If you have been considering purchasing a home, this may be the best year to do it. Here are some reasons why you should make your dream of owning a home a reality before this year is over.

Home Prices are Ideal
With the number of foreclosures on bank books and the surplus of available homes for sale, this is one of the best years for buyers in a long time. There is a lot of competition to sell homes because both home builders and banks are anxious to unload their inventory. Add to that the fact that mortgage rates are at historically attractive levels and you have a great combination for getting a great price on your next home.

Your Options are Nearly Limitless
The large number of homes on the market right now brings down the price but also gives you more selection. Just pick a neighborhood and you can probably find several homes to choose from within a radius of just a few blocks. This gives you more flexibility and you are more likely to find something that you are looking for without going too far away.

Discounts are Readily Available
Home builders are offering large discounts right now in order to sell the number of homes that they have available. Builders want to clear out their inventory so in addition to discounts, you may even be able to negotiate other terms like a longer warranty or some extra upgrades to the home that you choose.

Avoid the Procrastination
If you have been looking for the right time to buy a home and you have a down payment saved up, why not just make it happen this year? If you are renting, you are not building up any equity and that money just goes out the window. When you make mortgage payments, however, you are building equity that you can use in the future if you ever have an emergency expense. Besides, the market may never be as affordable as it is right now.

Find the best mortgage rates in the area where you are looking to purchase.

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Fewer people are applying for mortgages these days. In the week that ended on March 25, there was a 7.5 percent decrease in loan applications with application requests dropping back to the lowest levels since February 11, as mortgage rates rose.

But some analysts are saying that it’s not only the increasing mortgage rates that are to blame for the lack of interested borrowers. Some analysts believe that homeowners are holding out for home prices to fall even further from where they are right now, which could entice potential buyers who are looking for a great deal on a new home.

According to Celia Chen, an economist at Moody’s Analytics Inc., people are less likely to invest their money in a home if they think the housing prices have not hit the bottom yet. As the demand for homes weaken across the country, the home prices will weaken as well, making it more difficult for troubled homeowners to find buyers for their home.

In January of this year, prices for real estate dropped to a one-year low. In February, the number of homes purchased hit at a record low. Slower sales market for homes across the country are spreading across the country.

However, that’s not to say that the increased mortgage rates aren’t playing a role in the slowing real estate market. Last week, the average interest rate for a 30-year fixed rate loan went up from 4.80 the previous week to 4.92 percent. For a 15-year fixed rate loan, the average rate went from 4.02 to 4.16 in the matter of a week. And it’s not only home buyers who are putting on the brakes. Current homeowners who are looking to refinance are also becoming fewer and fewer. In recent weeks, the percent applying for a mortgage refinance has dropped from 66.4 percent to 64.3 percent of all mortgage applicants.

Those in the real estate and mortgage industry aren't giving up hope. They are anticipating the spring selling season of 2011 to see what the market holds in terms of buyers. Nobody is sure about how this busiest selling time of the year is going to play out yet. Is it going to be the start of a massive recovery for the housing industry and the economy in general? Or is it going to fizzle out and require everybody to be more patient while waiting for an actual recovery?

How do you think this season is going to compare?

For current mortgage rates in your area, click here.

For the last several months, statistics have shown that American consumers have been paying their credit card bills before they are paying their mortgage payments. A recent study shows that that trend is still continuing despite the steady increase of the American economy and fewer delinquent mortgages in the last year.

Those numbers could be deceiving, however. For one thing, the number of delinquent mortgages could have fallen because people have walked away from their homes leaving them to go back to the bank. When the bank takes possession of the home, it is no longer on the list of delinquent mortgages. Nonetheless, the trend of paying credit card bills and disregarding the importance of paying mortgage payments is something that has been a major trend for three years.

Transunion, one of the three main credit reporting agencies, has noticed that people are beginning to pay their mortgages again, even if it is in a small number. This is the first time in many months that the percentage of people who are current on their credit card bills and those who are 30 days or more late on their mortgage bills is starting to drop. Sean Reardon, the author of this latest study, says that the latest numbers show that consumers are adjusting their financial behaviors according to their “personal financial environment.”

The study shows that the percentage of American consumers who are current on their credit cards and delinquent on their mortgage payments was as high as 7.4 percent in the third quarter of 2010. That was up more than 3 percent from the first quarter of 2008. However, in the last quarter of 2010, those numbers fell to 3.03 percent, which is the lowest rate ever. That’s good news for people who think the economy is still going downhill as these numbers are an indication that things are starting to improve.

In the last quarter of 2010, 52 percent of homeowners defaulted on their mortgage payments while staying current on their credit card bills. Only 22 percent of homeowners defaulted on their credit card bills while still making their mortgage payments and staying current on that.

The study also showed some more surprising numbers. For instance, the largest group of people that simply walked away from their home (30 percent) was homeowners of at least 65 years of age. Only 25 percent of those who walked away were between the ages of 18 and 34. More than 20 percent of the people who walked away from their mortgages had a monthly income of at least $8,000. About half of the people who walked away made at least $4,000 each month.

The Republicans have been talking about the problems with mortgage reform since the Obama administration introduced plans to help troubled homeowners. But recently, the GOP has offered some of its own ideas about mortgage reform.

The Republicans in the House of Representatives have one bill that would limit the role of the federal government in guaranteeing mortgages. The bill would do this is by increasing the fees normally charged by Freddie Mac and Fannie Mae for the purposes of insuring a mortgage. These are the two largest government backers of mortgage loans and they sit at the cneter of the ongoing mortgage meltdown. By increasing the fees that Freddie Mac and Fannie Mae charge to insure loans, the market would slowly push them out and make way for more private sector insurers.

The House also wants to reduce the portfolios of Freddie Mac and Fannie Mae. In the first year, the two companies would have a cap of $700 billion in mortgage insurance, which would drop to a maximum of $250 billion by the fifth year.

A third bill being discussed by the Republicans in the House would remove the "risk retention" exemption that Fannie and Freddie enjoy. This rule requires institutions that secure mortgage loans to keep at least a five percent financial interest in the mortgage that they secure.

Fourth, the plans of the Republicans would put a salary cap on the executive salaries at Freddie Mac and Fannie Mae. Many people are opposed to this because the two institutions are complicated business that they claim need qualified people to run them. As a result, the high salaries are needed.

Finally, and possibly the most controversial bills that the Republicans would like to pass would do away with the Obama administration’s Home Affordable Modification Program, a piece of legislation that has helped troubled homeowners avoid losing their homes through foreclosure. The program, which is often referred to as HAMP, achieves this goal by offering incentives to lenders to modify those mortgages of homeowners who are having trouble making their payments. While it has helped hundreds of thousands of people stay in their homes recently, it has fallen short of its goal of helping millions. The Republicans think they can do better and help more people with their plans and ideas.

Either way, legislation is several months away from passing and it will be even longer before any new legislation is enacted. Do you think the Republicans should be overhauling the current mortgage relief and modification programs? Or should they let them continue?

Changing the role of Fannie and Freddie in the mortgage world is an important component in closing the book on the housing bubble and crash. Both agencies were effectively nationalized in 2008. The Federal Housing Finance Agency, their regulator estimates that bad loans on the homes thehy back could require as much as $363 billion in bailout money by 2013. Either way, the government has been subsidizing the mortgage and housing market for the last 60 years and it looks likely that this will change in some way. Look for higher rates in future years.

For current mortgage rates where you live, please click here.

Paying off your mortgage early is a great way to save money and start building a nest egg that can last for years. If you do it the smart way, paying off your mortgage could be the smartest financial move you will ever make. Here are four common benefits of paying off your house months or even years before you are scheduled to do so.

1. Guaranteed Return – Paying off your mortgage is guaranteed to bring a great return to you. If you plan on staying in your home for several more years, it will appreciate in value which is always an easy way to save money. If you have money that you are uncomfortable investing in riskier investments like stocks, putting it towards your mortgage is a great and secure way to invest that money.

2. Increased Equity – By paying off your mortgage early, you have access to your home’s equity and more of it sooner. This is ideal in case you have a large emergency expenses occur, such as medical bills or home repairs. The sooner you pay off your mortgage, the sooner you can have access to the maximum amount of equity that it has to offer.

3. Stop Paying PMI – If you are paying private mortgage insurance because you don’t have enough equity built up in your home, paying down the balance on your mortgage will help you qualify to get rid of your private mortgage insurance. Private mortgage insurance, or PMI, can cost as much as 0.5 percent of your home’s value each year.

4. Peace of Mind – Paying off your mortgage will simply make you feel better and more financially secure. You no longer have to worry about making your house payment or stress out about what would happen to your home if you lose your income. The sooner you can pay off your mortgage, the sooner you will own your home outright.

There are several reasons why you should pay off your mortgage as soon as you can. Even if you have to make a few sacrifices in your lifestyle to have enough money to put towards your mortgage, it is definitely worth it when you send in that final payment. Before paying off your mortgage early, though, check with your bank to make sure there are no penalties or other charges for early payoff. Even if there is a penalty, it is probably less than you would pay over the term of the mortgage loan.

For the best current mortgage rates, click here.

With the mortgage market such a volatile issue for many homebuyers, some people will get desperate to purchase a home even if it means doing it in a non-traditional way. Unfortunately, most of these non-traditional routes for buying a home are scams and they can cost you thousands of dollars. Before you jump into anything that could wipe out your life savings, here are three main mortgage scams you should know about so you can avoid them if you see them coming your way.

1. Equity Stripping
This scam is played on people who have already built up some equity in their home and they have fallen into financial trouble which makes it difficult for them to make their payments. What happens is that the con artist convinces the homeowner to sign the title of the property over to them and they will, in turn, make the payments on the house. The scammer tells the homeowner that they can still stay in the home and pay rent. The scammer also tells the homeowner that they can buy the home back once they are financially secure once again.

Unfortunately, the scammers in these situations only drain the house of any equity that the homeowner has accumulated. More often than not, the homeowner is never able to buy the home back and they end up losing the house.

2. Phantom Help
With this scam, the scammer offers to “rescue” the homeowner from their mortgage mess by acting on their behalf and offering to make phone calls and do paperwork. While this sounds like a good idea, the scammer typically charges outrageous fees for this kind of work and the homeowner could do the exact same thing themselves. In addition, the scammer tells the homeowner to ignore any phone calls from the mortgage lender or any of the lender’s agents. This is because the scammer, in actuality, does nothing to help the homeowner and the property almost always ends up in foreclosure. By this time, it is too late for the homeowner to do anything about it and they often lose their home as a result.

3. The Old Bait and Switch
This is one of the oldest scams in the book and many con artists have perfected this scam to get thousands of dollars from people. What happens is this: The scammers pose as housing counselors who want to help the troubled homeowner get out of their financial trouble with their mortgage. They have the homeowner sign a bunch of paperwork that supposedly gives them lower mortgage rates, lowered principal balances or some other help that will make their monthly payments more affordable. But the homeowner is actually signing ownership of their home over to the scammer.

The worst part about this scam is that the homeowner still owes the money for their mortgage loan but the scammer now owns the home.

These are three of the more common mortgage scams that have been going on for many years. In our next post, we will tell you some ways you can avoid becoming a victim of these scams so you don’t lose your home to a con artist.

Mortgage scams are running rampant these days with desperate home buyers and people looking for an easy way to get financial help with their mortgage. But most people wind up worse off than they were before when they try one of these routes because they are often scammed. Mortgage scammers prey on the elderly and people who don’t speak English very well because it is easier to scam them. Here are some tips to help yourself not become a victim.

• Talk to your lender at the first sign of trouble. In almost every situation, your lender will try to work with you to help you through your mortgage troubles. With all of the foreclosures on the market, your lender does not want to foreclose on another home that will sit on their books without making money for a year or two to come. Try to work out a payment plan or some other plan with your lender before you do anything else.

• Know the laws in your state. Foreclosure laws differ from state to state. So if you think you are in danger of foreclosure, find out how much time you have before you actually get evicted. You may be able to work something out before that date arrives rather than enlisting the help of a third party and getting scammed out of your home and you money.

• Always keep in touch with your lender when financial problems arise. Many homeowners ignore the problem until it overwhelms them and then they start looking for desperate ways to help their situation. This very often leads to getting scammed. Never ignore your mortgage problems because they won’t just go away.

• Consider a HUD-approved counseling agency. A qualified and certified counseling agency can often work on your behalf and help you get through your financial problems without losing your home. Never go to an agency that is not approved by HUD or one that seems too anxious to help. And it’s almost never a good idea to use a counseling agency that contacts you rather than one that you contact yourself.

• Never sign anything without reading it and understanding it first. Even if the person tells you what the paperwork says, take the time to read it. If you have to take it home and let someone else read it as well, that’s a good idea. Making hasty decision never ends good and you could be signing something that gives up ownership of your home if you are not careful.

• Only make payments to your lender. Some scams going around ask you to pay a third party who then pays the lender for you. Most of the time, the third party keeps your payment and you might not even know it until you receive your foreclosure notice.

The best thing to do when you fall into financial troubles and you can't pay your mortgage is to take a deep breath, look at your options, speak with your lender and read everything before you sign it. This will help you avoid becoming another victim of a mortgage scam.