Housing Market News - It's Not All Bad

The headlines have been full of the still to fully emerge mortgage crisis and the record levels of foreclosures that herald its arrival. While the circumstances are indeed grim for the average homeowner, for the not so average individual, there are opportunities. What differentiates the average individual and the not so average is the amount of debt and the philosophy of spending.

Those who held onto the more old-school style of handling money - avoiding purely consumptive debt and living within their means to the highest degree possible - have the ability to step into the housing market that those who went with the new-school financial methods are being pushed out of. New school influenced financial choices include high credit card debt based primarily upon non-essential consumer debt, taking on mortgages for far more house than they actually need and can realistically afford and, while engaged in those decisions, failing to build up personal savings.

With foreclosures on the rise, and still more people hanging on to their houses, but well aware that they cannot continue to do so indefinitely and looking to get out before any further damage is done to their finances and their credit rating, there are many bargains to be had. While mortgage lending has tightened up, it has not shut down completely.

In fact, the tightening up that we hear so much about is primarily directed at the loose lending, easy money, border-line predatory practices that have been so much a part of the surge in home buying over the past few years. Stated income loans, 100 percent financing, jumbo loans, and other non-traditional financing options are becoming less available, and those with credit challenges of one sort or another are having to work a bit harder to find affordable loan options. However, there are still financing opportunities available, even for those with bad credit or no credit.

Those who have spent recent years operating in the old-school style of managing their personal finances are likely to have cash to work with and to be able to put provide a significant down payment for their real estate purchase. They are also likely to have the credit scores that will help them to get a mortgage with workable terms and conditions. For that matter, these not so average folks may even be able to avoid a formal mortgage all together and take advantage of the numerous opportunities popping up throughout the nation in which the owner is willing to hold the mortgage.

That doesn't mean that those who have been more new-school with their finances are banished from the housing market. What it does mean, however, is that they may have to work a little harder to catch up economically to their more traditionalist counterparts. Part of that will be reassessing their current lifestyle and their financial priorities, setting new goals and then acting upon them.

For those not currently committed to a mortgage, but hoping to buy a home in the future, that may mean taking a more aggressive stance towards working to reduce credit card and other consumer debt, as well as taking steps to adjust their lifestyle so that they are living firmly within their means to a degree that they are able to build savings, in addition to limiting new debt. That may be a matter of economizing by making more affordable choices, such as a used vehicle over a new one with a monthly payment, of living not just in the now, but with an eye on the future, as well.

New-school influenced individuals already caught up in a mortgage that is becoming less affordable by the month may want to consider downsizing. Perhaps it may be time to set aside the house that meets all the wants and invest in one that meets the needs, while attending to repairing a financial situation that has gotten out of control. Getting the finances back in control will allow those individuals to rebuild their credit ratings and regain their financial footing, which will allow them the opportunity to try again.

While taking advantage of the surge in distress sales and foreclosed homes may sound predatory, it's not. It is simply the way of the market. The situation today is one of natural consequences. Many people made short-sighted mistakes and ill-informed decisions. While certainly there are those who did profit upon those bad choices, the fact of the matter is that the bottom-line responsibility lies with those that signed on the dotted line. Those not so average individuals that made financial decisions that worked out more favorably have earned the opportunities that they have today.