PMI Insurance-The One Expense Buyers Underestimate

Sixty-five percent of home owners with private mortgage insurance say that the additional cost of PMI prompted them to pay a higher monthly mortgage payment than they had originally expected, according to a new survey released by TD Bank of more than 2,000 Americans who purchased a home in the past 10 years. 

"PMI has had a definitive impact on many home buyers – including making them rethink or delay the purchase of a home in light of not being able to meet monthly mortgage payments," says Michael Copley, executive vice president of retail lending at TD Bank.

Borrowers are required to get PMI if the loan exceeds 80 percent of the home’s value. The insurance protects the lender in case the borrower defaults on their loan. 

Many buyers say that PMI has an impact on their home purchasing decisions. For example, 35 percent of people who purchased a home in the past two years said that PMI influenced their decision of which house to buy. Also, 53 percent reported facing a negative impact due to the additional cost of PMI. About 40 percent of those surveyed said that having to pay PMI forced them to curtail small and daily purchases or larger household purchases. 

The survey showed that PMI is fairly common: 37 percent of those who purchased a home in the past 10 years said they were required to have PMI, and 43 percent in the past two years. Forty-five percent of home owners aged 18 to 34 years old have PMI; 37 percent of home buyers aged 35 to 54 have it; and 23 percent of people older than 55 had required mortgage insurance on their loans over the past decade, the TD Bank study found. 

On average, home owners reported that PMI cost about $100 extra a month, according to the study.

Things To Consider When Buying a Short Sale

By preparing for a real estate short sale, you can emerge with a great home at a favorable price.

When sellers need to sell their home for less than they owe on their mortgage, they’re shooting for a short sale. Short sale homes can sometimes be bargains, but only if you do your homework, stay patient, and remain unemotional during the sometimes lengthy and difficult short sale process.

Here are six tips for protecting yourself emotionally and financially when bidding on a short sale.

1. Get help from a short sale expert

A real estate agent experienced in short sales can identify which homes are being offered as short sales, help you determine a purchase price, and advise you on what to include in your offer to make the lender view it favorably. Ask agents how many buyers they've represented in short sales and, of those, how many successfully closed the transaction.

2. Build a team

Ask agents to recommend real estate attorneys knowledgeable in short sales and title experts. A title officer can do a title search to identify all the liens attached to a property you’re interested in. Because each lienholder must consent to a short sale, a property with multiple liens, like first and second mortgages, mechanic’s and condominium liens, or homeowners association liens, will be harder to purchase.

A title search may cost $250 to $300 up front, but it can help weed out less desirable properties requiring multiple approvals.

3. Know the home’s fair market value

By agreeing to a short sale, lenders are consenting to lose money on the loan they made to the sellers to purchase the home. Their goal is to keep those losses as low as possible. If your offer is dramatically less than the home’s fair market value, it may be rejected. Your agent can help you identify the price that’s good for you. The lender will determine whether approval is in its best interest.

4. Expect delays

There are two stages to a short sale. First, the sellers must consent to your purchase offer. Then they must submit it to their lender, along with documentation to convince the lender to agree to the sale.

The lender approval process can take weeks or months, even longer if the lender counteroffers. Expect bigger delays if several lienholders are involved; each can make a counteroffer or reject your offer.

5. Firm up your financing

Lenders will weigh your ability to close the transaction. If you're preapproved for a mortgage, have a large downpayment, and can close at any time, they’ll consider your offer stronger than that of a buyer whose financing is less secure.

6. Avoid contingencies

If you must sell your current home before you can close on the short-sale property, or you need to close by a firm deadline, your offer may present too many moving parts for a lender to approve it.

Also, consider ordering an inspection so you’re fully informed about the home. Keep in mind that lenders are unlikely to approve an offer seeking repairs or credits for such work. You’ll probably have to purchase the home “as is,” which means in its present condition.

This article includes general information about tax laws and consequences, but isn't intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

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Is A Fixer Upper Really For You?

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.

Trying to decide whether to buy a fixer-upper house? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house. 

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

• Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

• If you’re doing the work yourself, price the supplies.

• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs

• Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it'll cause problems when you resell your home.

• Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

• Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don't purchase a home that needs major structural work unless:

• You’re getting it at a steep discount

• You’re sure you’ve uncovered the extent of the problem

• You know the problem can be fixed

• You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.

• Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

• Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation. The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans. A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair. 

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

• Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.

• Radon, mold, lead-based paint

• Septic and well

• Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

Reason To Own A Home #14

If you want Red, paint it RED!!!

4 Tips To Determine How Much Of A Home You CAN Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home's cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.

Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

7 tips For Improving Your Credit

Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.

1. Know your credit score

Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms. 

You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at www.annualcreditreport.com. Review them to ensure the information is accurate.

2. Correct errors on your credit report

If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.

3. Pay every bill on time

You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.

4. Use credit carefully

Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

5. Take care with the length of your credit

Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.

6. Don’t use all the credit you’re offered

Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

7. Be patient

It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.

7 Steps To Take Before You Buy a Home

Most potential homebuyers are a smidge daunted by the fact that they’re about to agree to a hefty mortgage that they’ll be paying for the next few decades. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.

1. Decide how much home you can afford

Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.

2. Develop your home wish list

Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.

3. Select where you want to live

Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.

4. Start saving

Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.

However, the lower your downpayment, the higher the loan amount you’ll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.

Finally, if your downpayment is less than 20%, you’ll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.

5. Ask about all the costs before you sign

A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area—including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.

6. Get your credit in order

A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage.

You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn’t up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.

7. Get prequalified

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.

Reason To Be A Homeowner...Awwwwe

Why You Need A Real Estate Agent

Whether you are buying or selling a home, you need an experienced Real Estate Professional to lead you toward your ultimate goal. In this world of instant gratification and Internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened in recent months with the Federal Government continuing to taper bond purchases and the impact that decision has had on mortgage rates.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

There are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser,there are at least 11 different people, that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” – Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn't hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Buying A Home Easier?

Fannie Mae released their housing survey results.  Two categories reported all-time survey highs.

• 52% of respondents thought it would be easy for them to get a home mortgage today
• 70% of respondents said they would buy if they were going to move

Doug Duncan, senior vice president and chief economist at Fannie Mae explained what this may mean to the real estate market moving forward:

“A majority of consumers now believe that it is getting easier to get a mortgage. For the first time in the National Housing Survey’s three-and-a-half-year history, the share of respondents who said it is easy to get a mortgage surpassed the 50-percent mark. The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month’s increase in consumers’ intention to buy rather than rent their next home. The dip in overall home price expectations, though notable, is consistent with our view of moderating home price gains this year from a robust pace last year, while positive trends in perceptions about the economy and personal finances over the next year support our view of stronger growth in the broader economy.”

With home prices projected to increase in 2014 (albeit at a slower pace than they did in 2013) and with mortgage interest rates projected to increase, it is good news that consumers are becoming more confident in their ability to buy a home if they so desire.

What are you waiting for?

SO MUCH PAPERWORK!!!

We are often asked why there is so much paperwork mandated by the bank for a mortgage loan application when buying a home today. It seems that the bank needs to know everything about us and requires three separate sources to validate each and every entry on the application form. Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.

There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history.

1. The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of affording the mortgage. During the run-up in the housing market, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again
2. The banks don’t want to be in the real estate business. Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe heaven triple) check everything on the application.

However, there is some good news in the situation. The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate probably below 5%.

The friends and family who bought homes ten or twenty ago experienced a simpler mortgage application process but also paid a higher interest rate (the average 30 year fixed rate mortgage was 8.12% in the 1990’s and 6.29% in the 2000’s). If you went to the bank and offered to pay 7% instead of <5%, they would probably bend over backwards to make the process much easier.

Bottom Line

Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.

Happy Saturday! Enjoy the day!

Santa Clarita Jazz and Blues Concert Tonight

Don't miss the free concert tonight! Hope to see you there, more information at http://www.valenciajazzandblues.com/

Interest Rates and Lock Extensions

Good Morning and Happy Thursday to you! It has been a pretty exciting and busy week and I want to thank those of you who have entrusted in me to take care of your clients financing needs.

As of this moment interest rates are still where they were yesterday and looking FLAT! So read what I wrote yesterday if you want rates for today.

I am really liking the normal market we are in right now. I will call it normal because it is as close to normal as any market I can remember in the past eight years. So in a normal market there are the challenges of contingent offers and with contingent offers sometimes we have delays. Delays could be caused by the seller, the buyer, the agents (No I did not say that!), escrow, or even the lender. So what happens when a rate lock expires?

• Who is responsible to pay for the rate lock extension? Nobody is truly responsible for a rate lock extension, but somebody has to pay for it.
• Who can legally pay for the extension? Anybody that is a party to the transaction can pay for a rate lock extension.
• What happens to the rate and what is the cost of a rate lock extension? Rate lock extensions vary depending on who the investor is. We have some that will extend for free if the market improves and they will charge .250% if the market is slightly worse or .375% if the market is dramatically worse. We have others that charge .125% for every 7 days and there are many other ways that banks price extensions as well.
• Can the rate go up? Absolutely, but if the lender is using the right investors, then it should not go up.
• Can the rate go down? It could, but only if there is a dramatic move down in the interest rates. Usually we LOCK a loan which means a rate is locked in and changing investors to get a lower rate is going to slow down the process even further. So the answer is a soft yes on a case by case basis.
• What should I watch out for?
• There are so many things to watch out for. There are some lenders that like to profit off of the hardship of others and charge through the nose if a rate lock expires.
• There are some Lenders that have a no extension policy.
• I have seen Lenders that forget to lock and then when the client gets to the close he has a higher rate.
• Lenders can be like contractors. "Well you are making changes so we need to charge you this much instead of what we said originally!”
• One last thing of note about rate lock extensions: I am too big of a wimp to charge them to my client! I will try to get money from the seller if it is their fault, but I almost always pay for the first 15 days of extensions and when I do that I explain to the client that the next one will cost X and that one is on them if we go that long.

Just remember that a lender you refer is a reflection of you and a lender you don't refer can also reflect badly on you. Be strong, be sincere and let your clients know why it is important to use a professional that you refer. Remember that when you align yourself with the best in the business you will make your business the best!

Home Owners Still Holding Out For Equity

Several reports are showing home equity on the rise. In fact, home owners’ equity holdings at the end of the first quarter amounted to $10.8 trillion – the highest amount since late 2007, according to Federal Reserve reports. That number is below the $13.4 trillion reached in early 2006 during the housing bubble. However, if home prices rise about 5 percent in the next year – which many predict they will – researchers from CoreLogic estimate an additional 1.2 million home owners will regain equity.

While the home equity picture is looking brighter, many owners remain underwater, owing more on their mortgage than their home is currently worth. About 6.3 million home owners nationwide are underwater. On average, they owe 33 percent more than their house would sell for today. For households with one mortgage, the average negative equity balance is about $52,000. The average negative equity for two mortgages is about $75,000, according to CoreLogic.

Being underwater is preventing many from selling. For example, at the end of March, 1.6 million home owners had less than 5 percent of equity in their homes. Many home owners in that position would have to bring money to the settlement table or pay off the debt on their house before they could sell, housing analysts say.

The homes most likely to be in a negative equity position are lower-cost homes, according to research by CoreLogic. About 17 percent of homes costing less than $200,000 are in negative equity positions compared to 3 percent of homes costing more than $500,000.

Not surprisingly, areas that saw some of the biggest drops in home prices during the housing crisis tend to be the areas with the highest concentrated numbers of underwater home owners. For example, 29 percent of homes in Nevada are in a negative equity position; 27 percent in Florida; and 20 percent in Arizona. However, California has fared much better. In some of the state’s counties, home values sank by 50 percent or more during the housing crisis. But the state’s strong housing rebound has put its negative equity picture to just slightly above 11 percent.

Boomerang Buyers Get Second Chance!

About 7.2 million homes have been lost to foreclosure or short sale since the housing crash began, according to housing data from Black Knight Financial Services. That has forced millions of former home owners into renting, as they work to rebuild their credit.

But a government program launched last summer by the Federal Housing Administration is helping these former home owners step back into home ownership in as little as a year after a foreclosure or short sale. The FHA’s Back to Work program allows them to qualify for low interest rates with a minimum of a 3.5 percent down payment. Applicants must show that the main culprit behind losing their home was that they lost at least 20 percent of their household income for at least six months. They also must show they have worked to repair their credit for at least a year.

Lenders are reporting an uptick in boomerang buyers coming in to explore financing opportunities for a home purchase.

"We see a lot of boomerang buyers,” says Matt Weaver, a lender with PMAC Lending Services in Florida. “I'd say about 20 percent of my current clientele has either suffered a short sale or a foreclosure in the past and are now re-buying back into the marketplace."

But while opportunities to apply for a home loan are increasing, some are hesitant to step back in, housing analysts say.

"Based on the fact that the home ownership rate isn't rising again and demand for single-family rentals is historically high, the comeback buyer is not a significant phenomenon in the market," says Mark Fleming, chief economist at CoreLogic. "Given the duration of the recovery, it's likely that many of the initially foreclosed borrowers have repaired their credit and are now creditworthy, but the scale at which they will enter the market is not sufficient to significantly influence demand."

Renting Your Home, Selling Your Home, Or Just To Wow Your Neighbors

Curb appeal and first impressions are important, here are 7 ways to boost your curb appeal.

1. Mulch heavily

You know that flower or shrub bed sitting in the front of your home? You might not be able to force it to bloom (more on that later), but you can still amplify its aesthetics by heavily mulching it at the start of each growing season.

Organic mulches that are colored with vegetable dyes, like red cedar bark, are a double-edged sword. They create the biggest ‘wow' factor, but the color can also fade quickly, especially if you live in an area with plenty of sunlight and rain. Once this mulch fades in color, it loses its charm, causing you to add more.

The solution? It depends on your budget. If you can re-mulch twice per year, feel free to indulge in the nicer varieties. If you're really on a shoestring, opt for something more durable, like pine straw or wood chips, or even entertain the notion of landscaping with small gravel.

2. Create a rock garden

Nothing screams "modern" and "chic" like a contained rock garden. One of the easiest ways to create this is by:

• Setting a border that visually defines an area of your front yard.
• Clearing that defined space of all weeds, leaves and plantings.
• Laying down landscape fabric and securing it into place with pegs.
• Covering the area with a nice-looking gravel, like decomposed granite or Russian river cobbles.
• Placing an odd number of vertical, eye-catching decorations in the center, such as a planter with blooming annuals.

Why an odd number? It's a design hack. Odd increments look more visually appealing. Try either one, three or five planters, depending on the size of your rock garden.

This will instantly upgrade your curb appeal without costing too much money or time. One warning, however: Don't place your rock garden close to any deciduous trees. When trees shed their leaves in the fall, you'll find that they get stuck in the gravel and are nearly-impossible to remove. No amount of leaf-blowing seems to solve the problem. Eventually, these leaves decompose into soil, which then creates a weed problem within your rock garden.

The solution? Be cautious about the placement of your garden, especially if you live in a humid or heavily forested area.

3. Add trim

Beyond landscaping, you can also boost curb appeal by adding an extra layer of trim and molding to the windows and doors.

If you don't want to remove your existing molding, simply add a layer of crown to the top of your current trim. There are hundreds of designs that you can select from, ranging from simple Craftsman styles to more ornate Victorian and Queen Anne motifs.

If you're willing to remove your existing trim, your options really explode. If you want to create an elaborate look, add fluted trim (rather than plain planks), top it with rosettes, and sandwich these between heavy layers of both crown and base molding.

Trim is like adding accessories to an outfit – it can elevate a basic ensemble into something that looks far more expensive than it actually is.

4. Add shutters

Depending on the architectural style of your home, shutters might be precisely the missing component. Historically, shutters were used to protect dwellings from storms (and in some areas, like along the Gulf Coast, they still are), but more homeowners are now using shutters as decorative elements that add texture and dimension to their home's facade.

You can choose from a variety of styles, ranging from more traditional louvered rectangular shutters to the far more decorative arch-top board-and-batten style.

5. Paint your brick

Do you own a brick home? Some homeowners have the good fortune of owning houses that are built from gorgeous bricks, such as old clay-fired red brick from the early 1900s. But if your house is constructed from an unremarkable brick style, try spraying-on a layer of paint.

If you're opting for a modern-yet-classic feel, try painting your bricks white. If you're more daring, consider a shimmery grey texture.

6. Paint your front door

Is your home clad in vinyl siding, rather than brick? Don't worry. You might not be able to paint your vinyl (and replacing it is pricey), but you can still add an eye-catching layer of paint to your front door.

Recently, the "red front door" trend has become popular. If your home bears a neutral color, such as beige or brown, painting your front door lipstick-red can add some contrast and really make your entrance pop.

If that's not your style, try a more muted shade like sea-blue, sage-green or even black.

7. Replace your house numbers

Finally, here's a tip that will improve the look of your home exterior for $50 or less: Replace your house numbers with something that's more stylish or aesthetically pleasing. If your house announces that it's "123 Main Street" with humdrum text, try replacing that numbering with a typeface that's art deco, cursive or a modern sans-serif made from metal.