Home equity is defined as the market value of a property. minus. the amount owed on mortgage debts. Since homes are the biggest asset that most...
Home equity is defined as the market value of a property. minus. the amount owed on mortgage debts. Since homes are the biggest asset that most...
View Housing Market Watch RSS feedFalling prices are eroding the value of U.S. homes. According to a new Fed report, the equity that Americans have in their homes has dropped to the lowest level on record.
BY PAT SUMMERS
Home equity is defined as the market value of a property minus the amount owed on mortgage debts.
Since homes are the biggest asset that most people have, equity is pretty important. Unfortunately for the American people, home equity is a dwindling resource.
A Federal Reserve report released Thursday shows the amount of equity held by U.S. homeowners slid to 46.2 percent in the first quarter of 2008--the lowest percent on record.
Equity has been on the decline since the housing boom. Although home prices were rising at the time, there were a lot of homeowners who took advantage of lines of credit and cash-out loans.
Mortgage debt rose to historic proportions during this period and is still rising despite the presence of a full-blown credit crunch. During the first quarter of 2008, Americans' mortgage debt increased from $10.53 trillion to $10.6 trillion.
Rising debt and vanishing equity has contributed to an underwater mortgage phenomenon.
An estimated 16 percent of people with mortgages have little to no home equity left, according to Moody's Economy.com. By 2009, one in four mortgage holders will owe more on their home than it is worth.
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Source: Zillow.com
Homeowners with new mortgages are suffering the worst. At the beginning of 2008, 39 percent of the people who bought a home in 2006 were underwater in their mortgage. Thirty percent of those who bought in 2007 were in the same predicament.
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Source: Zillow.com
Negative equity rates are highest in bubblicious states like Nevada, California, Florida, and Arizona. A whopping 77 percent of the people who bought a home in Stockton, California in 2007 owe more on their home than it is worth today.
In many of these cases, negative equity problems can be traced back to the origination of the mortgage. Between 2006 and 2008, median down payments were between zero and 5 percent in boom states like California.
A lot of buyers (and lenders) gambled on the market, thinking that home prices would continue to rise--despite all evidence to the contrary. The conditions that we are seeing now are a direct result of their follies.
A brief introduction to home equity lines of credit, including how they operate and for who should get one.
A brief introduction to standard home equity loans, including their specifications and benefits.
The new home price data released this week shows a historic drop in home prices. The negative declines are eating into equity across the country. An estimated 30 percent of U.S. homeowners are expected to be underwater by 2008.
Cash out refinancing can get you cash for home improvements, college tuitions, debt reduction, etc. This article offers information about how to use your home equity to get some fast cash and provides advice on when to take advantage of cash out options when refinancing your existing mortgage.
When choosing the right home equity loan, homeowners also need to choose the right home loan lender who meets their financial needs. Researching and comparing loan lenders is part of this process. Read this article to find out what questions you should be asking lenders that you're interested in.
After buying a home, the next thing homeowners are probably thinking of is how to pay off their mortgage early. When the bank sends a letter about equity enhancement programs, homeowners may think they've found their answer, but can these equity enhancement programs be really as good as they sound? Read this article to learn how these financing programs stack up.
People often equate gated communities with heightened home security, but is it really enough?
Are you looking for a way to improve the exterior appearance of your home and you want to do it yourself? Read this article to learn the details about attaching siding to your home.
Many people may be losing their homes to foreclosure because of legitimate financial crises, but there are even more people losing their homes because of lender follies as well as their own greed and stupidity. Here are five stories in particular that will be sure to induce fits of eye-rolling.