Home Loan Focus

There are a lot of good reasons to buy a home, but in this down market, it is important to examine some of the bad reasoning that sometimes influences those buying a home.

“It’s a good investment!”

Well, that may be the case sometimes, but primarily a house is a place to live. Granted, as an investment, a home can go either way especially nowadays. Take a moment to consider what happened to folks in Boston, Dallas and Detroit during the late 80’s and early 90’s. Many homes purchased in that time faced nearly a 20% drop in value that took almost ten years to recover from.

In addition to potential risk, home appreciation doesn’t add up as quickly as other investments may, think of them as weight loss pills; give it time. More often than not, homeowners who are viewing their home as an investment very seldom take into account the amount of money they are putting in to raise the value. Sometimes homeowners put in more than they could ever get out of the market and experience the dread of “diminishing returns”.

Source: MSN.com

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