The Pros And Cons Of The Foreclosure Crisis

1295 Words 6 Pages
In a time of financial crisis, more specifically post foreclosure crisis, struggling individuals who are either unemployed, have low income, or are in the process of recovering from bad credit, are pondering about ways they can leave their current checkered state and attempt to re-enter the world of home ownership. In addition to getting hit by the foreclosure crisis, according to Les Christie from CNNMoney, some ex-homeowners who were in the process of rebuilding their credit score got hit again by their lenders who have decided to seek and collect foreclosure debt, disallowing the ex-homeowners from fully recovering. For example, Ben McLarin from Florida had divorced his wife and, unable to keep up with the payments for the house, had to …show more content…
In following with the rent-to-own option, one must know that renting is still quite costly, but not as extreme as buying a house straightaway. Renting a house is cheap and it costs thousands of dollars. so with that said, a “boomerang buyer” just coming back from the foreclosure crisis, keeping in mind that they are still in a lot of debt and may not even have a job, will find it difficult to accumulate money for rent. From here it will just follow the domino effect, for when the renter cannot find the money to pay the rent on time, then that will worsen their credit score, show lenders that they make little to no income, and with insufficient down payment, cannot purchase the house. In addition to that, with the renter having no money, they would not be able to make any repairs on the house, as it is their responsibility as the renter to do …show more content…
The first choice would be renting-to-own, and the second would be to stay with an existing family member for some period of time. The rent-to-own option is the better route to choose, for the “boomerang buyers” can then have the time and ability to repair credit history, which in turn will allow for lenders to invest in the customer when desiring to go “all in” on another mortgage, acquire a job and generate income. Seeing that the prices of houses are slightly increasing, but the interest rates are low, between three to four percent, these potential “boomerang buyers” can lock into another mortgage before the interest rates increase. These buyers would benefit most from the rent-to-own option because, depending on employment, income, and credit score, a better interest rate will be offered. These victims of the foreclosure crisis need not to fear as these options are open for them to recover and prepare for committing to another mortgage, slowly but

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