I heard back from my loan officer today. If you didn't see the post last week, I am currently in the process of trying to refinance my mortgage. The only thing causing a delay in the refinance is the home appraisal.

When I purchased my home in March 2006, I paid $189,140. One of the selling points the Realtor used was that I would have "instant equity". I was buying into a brand new subdivision and they were still building homes. My home was the last inventory home and the price for new homes with my same floor plan would be increased to $199,000 and above. For the first year and a half, it would be nice to pull into my subdivision and see the signs out front saying "New Homes - From the Low 200's". I'd smile and think of how I paid almost $10,000 less for my home; in just a couple of years, after making extra principal payments and the home appreciation, I'd have over $20,000 equity.

Fast forward three years to today. My neighborhood remains unfinished. I would probably say the builder finished about 75% of the planned homes. We aren't sure if the builder will finish the subdivision or sell the remaining empty lots to another builder. They closed the office/model home last week and the sign out front now says, "New Homes - From the $170's".

So how much did the mortgage lender say my home appraised for? How about the absolute highest value the appraiser could find was $175,000. Thanks to several foreclosures in my neighborhood and the crappy housing market, my home is now worth about 7.5% less than I bought it for. I know that some parts of the country have experienced double digit decreases so I can't complain too much but it is still frustrating as hell!!

The only positive thing is that I don't need to sell my house anytime soon. Hopefully, within the next 2-5 years, my home will be worth more than I originally paid.

Have you recently tried to refinance but couldn't because your home value has fallen?

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With all the news about the rising number of foreclosed homes and rising rent prices, if you are any the market for a new home, now seems like a great time to buy a home. Not only is there a wide variety of homes to choose from, prices have continued to fall to more affordable levels.

For current homeowners that need to sell their home, times are really hard right now. If you are currently in the market for a new home, right now, you hold all the cards. Hopefully, by the time I am ready to sell my home and move on, the market will have started on the road to recovery.

Buying a home is probably the largest purchase you'll make in your lifetime so it is important to do it right. There is more to home buying than whether or not you want to live in a certain school district or if the home is on a cul-de-sac. Of course those things are important in determining whether or not you purchase a home but they should come after the financial aspect is taken care of.

Before you make to leap towards homeownership, ask yourself these five questions:

1. Is your income stable? If you don't feel your job will be there tomorrow, now is probably not the time to buy a home.

2. Do you have a downpayment? With all the instability in the housing market, mortgage lenders are requiring more money down before you are approved for a loan. These days, it will be extremely hard to obtain 100% financing for your purchase, even with an excellent credit score. After this housing fiasco, lenders want to limit the amount of risk they expose themselves to. If you put 20% down on a home, you are less likely to walk away from it because you have more to lose.

3. How's your credit? You will have a hard time getting a decent interest rate or even getting approved for a loan if you don't have a pristine credit score. These days, you will need to have a minimum credit score of 720 to get the best rates. Hint: If you are planning to purchase a home, start monitoring your credit six months to a year prior to your purchase. This way you have time to correct any errors and allow your credit score to recover. Equifax offers a service that will monitor all three bureaus for you and alert you to any changes.

4. How's your debt? Is your debt load hovering in dangerous territory? After you make your debt payments, do you barely have enough money to live in? If you answered yes to either of those questions or had to think about the answer, you probably need to wait until you've eliminated more debt before you consider purchasing a home.

5. Are you stable? If you don't plan to stay in your home at least three to five years, it is probably better to wait before purchasing a home. Typically, it takes about three to five years to recoup the cost from buying and selling a home.

6. Savings. Not only will you need to have money saved for your down payment and closing costs, you will also need to have money saved for the additional items you will need after you purchase the home. For example, when I bought my home, there were no blinds in the home and no towel or tissue paper holders. There were no ceiling fans in any of the rooms. Just purchasing those needed items cost me almost $1,000. You will also need to have an Emergency Fund in the event of a job loss or medical issue.

7. Are you ready to be your own landlord? In an apartment or other rented property, if something breaks, all it takes is a call to the landlord. The landlord owns the property and is responsible for the cost of repairs. Your cost is usually only a minor inconvenience. Once you are a homeowner, there is no one to call. Any costs related to home repairs are your responsibility.

Here are a list of financial resources that can help with your decision:
How much home can you afford?
WT Direct - High Yield Savings
Equifax Credit Watch Gold

Find someone to go in that new home with you!

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There is a lady in my neighborhood who keeps me abreast of everything that is going on in the neighborhood. She is 71 years old and retired. She has a dog that she walks all the time so she manages to find out about anything that is going on. It's amazing the things you can find out when you walk your dog a few times a day. She is a feisty lady and doesn't mind asking whatever is on her mind or giving you a few choice words if you disrespect her. She's had a few confrontations with some of the homeowners who fail to pick up after their dog or park their cars in the street.

She told me yesterday that ANOTHER home in our neighborhood is going into foreclosure. This one is particularly disturbing since they were the last one in my section of my neighborhood to buy their home. They bought the home a little over a year ago and they are now in foreclosure.

According to county tax records, they paid $201,000 for their home. The home is the same floorplan as mine and I paid $189,000. When I got ready to sell my home, I was counting on this home being a nice comparable. Not anymore. The home is now on the market for $159,900.

I'm curious as to why they lost the home so quickly. I've never talked to them in person. The most I've ever interacted with them was a friendly wave as I pass by. Did one of them lose a job? Was there a medical condition that they took all of their money? Could they just not afford the payments? Or was it because of the new Acura RL they bought 3 months ago?? According to Edmonds.com, the car has a MSRP of $46,280.

Related Posts:
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No Longer Worried About My Home Value
The Real Cost of Home Ownership

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Every day that I watch the news, I never fail to hear a story about the struggling housing market. If I were to worry myself every time I heard the bad news, I would probably make myself sick. Every time I hear a report on the poor housing market, I used to start visiting different home valuation sites to see how my home value has changed. I would get stressed out every time I saw that the value had fallen.

As the title says, I am no longer worried about my home value. I realized a lot of the problems going on in the housing industry has the most affect on current homebuyers and current sellers. If you are trying to buy a house right now, you have a great selection to choose from but you have to be more financially qualified to borrow the money for your purchase. If you are trying to sell a home right now, you have a lot more competition in the market and fewer financially qualified borrowers. It seems that if you were to visit a random subdivision, you will see a lot of homes with “For Sale” signs in front of them.

Why am I no longer worrying about my home value? I am not in the market to buy another home and I am not ready to sell my home. My home is perfect for me right now and should be for the next few years. My home is serving its purpose as a place to lay my head. Thankfully, I'm not having a problem making my mortgage payment each month. I have no plans to change jobs or move right now. I have no plans to start a family anytime soon so I don’t need any additional space.

The latest reports indicate the housing market should start to get better in a year or two. According to a friend of mine who is a real estate agent, things in the Atlanta area are not as bad as the media is making it seem. As he always tells me, real estate is local. The real estate in California is different from the real estate in Georgia. Of course, there are certain areas in Atlanta that were hit a lot harder by subprime loans.

There you have it; I’m no longer worried about my home value. I’ll still check it every few months or so just to update my Net Worth statement but that's it.

What about you? Are you worried about your home value? Are you currently selling a home or looking to purchase a home?

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Real Life Example of the Sucky Housing Market

When I went outside to get something out of my car this morning, I casually scanned my neighborhood as I usually do and what did I see? Another house just went on the market. I don't understand why people who don't really need to sell are trying to sell a home in this cluttered, slow-moving market. In addition to that, my subdivision is still pretty new (less than 2.5 years old) and they are still building homes. The new homes they are building are priced a little bit higher than what the original owners paid but they are offering over $15,000 in incentives. Why buy a used house when you can get a new house for less? I've seen some homes sitting on the market for over a year.

Of all the listings in my subdivision, this one interests me the most. The house is on my street, has the exact same floorplan and is the only one like it for sale. The owner is asking $205,000 which is great for me. I paid $189,140 for my house about 2 years ago and I think it is worth about $196,000 with the upgrades I've added. If he manages to sell for $205,000, $200,000 or even $198,000 I'll be doing cartwheels up and down the street (not really). I'll then have an actual comparable home to really find out what my home is worth.

Post Sponsor: America's Lending Partners - Rates have fallen. Refinance your home loan.

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I have 2 coworkers that presently have their homes for sale. I will call them Sally and Mary. Both Sally and Mary's homes have been on the market for over 6 months. Mary has had absolutely no interest while Sally has had several offers. Just recently, Sally finally went under contract. The buyers were preapproved and were making a large downpayment. Since Sally thought her home was sold, she and her husband put a contract on another larger home in great neighborhood and good school district. Everything was going well until the home inspection. There were a few small things that needed to be done before closing. Sally advised the buyers they would not be able to get the list completed in the 2 weeks prior to closing. What did the sellers do? They walked away! With so many homes on the market, why wait for them when they could move on to the next house?

Sally told me they had lowered the home price from the original asking price of $209,950 down to $185,000. They only paid $150,000 for the home three years ago so they were still making money; just not as much as they wanted.

So today, Sally's home is still on the market at 11% less than it was 6 months ago. One the mandate with the realtor is up, she is taking the home off the market and wait a little while.