So your house is worth less then you paid for it. Maybe the value has dropped thirty percent or more. Are you thinking of just walking away from it because you feel you are just wasting money?If that seems like a silly question to you, it’s surprising to me how many people are actually saying that to me. When they pose that question, I ask them why they bought a home. Did they buy the home to live in or to make a fast buck? I can’t seem to get a straight answer other then the value of their home has depreciated. So here’s what I think:
History has shown that real estate goes up and down. We are in a down cycle right now. In the 1980’s people were saying the same thing to me. I’m going to bail out of my house, it’s worth less then I paid for it. Well, houses are worth more now than they were in the 80’s. Prices will increase in the near future. So here are some reasons to stay in your home. Pride of Ownership This means you can paint the walls any color you like, attach permanent fixtures and decorate according to your taste. Home ownership gives you and your family a sense of stability and security. Appreciation While this may sound silly with the real estate market decreasing in value at the present in real estate has its cycles. Long term it will increase in value, that’s a given. Why do you think so many investors are buying homes now? They realize this is a buying opportunity of a life time. They are there to make money. Holding on to your house will make you money in the long run in my opinion. If you walk away from your home now, you wouldn’t be able to buy another one for three to five years. Back to renting and your credit score drops like a rock.
So my advice to you is, even if your house is worth less then you paid for it, so what, you have a place of your own to live in. Values of real estate will go up and it’s far better to have a place to call your own then it is to rent.