Mortgage Rate News

While some people are starting to think of foreclosure as a smart financial planning move, others are still very concerned. With the economy in question, there are many homeowners who are concerned that they will not be able to continue making mortgage payments. Add this worry to the fact that many of the expected foreclosures in the coming months are likely to owe more on their homes than the home is worth (what with falling home values across various real estate markets), and some just hope that they can sell their home for any amount

This is where the short sale comes in. This is an alternative to to foreclosure. Some mortgage lenders are willing to work with you, allowing you to sell the home for less than you owe. The Tacoma News Tribune explains why some mortgage lenders are willing to forgive some of your mortgage debt:

Sometimes, banks would prefer to cut their losses and avoid foreclosure, which is a costly and months-long process. Plus, banks are in the business of lending money, not collecting and selling homes.

Buying a short sale home

A short sale home can make a great purchase decision. However, it is important to note that it can take months to hammer out an agreement. And usually, before most mortgage lenders will approve a short sale, the home needs to have been on the market for at least 90 days. If you can handle the wait, and the frustration, a short sale home can be a good real estate investment as well, since you are likely to get it for less than market value.

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If you can avoid it, now is not the time to sell your home. It is definitely a buyer’s market, and if you can arrange it, it would be best to rent it out if you can’t live in it. If you must sell your home, however, there are ways to increase its appeal, and increase your bargaining position. At the very least, these tips for selling your home could help you get another couple thousand dollars for your real estate:

• Spruce it up. Spruce up your home with new paint. You can also change the window treatments so that they look fresher. Try neutral colors. Few people want to buy a home with a “custom” paint job. You can also spruce things up by adding plants and other attractive accents and “accessories” to your home.
• Stage the furniture. This can be a great way to show off the home. Have a professional stage the furniture so that it helps show off the size of the rooms. Furniture can be arranged to give the whole home a certain attractive feel.
• Clean up. Do the cleaning. Dust the light fixtures and get the cobwebs out of the corners. De-clutter all areas of the home. Now is a good time to get rid of what you aren’t taking with you. And it will help make the home more attractive.
• Maintenance. Make sure that things like electrical and plumbing are in proper working order. A home inspection by the potential buyer can scuttle the deal if you don’t have everything up to snuff.

• Upgrades. Consider adding things like energy efficient windows or remodeling the master bathroom. Upgrades can make a home more attractive and help it sell more quickly.

Even if you don’t get the price you want, if you aim to sell, and sell quickly, you will have a better chance using the above tips.

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buyers market, real estate investment

The stock market is down today as credit ratings remain in doubt over losses related to the subprime mortgage crash. Additionally, Alan Greenspan is warning of a possible recession, and that isn’t helping the stock market, either.

MarketWatch reports on the stock market:

U.S. stocks on Monday extended losses into a second day as Moody’s Investors Services warned it could lower bond insurer credit ratings because of subprime losses and Alan Greenspan warned of a possible U.S. recession.

The subprime mortgage crash continues to affect the economy, even as Congress works to change FHA mortgage loan rules and the Bush Administration tries to stem the tide of expected foreclosures with a five year mortgage freeze.

Most of these fixes, however, are only band-aids. The new FHA mortgage loan rules will mainly benefit first time homebuyers and will do virtually nothing for those faced with foreclosure. Additionally, attempts to fix the economy with increased liquidity, bailout plans and mortgage rate freezes will not hold up in the long term.

Right now, real estate investing should be something to be wary of, as well as investments in real estate related industries like mortgage lending and building. Some stock investments are available at bargain prices, but it is important to choose carefully; while some stocks will recover and you could see great returns by investing now, others will not recover.

And it is worth noting that many do not feel that U.S. housing prices have bottomed yet, so real estate flipping is not the best idea right now, and waiting until next year to buy real estate may be a better idea. Bloomberg reports on the housing market and the economy:

“We’re only halfway through the housing shock,” said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth- biggest U.S. securities firm by market value. “It’s just a matter of time before the weakness spreads to the rest of the economy.”

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mortgage blog, mortgage rate freeze, stock market