California
Credit Crisis
If
you're a California homeowner,
chances are you're pretty worried about how the credit crisis might
continue to affect your personal finances. Not only did California have the
highest number of foreclosures in the nation in June 2008, according to
RealtyTrac, but dropping home values
have left many homeowners unable to sell.
And
because a lot of people used the equity in their homes for everything
from vacations to home improvements,
many homeowners have been left with negative equity, owing more than
their house is worth. The median price paid for a home in California fell in
May to $339,000 from $484,000 a year earlier, according to DataQuick
Information Systems.
Much
of the credit crisis is
related to the fact that during the real estate boom many people took
out subprime mortgages to purchase their homes. If you're
still carrying a subprime mortgage with an adjustable rate and are
worried about foreclosure, it's important to talk with your lender to
find out what can be done to help. Your lender may be willing to work
with you to refinance your loan or take other steps to lower your
payments. If your lender is unwilling to work with you, shop around to
find one who will.
Some
housing experts say that bargain-hunting investors are beginning to
look for housing deals in some of California's hard-hit areas. But
while it is a buyer's market because prices have dropped so much, if
you don't have good credit and a 20%
down payment, you may have trouble qualifying for a mortgage.
Sources
DataQuick Information Systems
RealtyTrac
