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Sometimes buying a home may lead to need for bankruptcy

The American Dream was once said to be having the perfect home and the white picket fence. In today's world, however, the choice to purchase a home may lead to compounding future debt problems and may cause the consumer to research the options provided by a bankruptcy. Washington residents may choose to consider their own financial well-being before deciding to pursue a mortgage loan.

Homeownership was once a sign of economic stability. Now, with the uncertainty that has plagued both the job market as well as the housing crisis of several years ago, many people are approaching homeownership with greater caution. There are signs that can indicate whether it is a sound decision to purchase a home. One of these is the price of the property relative to its value.

Other indications that it may not be the best time to buy is when interest rates for a mortgage are going up or if the buyer does not have at least 20 percent for a down payment. Buying with less cash means that there is less equity from the start. Also, a smaller initial payment will increase the overall cost for the mortgage because the loan will include mortgage insurance costs. One other ominous reason is when economists are seeing signs that another crash is on the horizon. It may be better to wait until a crash has happened and the home prices have fallen.

Owning one's own home is a dream for many in Washington and elsewhere in the country. However, the decision to take on a mortgage loan is not one to consider lightly, as this debt could result in a significant burden in the event the borrower were to suffer a serious financial set-back. If a family finds that they are unable to support a crippling debt, they may research the benefits that a Chapter 13 bankruptcy filing may supply, possibly by allowing them to enter into a more manageable payment plan.

Source: debtconsolidationusa.com, "Here's The Truth: Buying A House Is Not Always A Good Investment", Lizzy Bale, July 23, 2014

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