Is Real Estate in Suburbs is Making a Comeback?

Forbes Magazine reports that areas hardest hit by the real estate bubble -- California's Inland Empire for example -- seem to be turning around. This area just east of Los Angeles with approximately 3 million people has been negatively impacted with one of the highest foreclosures and the largest surges in unemployment in the nation.

Forbes quotes top agent George Guerrero from Advantage Real Estate in Chino Hills who says he sales are increasing and inventories are finally starting to decline. "There's been a real surge in sales," Guerrero says. "The market has come back to where it should be. I think we are ahead of the curve here of the overall recovery."

Across the nation, existing home sales (mainly in the suburbs) have been rising for the past few months. The highest rate of growth is happening in Sunbelt states, like Arizona, Nevada and Florida, as well as in California. While loans are harder to find, these homes are much more affordable than they were a few years ago. Buyers with good credit are finding they can purchase for 50 percent below the peak. And with gasoline prices having dropped to more reasonable levels, families are, and will continue, to move out to the suburbs.

Read the entire Forbes article here.

If you are a first-time home buyer -- or if you are looking to take advantage of record low interest rates coupled with great bargains in the home market -- you need to make sure your credit is in order. You should always start evaluating and repairing your credit about 6 months before any major purchase. The Credit Secrets Bible takes you through the steps to help repair your credit. I was able to raise my credit score -- using The Credit Secrets Bible in the last two instances -- and save myself $$thousands in points and interest.

In Today's Economy, Saving Your Cash May Be Better Option Than Paying off Debt

USA Today has an article on how the current financial crisis is hitting segments of society normally not impacted during previous economic downturns. They call it "the perfect storm" because not only are we experiencing massive layoffs, but the stock market has lost around 40 percent and the largest asset most families own (their home) in now their greatest depreciating asset.

The experts cited say that many people caught in this perfect storm will never get out of debt and that at this point in the recession, it's better to cut back dramatically on your expenses and save for a rainy day, versus paying off debt. If you lose your income, you will quickly need to make decisions about how to allocate your savings.

For example, if you are less than 6 months late on a credit card bill, that's not a crisis. They have charged it off and you lose is your credit rating. This is not a catastrophe and if you have a good tool -- like The Credit Secrets Bible -- you can delete bad credit from your credit report.

However, if you are 6 months late on your mortgage, you have most likely received a notice of default and are about to lose your home. And if you are one month late on your car payment, you may be in jeopardy of losing your transportation to job interviews.

Who is Getting Those Low Mortgage Rates?

The Washington Post features an analysis of who is getting those advertised 5.5% interest rate mortgage rates. Here are some of the requirements stated in the piece:

• 20 percent down;
• borrow $417,000 or less;
• boast a high credit score (730 to 750, out of 850 total, as determined by your credit history);
  
• carry low debt relative to your reliable income (confirmed by two years' worth of tax returns and probably not counting bonuses);
• buy in an area where home prices are relatively stable (wherever that is);
  
• and use a community bank, not a national bank.

The article goes on to state that all the "exotic" loans from the bubble years are gone, including stated income (where you don't provide documentation of your income), pick-your-payment mortgages (where one month you can pay interest only), 100 percent mortgages (where the lender provides both the first and second mortgage).

Most lenders in declining markets like California, Florida and Nevada are not only requiring a minimum of 10 to 15 percent down, but a minimum credit score of 720 as well.

Fannie Mae and Freddie Mac add a quarter-point "adverse market delivery charge" because of declining home prices. They have also initiated "risk-based pricing," which raises fees on people with less than a perfect borrowing profile. You will pay more if your credit score falls below about 720, you are buying a condominium or you are putting less down than 15 percent.

However, if you are a veteran or farmer, there is some good news for you. The Department of Veterans Affairs and Agriculture Department loans in rural are still offering loans with zero down and no PMI (mortgage insurance).

Read the entire Washington Post article here.

Load of Revolving Debt Especially Hard on Subprime Borrowers

Mortgage banks weren't the only ones dishing out easy credit to subprime borrowers. In an investigation conducted by USA Today, the consequences are clearly visible with foreclosures at record levels and credit card delinquencies nearing a six-year high as millions of borrowers struggle to keep up with a record load of revolving debt, mostly on credit cards.

What caused this crisis was credit card issuers were eager to extend too much credit, too quickly because of the "phantom equity" in people's homes.