Process Case

Today I will explain how the process of the purchase of my first home was. Back in 2005 I had started working on Real Estate as a financial analyst. I started making good amount of money and at an early age of 24 decided to make my first big investment, purchase my brand new home. Being young you tend to make big mistakes, especially if you are a first time home buyer. I knew I could sustain the mortgage payment without a problem. But once again being young, making a decent amount of money I wanted to eat the whole world. A month after I purchase my home, I went to a dealership and purchase a brand new SUV. Once again being young and without experience I thought I was going to be able to pay for all expenses. Never took in consideration other factors; for example and the most important, income drop.

Then 2007 came in. The Real Estate industry started slowing down, and with that income as well. The big pay checks were reducing to half. However my mortgage payment and automobile's payment were still the same. My reserves that had saved up in my bank were dropping as well. By the middle of the year of 2007 the situation was not getting better, it was getting worse. People had no more equity on their homes and refinancing was out of the way. Purchasing homes also started to slow down. By the beginning of 2008 many Real Estate offices were starting to close down, imagine why. People started to default on their mortgage payment and with that many of them lost their homes. Sales prices on homes that were selling back in 2005 and 2006 for around 300k were now selling for 200k, a 100k difference. My home which I purchase for 315k was now worth 210k. I decided to let go of the home and SUV; I could no longer afford to make those kinds of payments. Meanwhile I purchase another home but for a cheaper price.

If had taken in consideration the risk factor I probably would have not purchase the SUV. My home was something I need it but it was one of those thing