Are you trying to sell your home so you can take advantage of the low mortgage rates and upgrade to a bigger and better home? Or are you trying to get out from underneath your mortgage so you can go back to renting or another situation because you simply can’t afford the payments any longer? Either way, selling your home is going to be one of the first steps to achieving those goals. Unfortunately, many home sellers shoot themselves in the foot when they try to sell their home by making mistakes that turn potential buyers off. Here are a few of those mistakes and what you should do to avoid them.

Pricing the Home Too High
Many home sellers have the idea that they can overprice a home and then negotiate to a lower price. While this is common in the real estate game, you shouldn’t just pick a price at random and expect to negotiate from there. You should know the local market and the housing prices in the surrounding area so you can set your price according to those standards. A price that is too high will guarantee that your home stays on the market for a long time. The longer it’s on the market, the less appealing it becomes to potential buyers.

Leaving Things Laying Around
When getting your home ready to show to potential buyers, it is never a good idea to leave things laying around. Pack away any personal photos and trinkets before anyone comes to see your home. You want the buyers to be able to see themselves living in that home and you are diminishing that feeling by letting them see the people who lived there before. The fewer knick-knacks and decorations you have in your home, the better it looks to the buyer.

Making Emotional Decisions
Good decisions are never based on emotions. That’s why you have to leave your emotions out of it when trying to sell your home. Some buyers are inevitably going to offer a price that is a lot less than the listing price. This isn’t a personal attack on you when they do this. It’s just part of the game. When this happens, you can’t let it affect your decision. Respond to all offers regardless of how low they are and you may be surprised how much those low-ballers are willing to pay after all.

Being Present
You never want to be in your home when potential buyers come to see it. Few things turn off buyers quicker than seeing the homeowner there when they are trying to make a decision. If you are there, they may not feel like they can discuss any issues with the real estate agent and they may just leave without seeing the home’s potential. If there is a scheduled open house or showing for your home, make yourself scarce and find somewhere else to go until the potential buyers have left.

Can you believe mortgage rates have fallen even lower? If you can qualify, now is the best time to buy a home with the average 30-year fixed rate mortgage rates staying steady around 4.3 percent. That’s the lowest they have been since the 1950s. Rates for a 15-year fixed rate mortgage are a half percentage point lower at 3.8 percent. If you can get your hands on one of these percentage rates, here are three ways you can benefit.

Pay Off Your Mortgage Sooner
If you have a 30-year mortgage, one of the ways you can benefit from the new low mortgage rates is by refinancing your home and switching to a 15-year mortgage. About 25 percent of new mortgage borrowers are choosing the 15-year mortgage for obvious reasons – they get a lower interest rate and they save a fortune by paying off their home in half the time. If you qualify for the low rates, you can do this, too. Even if you can’t afford the slightly higher payment that a 15-year mortgage would give you, consider refinancing to a 30-year mortgage at the lower interest rate. And when you have extra money in a given month, apply that toward your mortgage payment and you could pay off your home several months or even years earlier than expected.

Increase Your Cash Flow
If you choose a 30-year fixed rate mortgage either as a new mortgage or as a refinance, you can put more money back in your pocket at the end of each month. Of course, putting extra money toward your mortgage payments can help you pay off your mortgage earlier, but if you are trying to build an emergency fund or save up for a big purchase, those lower payments that you can get with a 30-year instead of a 15-year mortgage will help you have extra cash left over for other purposes. You will be paying more in the long run by the time you pay off your mortgage, but sometimes the financial need is immediate and it’s worth it to take a few extra years to have a paid off house.

Get a Second Home
Are you retiring soon and you want to have a home on the beach or in the woods for your retirement? Or do you just want to have a vacation home to go to each year in your favorite area of the country? Either way, you might be able to afford a second mortgage payment with the current rates as low as they are. Even if you want to rent the second home out until you get ready to retire, the mortgage rates are still very low. It’s a win-win situation all the way around!

You may never get another shot at mortgage rates this low. In fact, many analysts are predicting the rates to start climbing back up slowly in the near future. Make sure you get in while you still can!

By now, everybody knows that there are millions of homeowners in the United States who are underwater on their mortgages. A good majority of these homeowners are faithfully making their payments on their underwater mortgages because that is the right thing to do. But is this bad for the economy?

A recent article in the Los Angeles Times discusses this idea. According to the article, “payments on mortgages that are underwater could absorb billions of dollars that might be used for other forms of consumer spending.” As a result of this, making those mortgage payments creates a “drag on family finances, the housing market and the overall economy.”

Here are some numbers to help make it real. There are currently about 15 million homeowners who are underwater on their mortgages. Of that 15 million, about half of them owed at least 25 percent more on their homes that what they were worth at the beginning of the year. More than four million of those mortgage owners owed at least 50 percent more than their homes are valued at. The three largest real estate markets and hardest hit states are in Illinois, California and Florida where the average negative equity was about $107,000.

Refinancing might sound like the best option for these homeowners. Unfortunately, too many of them owe too much on their home and they are not eligible for refinancing. They can’t get a home equity line of credit and even traditional refinancing loans are out of the reach for most of these homeowners. Even selling their home isn’t an option because they would have to take such a loss that it wouldn’t be worth the time and effort to do so. What’s worse is that the loan modification program offered by the Treasury Department only helps those who have had some type of hardship occur which prevents them from making their payments, such as a job loss or injury.

So the homeowners who are trying to do the right thing are essentially stuck. Many people in this situation are simply walking away from their mortgage. But moral obligations simply won’t others walk away from a financial responsibility like a mortgage. But continuing to make their payments is having an effect on the economy as people who continue to drown in their underwater mortgage. They are not pumping money into the economy because they are being more cautious with their other spending so they can continue to put money toward their mortgage. When millions of people do this, it has quite an impact on the overall economy. It just seems like paying your mortgage and trying to do the right thing is putting many people in a catch-22 situation and there is no viable solution at this time.

In the last several months, more than 1.3 million people who had a lot of trouble making their mortgage payments have entered into a trial loan workout. This is a program which is designed to help homeowners who are underwater and have trouble making their payments modify their loans to help make their payments more affordable. One of the other major benefits was that it was supposed to be a step in the right direction toward stabilizing the housing industry. Unfortunately more than 50 percent of the people who have entered into this helpful program have dropped out of the program.

According to the Treasury Department, 11 percent of the permanent loan modifications entered into in just the last nine months have defaulted. Under the Obama administration’s Making Home Affordable Program, about a half million modifications have been approved through a variety of lenders. In September alone, there were about 28,000 modifications.

The Making Home Affordable Program began in April 2009 and has since started about 1.4 million homeowners on trial modification programs. Unfortunately, about 700,000 of those homeowners have dropped out of the program. Of course, it’s not always the homeowner’s fault for dropping out of the modification program. One of the most cited causes for not following through on the permanent modification is due to lack of the correct documentation to finalize the modification. Another reason for defaulting on the mortgage following the trial modification is lack of payment. A third reason is because many of the people who applied for a modification did not qualify for the help because their mortgage fell short of the 31 percent of their household income that was needed to be eligible for the federal help.

So as the government tries to help troubled homeowners, it seems as though the problem still exists and there is no simple solution in sight. Even when programs are instated, eligibility requirements are not met or people fall into the same habits that got them into trouble in the first place. Sometimes it seems like more frustration than it is worth, but the people who actually benefit from those permanent modifications would probably argue that point.

It’s difficult to complain about the help that is being given to people in need who are having problems paying their mortgage. According to an opinion column in the Philadelphia Daily News, many people are getting the help they need but only after getting foreclosure notices in the mail.

Dahlia Thompson is one such example. She isn’t one of the people who is being vilified for buying a home she could not afford. Fifteen years ago, she bought a home that had a payment of abut $350 a month. She could afford that as well as pay her other bills comfortably. Over the years, she was also able to afford to install new windows, a new gas heater and other improvements with the help of the Housing Authority.

For the first 14 years that she and her kids lived in the house, she was able to make those payments. Unfortunately, as a result of losing her job and falling behind on her bills, she incurred a mortgage bill of $3,100. There was no way she was able to pay this because of her situation so she started asking for help. Unfortunately for her, she did not qualify for a loan modification. As a result, she fell eight months behind on her mortgage payments.

Congress has approved $106 million for a new program to help Pennsylvania homeowners who fall into trouble with their mortgage payments. The bad news is that the new program will not begin taking applications from troubled homeowners until December. For people like Dahlia Thompson, the help is going to come much too late. By the time December comes around, she will likely receive an eviction notice and be kicked out of her home which was almost paid off because she fell behind on her payments this year.

For those who will be able to use the help, however, the program offers troubled homeowners up to $50,000 over two years which gets sent directly to their creditors. If the people stay in their home, this money decreases by 20 percent each year. According to experts, the program is designed to help stabilize neighborhoods across the United States that have been stricken with foreclosures.

One of the last bastions of hope for troubled homeowners like Thompson is that the FBI is investigating thousands of mortgage documents which have been approved for foreclosure when they should not have been approved. Some lawmakers are asking banks to freeze their foreclosure proceedings until the investigation is over. Either way, situations like Thompson’s and others are heartbreaking. Hopefully something can be worked out so everybody wins in the situation.

It seems like every time we turn around, the federal government as a new program or idea to help the mortgage industry recoup from the mess that it is in. Each idea is supposed to be a huge step in the right direction toward fixing the mess, but they never seem to work out as planned. So the question is: Does the mortgage industry need more government intervention? The CEO for Freddie Mac says it does.

The government has been helping to support the mortgage industry for quite awhile now since everything hit the proverbial fan. And according to Charles E. Halderman Jr., the CEO at Freddie Mac, the situation is not going to get much better over the next year and the government should continue to do exactly what it is doing.

Currently, the federal government backs about 90 percent of the new home loans being taken out by home buyers. The government has also created more access for lower down payments through the Federal Housing Association as well as promised to pump “unlimited amounts of capital into failed mortgage-giants Fannie Mae and Freddie Mac,” according to an article in the Wall Street Journal. And, of course, we all know about the low mortgage rates which has had some kind of push from the federal government to reach the lows that they are at today.

By January, the Obama administration has plans for overhauling Freddie Mac and Fannie Mae, the two largest mortgage companies in the United States. As a result of this announcement, both companies have had problems keeping employee morale up and even keeping employees who are looking to find other places to work so they won’t be out of a job once the government begins its overhaul. John Courson, a chief executive with MBA, said it’s not the fault of the companies because they have been doing everything possible to mitigate the damage in the crisis.

So what do you think the answer is to the foreclosure? Should the Obama administration continue with a complete overhaul of Freddie Mac and Fannie Mae? Or are there better ways to deal with the situation?

Financially speaking, there probably isn’t anything worse than having your home sold out from under your nose. That’s exactly what happened to Julio Bermudez and Magaly Cervantes in Dade County, Florida.

Their nightmare started a couple years ago when they were having problems making their mortgage payments on their condominium in the Hialeah Gardens area. Last August, they applied for a mortgage modification to help make their payments more affordable. Their application was approved and since then, they made the nearly $660 payment each month. So you can imagine their shock and surprise last week when they received a letter that stated Chase, their mortgage lender, had foreclosed on them and already sold their property online.

This week, the two were in court pleading their case in front of Senior Judge Robert M. Deehl. They told him with tear-filled eyes how they made their payments faithfully after modifying their mortgage and their home was still sold. Unfortunately, the judge could do nothing about the situation and he just told them they would have to deal with the bank directly and try to work something out with Chase.

Chase did not return any phone calls to the couple until the Wall Street Journal inquired on their behalf. As a result, the bank said it would look into the matter. After investigating the situation, Chase admitted that it made a mistake by selling the home. A spokesperson for Chase said the bank is trying to remedy the situation by reversing the sale and apologizing to the customer. Chase also said that it was going to review the couple’s application for a permanent modification. Currently, the couple is waiting to hear back from the bank.

This story is not unique to the mortgage industry these days. In fact, there are many stories like this that do not end as amicably. With more than a million homes going through foreclosure, thousands of homeowners a complaining that the banks are making mistakes in their paperwork. These complaints, however, do not receive any publicity and they are not tracked so it is difficult to know exactly how many people are complaining about mistakes in their paperwork.

Banks report that the foreclosure process is “sound” and the errors are technicalities that do not affect the actual foreclosure process for the home. But as this one story shows, that is not always true. Banks, just like other industries across the nation, are short staffed these days and the number of foreclosures continues to increase. That’s just a recipe for disaster and mistakes.