Wishing you a Happy and Successful New Year!

May you enjoy increased prosperity, and hopefully set resolutions that will lead to a better situation.

Many people choose not to make financial New Year’s resolutions, fearing that they won’t keep them. I say go for it. Those who make resolutions are more likely to accomplish the changes they desire than those who don’t resolve on anything. Last year, I made a resolution to refinance the house. I didn’t get around to it. But 2010 is the year. Mainly because I’m afraid that interest rates will rise and I’ll have missed the boat.

In order to reach my goal, though, I’ve got to do a couple of other things:

* Make sure that my credit score is up to snuff. So I’ll check it soon and then see if I need to have errors removed from my report, and do something else to get a little boost.

* Have the house appraised. An appraisal will be needed to asses my current loan to value ratio. I haven’t been in the house very long, so I don’t have a lot of equity, but I know I’m not upside down.

* Look at my options. Interest rates are low enough that I can refinance to a 20 year loan and pay only a little more than I am paying now per month. So that might be a possibility rather than refinancing to a 30 year loan.

I’ll also have to actually go into the credit union and talk to someone about it. And while I’m at it, I’ll probably ask about a Health Savings Account, since that’s another one of my financial New Year’s resolutions.

Even though there are hopes of economic recovery, things are moving slowly, even on the housing market front. With prime mortgage borrowers slipping into delinquency, and mortgage lenders still being tight with their qualification requirements, it is little surprise that the housing market isn’t moving much.

As a result, home prices remain flat. The latest Case-Shiller home price index shows that October saw flat home prices, and that October did not keep pace with the rest of the year. However, that may have been due to the fact that the fate of the home buyer tax credit was in doubt. Now that the credit has been extended and expanded, there are hopes that the housing market will pick up pace — and that home values (and prices) will increase.

The buyer’s market may soon be coming to an end.

In these times, where economic uncertainty remains even as some evidence of improvement has appeared, many people are wondering whether or not bankruptcy is the answer. In some cases, there really is nothing left that can be done. In other cases, though, there are still steps that can be taken to avoid bankruptcy. Before you make the decision, though, it is a good idea to understand these 3 bankruptcy myths:

1. All of your debts will be cleared

Many people think that bankruptcy is a “get out of debt free” card, allowing them to zero out their debt. However, it doesn’t exactly work that way. Some debt is not eligible for being cleared under bankruptcy, and in some cases you will have to repay at least a portion of what you owe.

2. You will lose your home

It is only in the rarest of cases that a person loses his or her home as a result of bankruptcy. In most cases, you cannot be ordered to sell your home to pay your debts. However, if you have stopped making your mortgage payments, your lender can foreclose on your home. But that is something different.

3. You can’t get credit after a bankruptcy

Many people believe that once they declare bankruptcy, they will not get credit in the future. While they may have a tougher time, the fact is that it doesn’t mean you won’t get credit. You will have to rebuild your history, and bankruptcy will remain for 7 - 10 years, but if you work hard to rebuild your credit, you can usually buy a home within 3 - 4 years after a bankruptcy.

It is also worth noting that you cannot be fired due to your bankruptcy. So, before you decide for or against bankruptcy, consult a professional, and consider whether or not one of these myths is influencing your decision.

I hope that you are enjoying the joys of Christmas today. (I’m pre-posting this, so I’m enjoying Christmas.) Enjoy this funny video of children being scared by Santa. And have a Merry Christmas!

Happy Friday!

Today is Christmas Eve. Hopefully, you are enjoying the gifts of family and love. And, if you bought a home this year, the gifts of a tax credit and low mortgage interest rate!

Merry Christmas!

This week, mortgage applications have dropped. The Mortgage Bankers Association is reporting that applicants are holding off a bit. This is not especially surprising, with the holiday approaching. Indeed, the MBA is taking next week off, and not planning to release data on mortgage applications.

As is usually the case, most mortgage applications were related to refinance. Nearly 76% of mortgage applications were from those wishing to refinance. This is not surprising, since rates are near historic lows, and many homeowners are interested in refinancing to a lower rate in order to save money.

It will be interesting to see how things go starting in the new year, and whether the expanded and extended home buyer tax credit will contribute to a pick up in new mortgage applications.

No, the mortgage market hasn’t completely recovered. However, mortgage applications are on the rise again, and lenders are starting to take a few more chances. Some are starting to offer teaser rates again. These low interest rates make it possible for you to initially be approved for a loan, and then a few years down the road the rate resets, and you have a higher payment.

This isn’t just happening with new home mortgage loans; it is also becoming popular again with mortgage refinancing. You can refinance to a low, low interest rates for around five years, and then rate increases at that time. If you can’t refinance again, then you are in trouble as the rate resets and you pay a new, higher interest rate.

So, before you agree to such a loan, it is a good idea double check your finances. Make sure you can afford the mortgage payment amount for after the reset. It’s a nice thought that you will earn more money by then, but as many are finding out right now, that doesn’t always work out. So base your mortgage decisions, from buying a new home to getting a refinance, on what you can comfortably afford now.

Even though things are starting to improve in the overall economy (expectations for November home sales are positive), for individuals things are still a bit difficult. This is especially telling in the fact that many prime borrowers are starting to slip into delinquency. The Wall Street Journal reports on the situation with regard to prim mortgages:

The most troubling finding was that even borrowers considered “prime,” or the least risky, increasingly can’t pay their loans. The report said that 3.6% of prime mortgages were more than two months behind on payments, more than double from a year ago.

Some borrowers might receive relief from foreclosures by the fact that some mortgage lenders and servicers are suspending foreclosures at some point during the holidays. However, things are still difficult for many people in terms of the personal finance situation. Jobs are still scarce, and this makes it difficult for borrowers to make their mortgage payments in a timely manner.

O Holy Night is one of my Christmas carols/hymns. And, while I usually like to hear it sung straight out, this version from South Park really killed me. So, enjoy a little Christmas cheer.

Happy Friday!