The idea of being upside down on a vehicle is not that new. This commonly occurs when a consumer makes the decision to purchase a new vehicle before they have paid off their existing vehicle. As a result, the balance of the loan on the existing vehicle is added to the note for the new vehicle. The result is that the consumer owes more on the new vehicle than it is actually worth.

Today, many consumers are finding they are now upside down on their mortgages. Unfortunately, this did not occur because they bought a new house and added in the cost of their old home to the new mortgage. This situation occurred in many cases because of the rapid rise of home values in many areas followed by the real estate market crash that sent home values subsequently spiraling downward.

In many markets, especially in California, the majority of homeowners are now actually upside down on their mortgages and that number is increasing rapidly. A large number of these homeowners are consumers who purchased their homes at the peak of the boom. During that time home values doubled and even tripled within a short period of time in many areas. This situation leaves many homeowners wondering what they should do. Options are often based on whether the homeowner is able to continue making their monthly mortgage payments. While some are able to pay their monthly mortgages, especially if they have a fixed rate mortgage, that is not the case with others who took out adjustable rate mortgages.

Homeowners who can still afford their monthly mortgage payments and who are not feeling the pressure to sell due to employment reasons may find they are better off by riding out the market decline. There is a wide belief that once the market bottoms out it will begin to rebound. If that occurs, these homeowners could still be poised to make a profit on their home once the market does rebound.

Other homeowners are not so fortunate; however. In some cases, homeowners simply have no choice but to move now rather than wait as a result of relocation or job loss. Homeowners who have adjustable mortgages may also find they are simply no longer able to afford their mortgage payments as they continue to rise. These homeowners are now facing the bitter reality of foreclosure when they are not able to pay off their debts or refinance their home loans because of tightening loan restrictions.

Homeowners are also facing the reality that their options are reduced because they have little if any equity in their homes. The amount of equity that a homeowner has in their home is often determined by the amount of their down payment. During the housing boom it was quite common for many buyers to purchase homes with very little, if any, down payment. At the time it seemed like a good deal; however, today it is causing significant problems as housing values continue to decline.

This situation is causing further problems for homeowners who would like to take out home equity loans either to make necessary home improvements or to consolidate higher interest debts. Even if they are among the few homeowners who do have equity in their home, they are finding that lenders are increasingly wary of making home equity loans. Just as the default rate on mortgage loans have increased, so has the default rate on home equity loans. Quite simply, lenders are no longer willing to take on risk when they are already holding a number of defaulted loans.

The ability to refinance has also dwindled in many locations. Not only are loan guidelines becoming stricter but most homeowners who are upside down are frequently finding the lower value of their home makes it nearly impossible to qualify for a new loan. In essence these homeowners now have negative equity and lenders are simply not willing to take on that risk.

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In some areas renters are also experiencing problems as a result of the housing market crash. This has been quite a surprise for many people because they thought they were immune to the housing crash because they had not taken out a mortgage. At the time, this seemed to be a safe strategy. Many people assumed they were doing the safe thing by waiting to purchase a home until the housing market stabilized.

Many renters in some areas are quickly discovering they are not immune to housing problems after all. One of the most common problems is the fact that while renters do not have a mortgage on their property, their landlords do have a mortgage. If the landlord is not able to make their monthly mortgage payments due to rising interest rates and adjustable rate mortgages, the rental property could very well go into foreclosure.

When that happens, renters could find themselves facing eviction. In some cases, renters have discovered they had only 30 days to leave properties they had rented for quite some time. This has placed a tremendous amount of stress of many renters as they struggle to suddenly not only locate a new place to rent but also to come up with the cash necessary to make rental deposits.

In other cases renters have been affected by rapidly rising rental prices. Nationally, rental prices have begun to rise. Currently, the worse places to rent because of rising rental prices are San Francisco and New York. Seattle, San Jose and Cleveland are also showing signs of rising rental rates. San Bernardino and San Diego are not far behind, either.

One of the reasons that rents are rising in these locations is the fact that developers have not been able to construct as many new apartment buildings. In highly populous areas this has resulted in a large demand with little supply. When supply is not able to keep up with the demand, the natural result is rising prices. To make matters worse, rapidly increasing numbers of former homeowners are either selling their homes as a result of the housing crash or being forced out of their homes due to foreclosures. They must have someplace to go and renting is often the only viable option for these individuals and families, further increasing the demand for rentals.

Overall, the national vacancy rate for rentals has declined more than 10% in the last four years, clearly indicating that more people are renting properties today than they were right before the housing boom of 2005. Nationally, rents have also risen 14% over the same time period, as reported by the Census Bureau.

A number of factors have contributed to the rising rate of rental prices. One of the most important factors that have contributed to rising rental rates is the fact that more and more renters are waiting for the prices of homes to drop before they make the decision to purchase. Many renters are assuming that home prices have not yet hit the bottom. For these renters, it just simply does not make sense to buy right now. Quite simply, most renters do not want to find themselves in the same financial troubles that many homeowners have been subjected to in the last two years.

There is also the fact that even buyers who would be willing to buy right now are simply not able to do so because of difficulty in qualify for affordable mortgages. Following the collapse of the subprime market, many lenders have tightened restrictions and now requesting not only good credit but excellent credit. Requirements for larger down payments have also increased, making it increasingly difficult for first-time home buyers to realize their dreams of home ownership.

The health of the rental market is being eyed with some concern due to the fact that the rental market actually has a strong impact on other sectors. The construction of apartment buildings, for example, is frequently affected by the health of the rental market.

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When it comes to owning property many people around the world will tell you that this is a lifelong dream. While once an opportunity that seemed to be reserved for either the wealthiest or the most miserly among the general population home ownership is now something that is accessible to a larger segment of the population than ever before.

This is good news for many but for some can lead to confusing encounters with mortgage brokers and serious sharks along the way. The best advice that anyone can give someone attempting to embrace the dream of real estate ownership is to deal with a reputable company when it comes to obtaining a mortgage. Even when dealing with reputable lending companies you must watch out for those who do not have your best interest at heart.

If you would like some very practical advice when it comes to getting a mortgage, then you are at the right place. First of all, avoid lenders that are encouraging you to take a loan for more money than you are comfortable repaying. Foreclosures are at a record high when it comes to the mortgage industry at the moment because of predatory lending practice on behalf of some mortgage brokers. These practices include convincing people to borrow more money than they could realistically hope to pay over time and have any quality of life as well as convincing homebuyers to take out adjustable rate mortgages in the beginning in order to procure lower rates.

Shop around before you decide to buy when it comes to mortgages. This doesn’t mean to actually apply for mortgages all over town but do the research and compare rates before applying with any one company. Talk to several different brokers and find out what they have to offer you that the other company down the road cannot or will not offer. Keep in mind that mortgage companies will offer everything under the sun from free toasters to free vacations in order to get you to go with their company. The proof is in the terms however. It is simply not worth that free toaster if you are going to end up paying a 6.9% interest rate instead of a 5.9% rate. You will have paid for that toaster many times over in the process of paying the mortgage.

Even after you’ve applied for a mortgage, if the deal seems to be going south check out your other options. There are all kinds of problems that crop up along the way. You are not marrying the mortgage broker. Nine times out of ten you aren’t even making any sort of commitment at all to your mortgage broker. You will however be living in the house you select. If there is a problem with the mortgage company for the specific home you want do not hesitate to change in order to get the home you desire for your family rather than allowing the mortgage company to dictate what kind of home you can buy.

I mention this because we had a very similar problem when we purchased our turn of the century home. The mortgage company didn’t think the home was worth the risk because of its age. We saw the beauty and the potential in our home that is coming along quite nicely and managed to be approved and financed in short order with another mortgage company. If this was the case in our situation, chances are that it will work for others as well.

In all honesty, it is nearly impossible to buy a home in this day and age without taking out a mortgage. It is best however if you see the process as a learning experience rather than an abject lesson in intimidation. This is your home and your money that will be spent in order to purchase the home. You are asking them for a loan but quite frankly, they need your business. Do not hesitate to shop around for the best deal with a mortgage just as you did when finding your home.

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In some of the worst housing markets in the country, deflation has reached double-digit proportions. While housing woes have reached around the country, California appears to be poised to rank among the worse. One of the primary reasons for this is the fact that in the last several months California has experienced the largest rate of deflating home prices. In fact, home prices in California have fallen at levels that have been unprecedented.

Miami, Florida has also proven to be a difficult market at the moment. Here, the weak mortgage market and record high rates of foreclosures have let to decreasing home values as well. In fact, Miami has been among the worst home markets in the country for two years running. The condo boom in Miami just a few years ago has fueled further problems that have now spiraled into a massive real estate bust.

While Florida and California may have been easy to predict as being among the first housing markets to crumble when the real estate market crashed, there are other markets that are on the precipice of falling which have not been as easy to predict. One of the primary reasons that Florida and California were poised to fall so rapidly were rapidly escalating home values during the boom a few years ago.

Other markets; however, did not rise as much or as quickly, which could be one reason why they have managed to avoid reaching the top of the list; at least until now. These markets include Arizona, Nevada, Indiana and Massachusetts. Declining home prices as well as high rates of foreclosures in these states are also contributing to their worsening real estate market conditions. In Michigan, where layoffs have been significant, the economy is playing a strong role.

Problems are expected to grow worse in many markets as several million adjustable rate mortgages are scheduled to be reset in the coming months. As these mortgages are reset, it is logical to assume that even more homeowners will find themselves facing the reality of being unable to pay their monthly mortgage payments in certain markets. When that happens they will be forced to either face foreclosure or in some cases make a short sell on their home as refinancing is becoming less and less of an option for many homeowners.

According to most statistics, the remainder of 2008 is still poised for problems in the housing market. Many statistics indicate that home values could continue to drop and new homes could experience a loss of up to 18% before the year is out. While there are some indications that the market could begin to level off at the end of 2008 or the beginning of 2009, many experts are quick to warn that when the market does begin to rebound it will not reach the point where it left off. In comparison to the housing peak of 2005, the rebounded market could still be quite a bit lower. Part of the reason for this is that in many areas, prices escalated so quickly that there is simply no way for prices to rebound back to that point.

Still, there may be some home for certain areas. In many markets sub-prime mortgages have either left the market through quick sales or foreclosure. The stimulus package that is on the horizon is anticipated to help the housing market in many areas.

First-time home buyers may soon find the relief they have been seeking since they were forced out of the market; however, it may longer before homeowners begin to experience that same kind of recovery. This is because most homeowners are still reluctant to sell and lose the equity they once had in their homes. The simple fact is that many homeowners have yet to accept the fact that they can no longer get the same prices for that was possible just a few short years ago.

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The first signs of the impending real estate crash were noticed in 2005. In 2007, the market began to tumble and since that time literally thousands of brokers and bankers involved in the mortgage industry have gone out of business. Despite the dire conditions of 2007; however, signs indicate that the national market could fare even worse during 2008. Many experts in the industry are specifically concerned that the number of home foreclosures will rise dramatically and commercial real estate will become pinched even worse than in the preceding months.

While this news is certainly disturbing, it is important for homeowners as well as home buyers to understand that there are steps they can take to help protect themselves from the impending real estate crash in 2008.

First, make sure you understand exactly what kind of mortgage loan you have and the implications of your mortgage type. While adjustable rate mortgages were certainly attractive a few years ago because they allowed homeowners the benefit of lower interest rates, today they are a disaster waiting to happen. If you have an adjustable rate mortgage, it is essential that you consider obtaining a fixed rate mortgage.

If you have your house on the market and are experiencing difficulty selling it, as is the case with many sellers, recognize the fact that you may need to make some concessions on the terms and/or the selling price. The market is rife with inventory right now and buyers are able to choose what they want and on their own terms. If you want to be one of the sellers that is successful in selling their home, you will need to lower the price and possibly even toss in a few extras to move your house off the market. If you cannot lower the price, think about whether you might be better off financially to rent the home over the course of the next two to three years.

The impending real estate crash will also most certainly impact prospective buyers as well. While there is a tremendous amount of inventory currently available and prices are lower than they have been in several years, it certainly appears as though there will be even more price reductions throughout the remainder of 2008. In some areas, prices could go drastically lower. This means that if you can wait awhile longer to buy a home you may be able to take advantage of even lower prices.

As a buyer, you also need to make sure you give careful thought and consideration to the type of mortgage loan you take out to ensure you do not become caught up in the real estate crash. If you are a first-time homebuyer and/or you have a credit rating that is less than favorable, it is a good idea to consider taking out a FHA mortgage. If you are a veteran, a VA mortgage is also a good option. Both of these types of mortgage products offer terms that can be more attractive in the current market than other types of mortgage products.

Keep in mind that while there are still numerous ?no cost? mortgage loans being advertised, it is imperative that you research such mortgage offers carefully before you try to take advantage of one. In most cases, there is really no such thing as a ?no cost? loan. The costs are usually added back into the mortgage and that means you will be paying them off at a greater cost over the term of your loan.

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While there are few markets in the country that have managed to survive the current housing market without any battle scars there are some markets that have experienced more serious issues than others. Two of the worst markets in the United States at the moment are Cleveland and Detroit; however, they are definitely not alone when it comes to markets that are falling with no end in sight any time soon.

By and large, the riskiest markets at the moment are those that are experiencing the highest rates of foreclosures. Other factors that are contributing to problem areas include high rates of job loss and slow job growth. Markets in which the number of homes for sale is rapidly rising are also experiencing significant problems. Rapidly rising property values just a few short years ago is also proving to be a stumbling block for many markets.

During the housing boom these markets commonly experienced property value increases of two-fold and even three-fold in many cases. Once the boom ended; however, these markets began to fall and as of yet, they have not hit the bottom. These markets are also at greater risk for problems due to the large presence of adjustable rate mortgages.

During the housing boom, as prices were escalating quickly, buyers frequently took advantage of adjustable rate mortgages to obtain even lower interest rates to make their housing payments more affordable. This was quite common in areas where first-time home buyers were struggling to afford the rapidly rising prices of homes.

The subprime mortgage market is also more highly concentrated in these areas of the country. Lower interest rates at the time prompted many people to rush out and buy homes. Unfortunately, the credit profile of many of these buyers was less than sterling. Mortgage loans made in these markets during this time frequently involved subprime, adjustable rate mortgages. As the market began to fall, interest rates began to increase. Today, those same homeowners are finding they can no longer afford their mortgage payments. The result? Foreclosures have risen sharply in market areas where the boom once allowed housing values to double and even triple practically overnight.

Economic conditions in many areas have further fueled the crisis. As the number of layoffs increase, the number of foreclosures and homes for sale seem to increase as well.

At the moment, the ten worst housing markets in the country are Sacramento, New Orleans, Detroit, Riverside-San Bernardino, Las Vegas, Tampa, Miami, Cleveland, Phoenix and Jacksonville, Florida.

Sacramento, considered to be among the top ten of the worst housing markets, has experienced a drop in homes prices that is well above the national average. Like many other housing markets in similar situations, Sacramento fell victim to a fast paced market and subsequent plummeting pricing. Today the median home price for homes in Sacramento remains far above other markets in the country, despite the worsening situation. Given the large number of houses on the market; however, this is far from good news.

In spite of the situation in Sacramento; however, it is definitely not the worst case scenario at the moment. That honor goes to Detroit, where market prices have experienced a drop of more than 7%. The key factor in Detroit is the massive amounts of layoffs stemming from the auto industry. Matters are not much better in Cleveland where median prices have also dropped by several percent and inventory continues to rise.

While these markets are not showing any signs they will rebound in the near future; there are some markets; however, which are actually posting increases. Seattle is one such market. Median home prices in Seattle have actually risen almost 9% in the last year. Other cities on the rise include Raleigh and Charlotte in North Carolina as well as San Jose, California. San Francisco is not far behind, garnering an increase of more than 7% in the last year.

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