One of the things that many people are wondering about right now is whether or not a 15 year mortgage is a good idea for them. The interest for 15 year mortgages stems from the fact that mortgage interest rates on these loans is often quite low — still below 5% right now.

A 15 year mortgage loan can save you thousands, or even tens of thousands, on home mortgage loan interest payments over the life of the loan. The downside, though, is that you often have to pay more per month in order to get 15 year mortgage. With the mortgage payments spread out over only half the time as a 30 year mortgage, it is difficult to get lower payments. As a result, you have to be sure that you can afford the payments on a 15 year mortgage.

Another solution to the issue may be to get a 30 year loan, and then pay extra on it each month, as if you were making payments on a 15 year loan. You won’t have as much going to the principal, but you will still be reducing the principal, and paying less money in the long run. And it gives you some breathing room in case something changes in your financial situation. If a payment on a 15 year mortgage would put you at your limit, you should consider getting a 20 year or 30 year loan instead. That breathing room may be important.

I love this. I have no idea whether it’s serious, or whether it is legit. However, it is generally my experience that something that pays you for doing basically nothing. At any rate, I felt it amusing. Would you join the world of The Bar?

Happy Friday!

Mortgage rates continue their roller coaster performance this week. After going up recently, mortgage interest rates are heading lower. Mortgage lenders are once again competing for customers. Subprime Blogger offers this insight on looking for a home loan:

Luckily for most home owners there is great competition out there as far as mortgage lenders.  Once again, you see advertisements everywhere for these companies.  Realize that you can work this to your advantage as you have many options when it comes to refinancing or buying your first home.

Right now, the key is to shop around. You can get the best home mortgage for you without too much trouble if you put a little time and effort into finding what you want, and looking for the best possible mortgage rates. Of course, you do have to realize that if you want the best options available, you will have to show a good credit score, and possibly put something down.

The housing sector has been one of the hardest hit of this recession. Indeed, the drop in the housing sector is one of the main reasons that we ended up with a financial crisis. As a result, it is little surprise that the National Association of Home Builders has shut down its office this week.

NAHB announced the move back in May, and this is just carrying out the plan. It is interesting that the move comes at this time, when home sales are finally on the rise, and home prices have finally begun improving. But the move is still expected to save a great deal of money. Another shutdown will take place the entire week of Thanksgiving, instead of for just the Thursday and Friday.

Mortgage lenders are facing a rather steep learning curve right now as the struggle to keep up with loan modifications and other programs instituted by the government in the hopes that foreclosures can be prevented. MarketWatch reports on the challenges faced by mortgage lenders right now:

Most mortgage lenders have always had some form of loan-workout program for troubled borrowers. But those programs were relatively small, and in the boom times were in slight demand since rising home prices and a brisk sales market made getting out from under an onerous loan relatively easy. So when the bust first hit, there wasn’t much that could get done.

For the most part, mortgage lenders were not ready for the influx of mortgage related issues. Some mortgage lenders have managed to pull it together and modify loans and find other solutions to mounting foreclosures, but many are still struggling to put proper systems in place and work out qualifications and other issues.

For homeowners looking for loan modification and other solutions to a possible foreclosure, it means a certain amount of patience, and the realization that it my take some time to work things out.

Last week, the Mortgage Bankers Association reported that single family mortgages are in delinquency at a rate of 13.16%. This is a new record for single family delinquencies. It tells the tale of a likelihood of increasing foreclosures. It also points out the difficulties that many families are facing during this recession.

With unemployment still rising (albeit at a slower pace), and with budgets tight, it is little surprise that families are having to make difficult spending choices. However, it is important to remember that your mortgage is one of the most important payments that you can make. Indeed, it represents your living space. If it is a choice between the mortgage and credit card or other debt, it is often best to choose the mortgage. Avoiding foreclosure, if you can, is important.

However, the rising delinquencies are probably an indication that things for some families have reached a point where that decision is not an option. Instead, for many, it is becoming a choice between paying the mortgage and buying food.

I love this great video of a Mariachi band doing a cover of the song “Beat It” by Michael Jackson. It’s great! So, while it doesn’t have much to do with money, it’s certainly a great way to start the weekend.

Happy Friday!

Foreclosure is one of the most difficult things to deal with. However, there are options for after foreclosure. While you probably will not be able to buy a home immediately, you can usually find a way to rent. Unfortunately, many landlords are interested in your credit score, and a foreclosure can leave you with serious credit problems initially. CNN Money reports on what one family did in order to get around this problem:

In April, having saved what they would have paid in mortgage, they relocated to Elyria, Ohio, where Stephanie has relatives. Unfortunately, their credit scores had dropped so low that it was difficult to rent — much less buy — a new place. So Stephanie’s mom bought a house and rents it to them.

Of course, not everyone has this option. However, there are some landlords who might be willing to take a chance on you if you are willing to pay a higher security deposit. You may also be able to explain extenuating circumstances that led to the foreclosure, such as job loss, illness or some other misfortune. Some are understanding. But you may have to prove that you can make the rental payments.

There are also opportunities to rent the home from the new owners. However, such positions, including right-to-rent, are not usually overly attractive to homeowners who have been dispossessed.

Before you go out and get a home mortgage loan, it is a good idea to do what you can to improve your financial life. Interestingly, there are a number of tasks you can do that will help you get on the right track to better personal finances. Many of them only take 5 minutes. Fiscal Fizzle has 15 things you can do to improve your financial life. My favorite 5 from this list include:

1. Draw a financial flow chart: This is useful because it will help you get a visual on where your money is coming from, and where it is going. Understanding your cash flow is vital to figuring out how to afford a home mortgage loan.

2. Set up automatic transfers: Do what you can to automate your savings. Whether it is taking a set amount from your checking account and moving it to your savings once a month, or whether it is getting the money taken directly from your paycheck and put into savings, set it up to happen automatically. Another thing you can do is set up an automatic transfer for a down payment account to save up to buy a home.

3. Start a financial journal: Keep track of what you are doing with your finances — and the feelings you are having. How do you feel after you buy something? How do you feel after making a large debt payment? Sort out your finances and your feelings about money.

4. Think about quick savings: Take a few minutes to think of small or quick things you can do to save a little money. Automating your thermostat, taking a bag lunch and other steps can help you improve your spending habits and save money.

5. Do a wallet check: Figure out what is in your wallet. Too much information? Would it be an ID fraudster’s dream? Make sure that you remove non-essentials. You can also do a credit card survey while you are at it.

What sorts of things would you do to help improve your financial life?

July housing starts data has come in, and it appears that construction has slowed. However, the data on housing starts is mixed. Even though overall construction fell, the largest drops were in multifamily structures; there was an increase in single family structures.

This news is providing a degree of comfort to those watching the economy. Indeed, many cite the fact that single family dwellings are on the rise again as a positive sign. It seems to indicate that people are buying homes again, and that demand for multifamily dwellings, used as rentals, is dropping. Some claim that this is an indication that the housing market is stabilizing.

Builders are still concerned, though, about starting new projects in some places, so housing starts are still down on the year. But there are some that feel hopeful that things are starting to turn around — or at least that they have stopped getting worse.