Foreclosure by Jeff Turner Flickr

 It is hard to get a handle on the foreclosure situation.  One day we read that foreclosures have gone down, the next we read that the foreclosure rate is going up.  Either way we do know that there are people who are behind on their mortgage payments and they need help and that there are still homes out there owned by banks that have not been put on the market yet. 

Foreclosure has become far too common in recent years.  There is help for some but not for those who wait until they are several months behind on payments before they ask for help. 

There is an organization that can help and that has helped people avoid foreclosure and that is the Minnesota Home Ownership Center.  Their web site is packed with useful information and they have a staff of qualified councilors who can help. 

There are foreclosure scams out there.  The Minnesota attorney generals website is a great place to learn about them and avoid them. 

Also beware of the real estate agent that is a short sale expert.  It is always in a real estate agents best interest to sell a home.  That is what we do and how we make money.  Short sales are not always in your best interest.  

If you need to walk away consider giving the bank a deed in lieu of foreclosure which is giving the house back rather than having the bank go through the foreclosure process.  Keep in mind that your mortgage agreement is a two way contract and that is that if you don't make the payments they get the house. 

Also see 

Who Benefits The Most From A Short Sale?

1948 Home Sales Await Bank Approval

I don't have a PHd in economics but I am going to go out on a limb and say that interest rates are not holding the housing market back.   They are at a 60 year low yet the housing market continues to struggle. 

It seems to me that if there were more jobs more people would buy houses and they would pay more taxes which would help governments pay their bills.  

If you have a job and can afford your rent or house payment there is no recession, or if there was it is over.   If you are unemployed, under employed and or struggling to pay a mortgage we are in an economic depression that started in several years ago. 

We should only report happy news because happy news is good for the economy and the housing market.  My happy news is interest rates are at a 60 year low.  Do your part, help the economy and buy a house today. 

Interest rates have been low and trending down rather than up.  They are so pretty that I thought I would publish the chart from Freddie Mac.

Interest rates are still at an all time low and the common wisdom is that rates will go up but no one knows when.  Yesterday I saw a news segment on TV about what a great time it is to refinance because of the lower interest rates.  It is never a great time or the best time for everyone when it comes to refinancing or buying a home.     If anyone tells you now is a great time to buy or to refinance without knowing what your situation is . . RUN!

Just because the rates are lower does not mean that it is a good time to refinance.  We pay the most interest on our mortgages during the first few years.  On a thirty year mortgage that first payment is mostly interest.  As time goes on we begin to pay more principal and less interest.  When you refinance you start all over again paying a lot of interest but and not paying much on the principle.  There are also closing costs to pay on a refinance.

For people like me who are at the tale end of a mortgage that was for a higher rate it doesn’t always make sense to start all over paying all of that interest.  My own mortgage payments are mostly on the principle, I already paid most of the interest and for me there is no advantage to refinancing unless it is to a loan with zero interest.

Also see Home Equity

It is a buyers market and locally prices are very low with Condos starting at 40K.  There are fixer uppers out there for 10K but it takes more money than that to fix them up or tear them down and start over.

The combination of historically low interest rates and low home prices make home ownership more affordable than it has been in a long time.  In fact earlier this month I saw the phrase “soaring affordability”

This may not seem like good news for home sellers but it is for those rare “move-up” buyers.  Those are the folks who sell one home and buy a nicer one.

It is more important than ever before to shop around for Mortgage rates.  They are all over the map.  Apparently the new laws that reform

  loan officer compensation that took affect last month are having an impact.  Shopping for a good mortgage rate has always been a good idea.  It may be a pain in the extreme lower back but it will save $$$$ for years to come. For a great source of mortgage related information check out "Behind the Mortgage" by Alex Stenback. 

For general information I like the the Freddie Mac Primary Market Survey because it give me a clue as to about what I can expect a mortgage interest rate to be.  Rates will be higher for those with lower credit scores. 

Snow Hats (click to enlarge)

I have seen a lot of headlines in recent weeks that mention skyrocketing interest rates.  The idea behind headlines is to make them as catchy and attractive as possible so that people will read the story.  My headline today is a little misleading so keep reading. There is a story about home mortgage rates.  They hit a 40 year low of 4.23% last October according to Freddie Mac Mortgage Survey.  They have since "shot up" to 5.03%

I took a look at the data for the last 40 years and discovered that an interest rate of 5.03% is the lowest rate ever published for January. That means that rates are lower this January than they have been any January going all the way back to 1971.  My headline is accurate but it doesn't tell the whole story.

They will go up this year but I predict that they will remain at historic lows.  I am going to suggest that the October rate of 4.23% was one of those weird little flukes.

There is absolutely no truth to the rumor that interest rates on mortgages are high, they remain at historic lows but there was some concern over how much they went up and in such a short time.  The average for the year 2010 is also a 40 year low at 4.69%.  I won't bore my young readers by pointing out that when I was there age and we bought our first home the average rate was right around 11% which was lower than the sky high interest rates of over 18% in the beginning of the 1980's.