US Home Value Continue to Fall

The financial net worth of homes and of individuals in the United States has decreased dramatically to $ 66,740 in 2010 from the $102,844 from 2005. The Census Bureau has recently realized the crisis that is currently facing the nation, according to their findings: there has been a 35% decrease in the net worth during the years between 2005 and 2010.

These findings also pose as warning to the financial status of many US citizens for their total capitals have fallen. The cause of this decline is not a mystery at all to the agency. These causes are the tremendous economic depression that occurred in the nation in 2008, and rapid increase in the total number of households in the nation.

The prices of houses have declined in the market and this triggering economic turmoil such as problems in banks to massive unemployment of citizens. In fact, the cost of owning a house is cheaper compared to debt in mortgages and loans; the value of stocks and other assets have also fallen behind housing.

The census of the government was able to measure the problem in numbers; however there is another report from the Federal Reserve whose findings are opposed to the data they gathered. The data exists for about a year and a half now, but they include the problems that are hovering over the investors and consumers.

According to CoreLogic, 11 million of the mortgages and that is equivalent to twenty three percent of the loans in homes in America are charged with fees above the real value of the house. The value of stocks however, has been a little better compared to how it was in 2010.

The Survey of Consumer Finances which is released by the Federal Reserve in three year intervals contains the latest analysis of the finances of families in the country.

Rent to Own, Lease Option to Buy Gives Buyers Time to Improve Credit

ReMax True Advantage’s agent Ezell, has been working with various clients pertaining home loans and provided them with great deals with reasonable prices. According to her, the current financial crisis prevents people from buying houses, but with the new rent-to-own terms, they have both the time to clear their credit and own a house.

The houses that Ezell sells allows the client the right to refuse to purchase the house they will rent, they will be required however, to pay an option fee which is 2 percent of the total price of the house if ever it were to be bought.

The number of houses sold is now waning compared to the last two years. Most of the landlords that Ezell deals with are very much willing to sell their properties but due to the fact that there are too many homes in the market and very little interested buyers, leasing the property is their best option at the moment.

Aldo Aguirre a military member, is selling homes and also open to rent to own terms. According to him, it is beneficial for military members such as himself to rent to own a house. His job requires him to move from place to place and he must rent or sell his house once he is based elsewhere.

He currently owns a house in North Carolina under a rent-to-own deal, he says it has been very beneficial for himself and his buyer. The contract expands within 2 years and both parties would have to agree on a price for the house for its expected market value after 2 years’ time.

In these terms, Mr. Aguirre is getting payments from rent which takes care of the house’s mortgage and at the same time, the client takes care of the lot. The rent-to-own contracts are very popular to a buyer who are interested to buy a house but currently lacks the financials to purchase it.

Number of Felonies Gone Down

Equifax has announced that the total number of first mortgage delinquents has gone down $500 billion dollars in March 2012; this has been the lowest it has ever been since January in 2009.

According to the March National Consumer Credit Trends Report of Equifax and Creditdorcase.com, the number has fallen to 49.5 million outstanding mortgages that’s almost an 11% drop in from the previous 55 million cases during the same period last 2008.

79 percent of the total breaches in the home equity credit categoryis from the 2005 to 2007 loans. The credit levels are continually falling in the past weeks. Recently it has dropped by 25 percent from $ 1.3 trillion in the year 2008.

More good news:

The balances in first mortgages are at below 3.5 percent compared to the number in March last year. The decline has been continuous every year for 36 successive months.

The number of first mortgage loans that has exceeded the 30 day past due rule is at its lowest, this is lower than the one recorded on June 2007.

The past 60 days due to past 90 days due are also at their lowest levels. The share of loans that are in their worse cases that have been due past 90 days has also fallen over in 24 months.

Existing liabilities for home equity revolving credit have dropped by 17 percent from the month of March in 2009 to this year.

The percent of credit lines opened January of this year has risen by 16% than January 2009, but is 67% lesser than the January 2008 record.

Rates, balances and ratios of credit limits have been stable at 55% since March 2009. The credit available however has decreased from $575 billion to only about $470 billion.

Home equity installment loans went down to 46%, now it is $150 billion from $275 in 2008. The total rate of crimes is also lower by 14% in March 2011.

Credit Card Holders Reached The Highest Percentage Yet

A surprising twist has occurred in the credit card industry as more clients turn to credit card companies for loans. Customer borrowings surged up to $21.4 billion just as the month of March was about to end.

The percentage of credit card loaning and the amount of dollars loaned has reached its highest amount in March, breaking the November 2001 record. However there has also been a puzzling increase of $5.2 billion in the amount of revolving debt. This may be due to the downtrend of credit cards since the recession; the limited number of cards has also limited clients’ purchases.

Analysts still find it difficult to interpret the data that they have gathered about the sudden surge of credit card in March. Does the data indicate that customers are now more confident financially to get credit cards or are they in need of the cards to pay for their loans?

According to experts, in this stage, it is too early to tell what the customers are thinking. A little more time and credit data will be needed to truly understand the flow of the market today. In a few months, study will be able to answer if the Americans have truly recovered from the recession or are they still struggling through mortgages, unemployment and other unsettled accounts.

A recent research conducted by the Conference Board, the February and March data included an increase in the percentage of clients who are confident that their incomes will be increasing in the coming months. This is an indication that people are willing to borrow if they are expecting a larger amount of pay in the future.

On the other hand, an increase of 0.5% in the hourly pay has occurred in the last 3 months; also an 8.8% has hiked in the price of gasoline and a 0.9% inflation rate increase. To keep up with their lifestyle, some households have to borrow from credit companies.

But good news from the Energy Information Administration has burst out his week, gasoline prices will not exceed $5 a gallon, as analysts guessed. The price will be $3.70 per gallon in the summer.

The Effect of Your Spouse’s Bad Credit in Buying a Home  

After getting married with a spouse having a bad credit, does it stop you from buying a house with your good credit record? The answer is “no” because your plan to buy a home you want is still very possible or within your reach. Before you castigate your spouse for ruining his credit, take note that after the severe financial crisis in 2008 only few Americans were greatly affected by the credit crunch. In fact, many American families are uncertain about their financial situations. In other words you are not alone in such kind of situation.

Tips to buy a house with Bad Credit

It is not only you and your spouse who are struggling to buy a house because of bad credit. Here are some options you can choose from when your spouse’s credit is not desirable.

1. Buy the house together: If you buy it together, you can set aside the bad credit of your spouse. This is an option which will charge you high interest rate and no financial expert would advise anyone to choose this option but this is just one way for you to buy a house.

2. Buy it alone: If your spouse’s credit is bad but yours is good then buy it using your own credit. This will be easier for you to get a loan because of your good credit record. The amount of loan will be based on your income and available cash.

3. Loan granted with no verification of income: This is an option where the single income of the one who has a good credit record or the bad credit record of the participating spouse are not the basis for granting the loan. This type of loan, however, requires a large down payment ranging from 25 to 30 percent of the principal. The bad news is this option eliminated because of the financial collapse.

4. Replacement of “Bad” Credit with “Good” Credit: A third party can help a couple to buy a house. Usually one of the parents with excellent credit rating can replace the spouse with a bad credit. The third party is required to co-sign the couple’s house loan.