying it will bounce back. The key is to keep your eye on this future bounce back.
To buy a home, you must have good credit. Okay, you could get away with iffy credit the last few years. With the current mortgage mess, those days are over. You are going to need good credit for the foreseeable future. Foreclosures are not good for your credit score nor are short sales.
Before you walk away from that home, you need to really think about the future implications. Yes, you may be upside down now, but so what? Is it really worth ruining your home buying ability for the next seven to 10 years? No! This is particularly true when you consider the fact the value of your home will bounce back in the near future. It might not be till 2009 or 2010, but it will come back.
If you are having problems, your current goal should be to survive this downturn. This may mean a bit of pain and a lot of skimping on funds. If you tough it out for a few years, you are going to really be happy when things bounce back. So, how exactly do you such it up? Well, there are a few strategies.
The first strategy is really a two part approach. The first step is to rent out a room or two. Although this sounds horrific at first glance, room rentals are pricey and can make a huge difference when it comes to meeting your monthly financial nut. The second step is to rent out the entire home and move into a place that costs less. You might not be able to cover your financial nut with the rental, but you should be able to make it up by renting a cheap place.
The second strategy is one that buys time. Remember, you are trying to survive for a year or two. Call your lender and ask for a forbearance period on payments. The lender will often give you three to six months. During this period, save every penny you have and apply it to future monthly payments. By taking this approach, you should be able to cover 6 to 12 months, which is a nice chunk of time.
Are any of these strategies comfortable and ideal? Of course not. They aren’t intended to be. Instead, they are designed to get you through an ice cold real estate market. Don’t kill your credit. Tough out the next year or so and you’ll reap the benefits.
About the Author
Raynor James writes about issues surrounding real estate property listings for FSBOAmerica.org where you can list your property for sale by owner for free for 1 month.
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