No Money Down	

Obviously a banker was not involved when a bright thoughtful genius came up with no money down mortgage loans.  Even the safest of mortgages backed by the FHA require a 3% down payment and limits on the maximum you can get based on a variety of factors including average home prices in your target area, and resale values.  The down payment had been in place to show that the borrowers had at least some sense of fiscal responsibility when purchasing a home.  By not requiring a down payment mortgage originators were just about assuring that their default rate would double or triple in a few years time.

A down payment at the very least ensures that their will be a small amount of equity for the borrower as long as real estate values are not in decline.  It also allows the borrower to buy a bit more house than they could actually afford.  Ideally, the borrower would want to be able to purchase a house for less than 80% of it's appraised value to avoid the Private Mortgage Insurance required by most lenders for approval.  In addition, the borrower has to take into consideration what local taxes are required based on the property and how they will be handled to avoid tax problems and possible liens.

Loan Modification Scams

Mortgage holders with payment problems beware of your mailbox.  If you have had the misfortune of falling behind on your payments to the point that your lender has filed for foreclosure you will begin to see a deluge of postcards and official looking letters from a variety of companies trying to take advantage of yoru sitiation.  There are many companies that will offer to negotiate your foreclosure situation for an upfront fee.

Avoid these at all costs.  Most are only interested in how much they can get out of you.  Once you sign on it will suddenly be very difficult to speak to anyone live.  Your messages will not be returned and you will get abosilutely nowhere except further behind on your loan and a smaller bank balance.

Your best bet is to contact your mortage bank and see what programs they have specifically for their customers.  Thanks to the Obama administration there are federal programs designed to help you modify your loan and keep you in your house.  The problem is that they are woefully under staffed and the pipline for paperwork is clogged.

Current Mortgage Landscape

Mortgage rates for the average homeowner have started to inch up from historic lows a few weeks ago.  If you have a property in mind, the credit score to get the best rates and a down payment, the next few weeks are crucial to get you low rate locked in.  With the economy showing signs of slowly recovering, new home starts increasing and existing home sales increasing, mortgage rates are sure to climb.

Several issues will let you know whether it is right to buy now or hold of a little longer.  How is the rate of foreclosure in the area you are looking to purchase a home?  Are home values stabilized, declining or increasing in that area?  If the real estate values are stabilized and foreclosures aren't increasing to adversely affect your target home value, I would lock in your rate and get a pre-apporval before visiting any properties.

With a pre-approval letter in hand, realtors will know you are serious and whether you can get a home for less than the listed price, knowing there will be little or no chance of your deal going through.  Find the home you want, make an offer you can afford and make sure you leave enough to handle the inevitable renovations you are going to want to make to turn your purchase into the home you have dreamed of.

Renting Versus Buying

With the vast change in economic landscape over the last several months, the American Dream of owning a home has become a distant reality for all but a few people who have pristine credit and a significant nest egg that had not been centered in the stock market.  Couple that with the great uncertainty over whether you will even have a job over the next several months, most people are postponing that biggest of all financial decisions.

With rental properties coming under foreclosure, tenants even have to be very careful about where there lease payments are going.  Make sure if youa re renting from a private individual you know whether he is current on his loan in this unsure financial landscape.  Landlords who lose there property to foreclosure can create great hardships for their former tenants.  Depending on the mortgage holder tenants can be evicted on short notice even though they hold a valid lease agreement.  As a tenant with a private landlore, make sure that in the event of the property's foreclosure you are protected.  Most states now preclude a foreclosed property owner from evicting a tenant as long as their lease is in good standing.

Keeping Communication Open

With the economy in the tubes, job security no longer existent for anyone, and corporations willing to cut anywhere to appease the wolves of Wall Street, if you would happen to fall behind on your mortgage or even your rent due to job loss, illness or other unavoidable cause, keeping in communication with your mortgage company or landlord is a way to avoid losing your place of residence.  Many financial institutions have developed programs for those in temporary distress to receive a deferment on payments for a few months until a new job has been found.

There are many property management companies that now have unemployment insurance written into their leases that state they will waive your rent for a few months if your unemployed involuntarily (laid off).  However, these programs are not advertised far and wide, and you may have to dig a little to see if your financial institution or property manager can help you with a problem should it arise.  If you are laid off, contact your financial institution or landlord right away and let them know the situation.  If it is a long term lay off, perhaps they can help.  If you know it is only a temporary layoff, still communicate that so that you can make sure to take care of your financial obligations.

Condominiums

Condominiums have been a great way to own a property while not having the maintenance requirements that acreage requires.  You get the advantage of home ownership without the requisite lawn mowing, landscape maintenance and exterior upkeep that a stand alone home requires.  Due to these advantages, singles and retirees have long used condominiums as their choice of residence as well as young professionals in urban areas that don't want a commute.  This demand created a glut of condominium development in many areas and now is seeing an even great drop in value proportionately to single family homes.

This could mean that condominium sales of existing units could see an earlier resurgence than single family homes as long as the financing units available recognize that fact and lend accordingly.  As seniors and singles usually have lower earnings and their potential for income disruption is higher, interest rates are usually as much as a full percentatge point higher than on stand alone homes.  This shouldn't discourage a potential buyer as long as they factor in what they will save in the long term on landscaping, exterior maintenance and lawn mowing costs.

Townhouses

Townhouses are another type of housing unit designed to create a sense of community along with a low or no maintenance amenity to the property owner.  Most times these units are styled as regular homes, merely attached together.  They will also have a small front yard and a backyard with concrete pad or patio that shares boundaries with the units on either side.  If you have a small family or no children and lead an active lifestyle away from home, the lack of personal space shouldn't be a problem.  As your family grows your exterior space needs change and you may need to look for a property with its own lock.

The advantages to a townhouse is that it will be less expensive on a per square foot basis than a similar size separate single family home, unless the townhouse is in a trendy urban area and then you can see townhouses going for a 25% or higher premium than similar stand alone homes.  Townhouses are also great for empty nesters that don't want to mow a large yard or shovel a great deal of snow, but still want to work on the landscaping a bit.  Yards are much smaller and more manageable for older folks.








