Dennis Dahlberg is Level 4 Funding’s General Manager and he has some thoughts. “With low inventory and too many buyers, we believe the Phoenix Real Estate Market is on the verge of a new boom in real estate values,” Dahlberg explains. He has many years of flipping and fixing real estate experience so he has a very good grasp of the Phoenix Real Estate Market. He speaks wise words.
Dahlberg goes on to say, “I’ve talked to a lot of people who feel that they can ‘let their home go and rent for awhile’. Rental rates are lower than their mortgage rates, but we can save a lot of money by renting vs. paying the mortgage, and in two years,” says Dahlberg. This doesn’t seem like the best plan. Why not? You might ask.
Dahlberg has the answer. He points out that “If you let your home go, it’s actually going to be 5-7 years before your credit report looks good enough to purchase a home again. And can you really save the money? Most people will spend the money on toys. If hyper-inflation hits, like some economists predict, then you’ll be priced out of the market. Do you want to take the chance? Keep your home, do a HARP 2 Mortgage modification, and hang on.”
Remember that even though rental rates are lower than their mortgage rates, it doesn’t mean that letting your house go is the best option. Let us repeat that it will be 5-7 years before your credit report looks good enough to purchase a home again and by that time, it may be too late. Especially if hyper-inflation hits. Some predict that at this rate, in 5-7 years, it will cost $10 to buy a loaf of bread. Gasoline will cost $25/gallon. And the average starter home price will be $600,000.
That is a chance Dahlberg doesn’t think many should take, especially if they have a family. Keep your home and do a HARP 2 Mortgage modification. It will be worth it.