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What To Do if You Think You Owe More Than Your House is Worth
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More people are finding themselves in the situation of being “upside down.” That is the term the housing industry uses when they owe more on a home than it is worth. Experts say this is becoming more common with the current affairs of our economy and latest trends in home sales. Unfortunately, most people don’t know how to remedy this problem and are left holding on to a house that isn’t worth what they have put into it. If You Do Not Need to Sell Analysts and experts are now advising people that if it isn’t necessary for them to sell, then they should stay in the house and pay down the principal. Try paying more than the minimum monthly payment. Experts agree that the market always bounces back. If you choose to sell later, you will have built in equity by that time. Making Up the Difference When You Owe More Than Your House is Worth What if you do need to sell the home now? In that case, you may have to make up the difference. This is one of the least recommended options for people faced with a house that is worth less than they owe. However, some people may fee left without a choice. The Short Sale Option When You Owe More Than Your House is Worth A short sale is a viable option for anyone owing more than their house is worth. In the simplest terms, a short sale is when the mortgage company attempts to sell the house for less than what you owe. If you are trying to avoid foreclosure, this is a possibility worth exploring. However, most realty companies will ask that your house stay on the market for at least 90 days before discussing a short sale. You should also be prepared to prove that a short sale is the only option. Whichever option you choose, make sure your home is properly appraised first. You should thoroughly check it over and make comparisons with the current market. You may be surprised at the worth of your home. Having your home re-evaluated could mean the difference between losing your shirt and comfortably living out your days. Leave Comment |
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Are Home Sales Really on the Rise in the U.S. (according to the National Association of Realtors)
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Mixed messages about the housing market are everywhere. In some areas, you hear that home sales are on the rise, while in other areas you hear the opposite. Is it any wonder that homebuyers and sellers do not really have a firm grasp on what to believe when it comes to housing market trends? Whether you are looking to buy or sell a home in the coming months makes no difference. What does matter is how to decipher whether or not home sales are really rising. If you are looking to buy, you will find no shortage of homes from which to choose. In part, this is because sellers are not looking to drop prices on their homes any time soon. How that affects homebuyers really depends on what they can afford and where they want to live. Location Has a Hand in Home Sales According to the National Association of Realtors (NAR), location has much to do with where you will find the most luck buying a home. The current economic situation has left many people opting to nest in their homes instead of making a move. In addition, areas where home sales are more stagnant than others have also taken a hit from job losses. People in places like the Midwest are more likely to hold fast to their homes than take a gamble on the housing market, so says financial experts and home buying analysts. However, the northeast part of the U.S. has seen home sales continue to climb over the last six months. As the National Association of Realtors announced that current success could remain through the New Year, but other experts are hesitant to agree with the reports. Among some of the more shocking news that comes out of the housing industry is the willingness of homebuilders to cut prices in the hopes of getting rid of many unsold new homes. The price cut has a slight effect on home sales in areas considered in danger of remaining in a slump. One thing that the NAR and other experts can agree on is the hope for current home sales to mirror what's happening in the northeast. In fact, the NAR expects that home sales will rise coming into the New Year, which is a relief for many in the housing industry. How the rise in home sales will pan out is too soon to say for some of the industry’s leading experts. However, they all agree the time for home sales to rise is now as the quarter ends. |
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Falling Mortgage Rates: Monumental Downs
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In these past months, mortgage rates and prices have drastically gone down making it appear as if it is a risk-free buyer's market. From an outsider, it definitely looks that way, but once you look at all the contributing factors, you'll realize that there is more going on than you think and the buyer is not coming out on top. Lenders Aren't Being as Generous Advertising surrounds the general public notifying them of the plummeting mortgage rates. They're encouraging people to take advantage of the rates and purchase a property. However, this is where the public reaches a Catch-22. Mortgage rates and prices are at a record low during these past five months, but banks and lenders are hesitant with providing potential buyers with loans. Lenders have made stricter requirements and most buyers simply do not qualify. A couple years ago, Countrywide Financial Corp was carelessly giving loans out to almost anyone who applied. Now they are stuck with foreclosures and people who cannot afford their new adjusted mortgages. In response to this $1.2 billion upset, they have taken measures to prevent any further financial damage, which in turn leads to their stricter qualifying requirements. They are rarely lending money to a zero down mortgage and they desire a high FICO score. The Countrywide example has spread to other lenders and banks, giving them precedence to be picky with their money. Another reason for the spiraling mortgage rates are due to the recent trend of buyers purchasing investment properties or second homes, instead of the purchasing of a primary home. Last year showed that 40 percent of homes that were purchased were bought as second homes. The National Association of Realtors recorded this as the highest percentage of non-owner-occupied purchases in history. Since these homes are not primary residences, these homes are more likely to be sold and put out in the market again. The owners will less likely want to refinance and will decide to sell their property. So now the demand for housing has also gone down. Having Lower Mortgage Rates Won't Fix the Problems With the low housing demand, you would think that the lower mortgage rates would entice investors to come back to the market. However, the recent situation shows that even with the declining mortgage rates, the housing market is still suffering. There are about 3.86 million existing homes and 568,000 new homes currently on the market. These numbers reflect our over-abundant supply of homes. And since lower rates aren't doing much for the market, the future may hold higher rates with the same outcome. The housing market would like buyers to think that the low mortgage rates will be in your favor, but make sure you look at the big picture. Why aren't more people buying? What's causing all these rates to go down? Is my investment a risk? If you play your cards right and you look into all the scenarios, you could totally take advantage of this desperate market. Like any investment, don't get involved with anything unless you know what your choices and information are. |
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30-Year Fixed at its Lowest Average Rate This Year
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With the subprime mortgage lending era ending, homebuyers are looking forward to the upward swing of fixed mortgages. In recent months, 30-year fixed rate mortgages have stabilized, making them highly sought after in the buyer’s market. Experts predict the fixed rate will stick around for the end of 2007, which puts potential buyers in shopping mood. 30-Year Fixed at its Lowest Average Rate This Year — Say Goodbye to Subprime Mortgage industry experts are looking forward to the end of subprime loans, which had a large hand in the home selling industry’s poor performance. This doesn’t mean that homebuyers should be thanking the subprime mortgage lenders, many of which are now out of business thanks to foreclosures and defaulting loans. However, until the need for mortgage loans becomes harder to obtain, buyers are hopeful and advised to take advantage of the deals on 30-year fixed rate mortgages. 30-Year Fixed at its Lowest Average Rate This Year — Looking for a Turn in the Economy The downside to the positive mortgage rates is that unless America’s economy takes a turn upwards, mortgage loans could become more expensive and drive the rates back up. Fortunately, the sluggish economy is driving down the price of houses, making it more likely that a house on the market right now will sell. Rates Could Dip Lower Some analysts are already seeing that mortgage rates are dipping lower into the high fives, with fixed rates hovering between 5.73 percent and 6.10 percent. This is a significant dip from two years ago, when subprime mortgages were just beginning to gain speed. People are starting to shop the housing market, looking to take advantage of great rates before they change again. However, the likelihood of an interest rate climb doesn’t look like it’s going to happen until after the New Year. Now is the perfect time to shop since most closings take between 30 and 45 days. What This Means for Sellers If you are considering selling your home, now might be the perfect opportunity. There is currently a steady market of potential buyers, as the market begins its upswing for the end of the year. However, sellers must realize this is still a tight market. Homes are under rigorous scrutiny, as buyers want the absolute best for their dollars — even if a 30-year fixed rate is exceptional, buyers are still holding out for a home in top condition. 30-Year Fixed Rate — Final Words of Caution Before you head out the door with your checkbook in hand and ready to make the purchase of a lifetime, be aware that home prices have to be low in order to make the low 30-year fixed rate work for you. While some buyers take advantage of low fixed rates, they fail to realize that the home of their dreams may still be too pricey. This is probably the biggest problem that brokers and realtors are facing. However, it shouldn’t derail you from purchasing. As anyone who deals heavily in the housing market knows, there is always room for bargaining. By and large, most everyone in the housing industry is hopeful that the housing slump will end with the low fixed rates currently on the market. Almost as hopeful are those looking to recover from the subprime market. With buyers wanting to cash in on 30-year fixed rates and sellers regaining faith that this is a prime time to sell, spirits throughout the housing industry are looking brighter. |
