Your home
How worried should I be about the drop in my home’s value?
Sixty percent in our poll said this is a concern. If you don’t plan to move in the next few years, you’ve probably got time for the housing market to rebound. If you need to sell a home that you bought more than five years ago and you didn’t borrow against the equity, other than through a first mortgage, you’ll probably still make a profit—if you can find a buyer. If you bought in the past two years, you’ll most likely lose money.
What to do
If you’re trying to sell your home, increase the odds of getting an offer by pricing it just a bit less than similar homes. And keep your listing figure in round numbers. If you price it at $350,000, for example, people searching online for homes from $325,000 to $350,000, and from $350,000 to $375,000, will see it. Only one group will see it at $349,999.
I want to buy a home soon. How difficult will it be to get a mortgage?
A lot tougher than it used to be. Two years ago, you could buy a home without proof of income or a penny down. Now you’ll probably have to submit W-2s and tax returns, and make a down payment of 20 or even 30 percent. You won’t qualify if your mortgage payments would exceed 43 percent of your monthly pre-tax pay; in the boom, payments were allowed to be as high as 55 percent.
What to do
If your credit score is below 720, try to boost it by paying down other debt and correcting any errors on your credit reports. Save for a bigger down payment. Include some local banks in your search for the best terms; they have been less affected by the mortgage meltdown and might offer you a better deal.
What should I do if I have trouble making my mortgage payments?
In October the federal HOPE for Homeowners program began restructuring mortgages for qualified homeowners. Restructured loans will be based on 90 percent of a home's current value, established with a new appraisal. For information, go to the HOPE for Homeowners Web site.
What to do
Contact your mortgage lender immediately and try to negotiate lower payments. Be persistent; lenders are overwhelmed with people in your situation and attend to those in default first. If you’ve been trying to sell but can’t get an offer that at least matches what you owe, see whether your lender will agree to a short sale, which means it will accept a lesser amount. Use recent comparable sales to show that your home is worth less than your unpaid balance.
