Over the last four years we’ve seen homeowners in Orange County being faced with tough decisions due to the economic crisis. Many homeowners have had to choose methods like loan modification to stay in their homes while others have had to choose short sale, foreclosure or bankruptcy to get out from under their homes after their mortgage has become distressed or became underwater.
The sad thing about the state of the Orange County real estate market and the California real estate market as a whole is that many homeowners could have avoided the pain financial pain that they went through if they had taken the steps to become a more financially responsible homeowner from the very first day that they moved into their home.
The Reality Of Home Ownership
The first step to becoming a financially responsible homeowner is to realize that home prices will go up and they will go down. An appreciation of 15% or more, in a homes value, over time is completely normal but appreciation like we saw in 2005 won’t last forever. Every homeowner who buys a home should base their decision to buy based on the freedom, flexibility and financial security that comes from owning a home first because, they will be ready to weather the rises and falls in the real estate market since they didn’t just but a home for an investment.
During 2004-2006 many homeowners made the mistake of using their home equity for things like taking vacations or living expenses and many of those same homeowners kept refinancing their homes again and again to cover those expenses instead of living within their means.
Build A Reserve
The most important thing that any homeowner can do is build a cash reserve that they can tap into during times of financial crisis and enable them to continue paying their mortgage if they lose their jobs or become unable to work due to a medical crisis.
To learn more about how you can become a more financially responsible homeowner, contact the team at Fred Sed & Associates today at (949) 272-0125 or complete the contact information below and we will get back to you ASAP.