Foreclosure Prevention

Rental prices in Florida are on the rise even as home prices are becoming for affordable. The Center for Housing Policy recently released its findings on a comparison study of the Florida metropolitan area between 2007 and 2008, called "Paycheck to Paycheck: Wages and the Cost of Housing in America." The main culprit is hard to pinpoint, but many analysts believe it is the rise in foreclosures and unemployment that is pushing people who can no longer afford homes into rentals.

Rents Go Up with Demand

Because the demand is now greater for renting, prices have gone up to reflect it. But it's not just Florida. The same increase in renting is affecting the entire country, as most major metropolitan areas have experienced at least a slight increase year over year. Here is an idea of rental costs in several major cities in 2008 compared to the previous year.

• Fort Lauderdale: Average monthly rent, $1,313 (#13 most expensive city to rent in; it was #27th in 2007)
• San Francisco: Average monthly rent, $1,658 in 2008 (#1 most expensive city to rent in)
• Honolulu, Santa Cruz, Suffolk-Nassau, and Santa Ana followed San Francisco as the top 5 most expensive cities to rent in

Lower Home Prices Good News for Some

The continuing decline in home prices has dramatically lowered the price of home ownership. According to one analyst, the national average income required to buy a median home was only $60,000 a year. Local markets are drastically different however, as Market Watch noted it required only $24,000 a year to buy a home in Youngstown Ohio, while a home in San Francisco would require an annual income of $187,000.

Homes in areas hardest hit by foreclosures and unemployment have become even more affordable. In Oakland, Modesto, Stockton, Salinas and Merced, California, home prices were cheaper by 47-54% compared to the previous year. Analysts were quick to point out that the decline in home prices is still not enough to resolve the country's real estate woes. Contractors and other professions who thriving as a part of the stimulus bills still have trouble affording their rent each month, and something must be done in order to address the real issue affecting the economy: unemployment. As home prices continue their downward slide and mortgage rates hold at low rates, there will be a point where the bottom will be reached and homes will become affordable again. There are only two ways to solve this crisis. Either home prices must drop to correspond with salaries, or everyone will get a 100% raise and unemployment must slow. Which do you think will happen first?

Can people you know now afford to buy homes when they were priced out in 2007?

The nation's economy is in serious, serious trouble. Unemployment rates are shooting up every month, and no one can say with certainty that their jobs are absolutely assured. So that means people, even those who are still lucky enough to have their jobs, are looking for ways to save money wherever possible. One of the first places where a homeowner will start looking for savings is their mortgage, by refinancing their mortgage with a new and better rate.

By calculating your refinancing opportunities, you will have a better understanding of how different refinancing scenarios will play out in terms of saving you money.

A good rule of thumb when it comes to calculating refinancing of monthly payments is to explore ten or so different scenarios. The mortgage refinancing rates you come up with will give you a sufficient picture of what your savings will look like.

For example, let's say you have a mortgage. To determine what refinancing your mortgage could end up saving you, experiment with the different aspects of your loan, such as the time terms. Start the ball rolling by finding a mortgage calculator online. Very handy, these mortgage calculators allow you to enter in different numbers in order to quantify any refinancing plan you may be thinking of. Then ask yourself questions that could affect your monthly mortgage payments.

Some questions to consider are:

• If you get a new 30-year mortgage, will it reduce your monthly payments?
• Do your monthly payments fall if you enter a new loan maturity date?
• If, on the other hand, you can put more money into your monthly payments, will it reduce your interest rate, and thus save you money in the long run?

Another option could be to make an annual payment - apart from your monthly payments - that goes to reducing your overall loan amount.

Before you calculate refinancing monthly payments, consider all your personal financial obligations so that you are confident about what you can and cannot afford and then ask the financial representative what your options are. The financial representitive will be able to give you tips and suggestions that could make your refinancing experience a smoother and easier one. You may even find that your current mortgage payment plan is actually the best one for your financial needs, but experimenting with different payment scenarios is certainly worth your time.

You should consider refinancing when you can get a lower rate on your existing mortgage. This can happen when market rates move down. Or when you increase your income or credit rating . Or perhaps when you simply found a better deal in the market.

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