So, you decide to go ahead and purchase that home…or maybe move into a larger home if you already have one. You call your loan officer in order to get prequalified for a loan. You know about how much you want to spend and how much you want to put down on that home. You’ve given all your numbers (income, expenses, etc.) to your loan officer and you’re feeling pretty good about the impending purchase. The numbers are crunched and then your loan officer says the sentence you may not have been expecting…

“If only you didn’t have to worry about this car payment…”

This would come up because of your debt to income ratio. This means the percentage of your income before taxes that is already taken to pay debts – car payments, existing loans, etc. This is one of the things that every lender looks at when they’re determining whether or not to give you the loan you desire. A new car payment on your record will reduce the amount of money you have to purchase a house with.

While it may not seem like a lot (let’s assume your car payment is about $400 a month and you earn $5,000 a month), at an interest rate of 8.0% you would qualify for more than $50,000 less than you would if that car payment didn’t exist. Sure, you might tell your lender that you can handle the mortgage note and the car at the same time – but it doesn’t matter what you think – it’s what they think that determines the amount you’re prequalified for.

Now, this doesn’t mean that you shouldn’t get prequalified. You should. However, before you purchase that car you should think about that home. A home is more important when you’re considering your future, and especially if you’ve already got a car that’s nothing to sneeze at. You can always go for a new automobile purchase later after you’ve already purchased the home of your dreams.

In summary, while a new car purchase might be nice, the more important purchase (the house) will happen much more easily if you haven’t got the extra weight of a new car payment. Consider that and then make the wise choice on what to invest your money in.

About the Author:
I was born and raised in Central Toronto, spending my whole life in the neighborhoods that I now work, and in the Toronto Real Estate industry. I understand all the nuances of Toronto’s various communities & what Toronto real estate agents have to deal with.

I have dedicated my education to negotiating, marketing, business development and staying ahead of the curve with technology. I have attended international conferences, understand major agencies like Johnston and Daniel, all of which has helped me learn how I can provide more efficient, effective and thorough service.

My Friend Justin McHood over at Mortgages Unzipped humorously explained how most people end up choosing a title company when they purchase a home or refinance. In the end the answer is, they rarely do…choose that is.

This is something that has bothered me for a long time, so I wanted to take a moment and clarify REALLY who “GETS” to choose the title company.

YOU DO. The guy paying the charge for the services performed.

Not your Agent

Not your Agent’s Broker

Not your Mortgage Broker/Loan Officer

YOU.

Now having said that, how would you know which one to choose? Lets talk about that for a moment. This is where our discussion becomes about roles. See, sometimes how things ought to be, are often close to how they are…but like my 5th grade teacher used to always say (and I mean always) Close only counts in Horseshoes and Hand Grenades.

He also would say “You want me to turn you into a water buffalo?” Why a Water Buffalo you ask?, “Because a Water Buffalo’s hind quarters are up higher than its ears…after I kick your @** yours will be too”

Yeah, those were the days. When teachers could say that kind of stuff and not have the ACLU and the evening news there an hour later.

So back to how it ought to be. Professionals in the Real Estate industry are trusted advisers. We should know who you would want to use, not because we were “Bamboozled”, but because you will get the very best service you could get, for a reasonable price.

I will add as a disclaimer, that where you obtain title is a negotiable item in a contract. A seller can specify that if you wish to purchase their property you must use the specific title agency that they require. This is perfectly legal, and common when purchasing bank owned properties. However, in any other circumstance it is your right to choose as the buyer or seller. You might even ask your agent, or loan officer why they chose the agency they are recommending. A good loan officer or Agent will have done their homework and will be recommending someone based on Competency, Service, Communication, Efficiency and Speed, and of course price, but not at the expense of the other necessities…the last thing you want when dealing with the most expensive purchase you will ever make is the guy that is the cheapest just because they are the cheapest.

Someone other than my 5th Grade teacher said “The bitterness of poor quality remains long after the sweetness of a low price is forgotten” -Benjamin Franklin

When it comes to a good Title and Escrow officer, I couldn’t agree more with good old Ben.

Now, I’m off to Walmart…I need milk.

This is due to the Fair Credit Reporting Act which was enacted to help protect consumers credit scores from erroneous facts being reported against peoples credit.

One can shop for a mortgage worry free as long as the inquiries happen within a 30 day period. This means you can visit multiple lenders and brokers to make sure you are getting the best rate possible and not have to worry that your credit will be going up and down as a result.

If you are looking for a Mortgage in Utah and are told by a mortgage lender not to have others pull your credit because it will lower your score, run. This is an old trick that some people use to discourage shopping and competitive rates and fee’s. You want the best deal possible and the credit laws enable you to find it!

Some important things to remember when you know you will be applying for a mortgage:

• Put off applying for any new credit until after the loan is closed not merely approved.
  • Credit Cards, Auto Loans, Signature Loans, Satellite TV/Cable, Cell Phone Service
• Make sure all of your credit card balances are below 30% of the available credit limit.
  • Maxed out cards are a score killer, pay all balances down to below 30% (10% is optimal). Carrying a small balance, no more than 10% of the available balance can actually help improve scores more than carrying a zero balance.
• Credit reporting can take 30-60 days on recently changed status’s. If you intend to pay down balances to help improve scores make sure to do it well ahead of time as it wont help at all if you do it a week before your credit is pulled for the application.
• If there are some credit issues that need to be resolved, have all of the documentation available that shows if debts were paid or reported in error ect.
• Gather up all the basic required documentation for a loan ahead of time to help speed up underwriting. You will need the following to begin the process (but you may need more once Underwriting starts looking at the file):
  • 2 years tax returns
  • 2 months pay stubs or profit and loss statements for self employed
  • 2 months bank statements (personal and business for self employed)
  • Most recent statement from Retirement accounts such as IRA, RothIRA, 401K
  • Paper trail documenting the source of your down payment (Bank Statements, Letter of Explanation etc.)
  • Personal Identification (Valid Drivers License, Social Security Card, Passport, W-2)
• If you are not 100% sure that you are a ‘perfect borrower’, look into what you qualify before you go house hunting. Nothing is more disappointing than finding out you don’t qualify for that beautiful home or ‘killer deal’ that you just found.

Remember that to get the lowest rate possible you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including a loan origination/discount/broker fee which can be negotiated with your lender representative.  You may elect to pay less in fees but you will have to accept a higher interest rate.  This is a good strategy for consumers not planning on keeping their home for more than 3 years. Discuss all available scenarios with your loan advisor

Foreclosures are everywhere, people are defaulting, loan modification companies have commercials during prime time because the demand is so high. The news of mortgages being more difficult to get is covered regularly, yet many people are surprised to find that they do not qualify for the lowest rates available due to increasingly strict credit requirements from lenders.

During the heyday of easy mortgages someone with a below average credit score could obtain a loan, including borrowers who’s scores were as low as 500 using the standard FICO model of 350-850 for determining people’s credit worthiness. Now however, Lenders are increasing the credit score requirements. In 2009 Lenders changed the requirements twice from 620 to 640, and within months of the initial change from 640 to 660.

FHA itself has increased its requirements for several popular loan programs such as the FHA Streamline Refinance, which at one time did not require a credit score. Although FHA still will accept borrowers on a purchase as low as a 580, the vast majority of lenders have increased their own requirements to 620 in spite of FHA’s allowance.

While a 620 FICO will allow you to get FHA financing through most lenders, you will not get the best rates available. Lenders have criteria that they consider to be risky, such as lower credit scores or gaps in employment history that will increase the rate you are able to obtain. These are called ‘hits’ to the rate. In order to avoid the rate hit on an FHA mortgage a borrower needs to have a minimum 660 FICO score.

Many people assume that credit help is something that you only need if you have been through Bankruptcy or were irresponsible with your credit in the past, however, it is becoming increasingly common for people who thought they had no credit issues whatsoever to have need of someone who can help them understand the in’s and out’s of the credit laws.

If you are looking to refinance or purchase a home in the near future, obtain a free copy of your credit report and make sure there isn’t anything lurking there that could prevent you from getting a great rate.

One thing that sets Utah Mortgage Team apart is that we will help you get the best rate rather than simply telling you what you qualify for at the time that you talk with us. We don’t care how long it takes…there isn’t any pressure to do a loan or make a decision. We love to see people save money and have better credit in the process. So whether its a quick fix or several months in the making, we can lower your mortgage payment with our credit expertise.

Here are some tips to help you understand what the bank is looking for, and how you can present them with the right information that will give you the greatest chance to get the kind of modification you are looking for.

Make sure its actually the house or mortgage that’s the problem

Recently a client called telling us how they had tried and tried to get a loan modification but the bank just wouldn’t work with them. After speaking for a bit and asking questions about their finances, it was discovered that their mortgage payment was rather modest, but they had nearly $2,000 dollars a month going out in credit card payments and other debts. The house wasn’t the problem, but its often something people rationalize. They figure its easier to change the mortgage than it is to get rid of their credit card debt. On a fixed income, their best solution was to do something about the debt and leave the house alone.

Understand what qualifies as a hardship and what does not

This point is best made by telling a story of a client I was working with years ago. It was this client that caused me to revise my list of necessary documentation that I give out. One item that is required is a hardship explanation. She was very thorough in explaining what happened. 4 Pages worth of explanation…front and back…in Spanish.

The next day I got a call from the negotiator assigned to the file. I’m paraphrasing but his response went something like this “I just opened your clients file, and noticed that her explanation is 4 pages, front and back and in Spanish”. I replied, “yes it is” with a little laugh. He then asked why she didn’t make her payment and I told him it was because her husband had lost his job. He said “OK thanks, that’s all I needed” and our call ended. The lesson? They don’t care what the reason is. They are simply going by the book. If it fits whats considered a hardship in their eyes, they don’t care about all the details.

Here is a list of what banks will consider a hardship for consideration of a loan modification:

• Divorce
• Death, loss of a spouse or child (due to the expenses)
• Major Medical expense
• Loss of employment or Loss of Income

These are broad parameters are what a bank will consider, so you will need to figure out how to get your situation to fit within one of them. Now, having said that I’m sure someone will make a comment about how they had some situation that didn’t fall under any of these guidelines and got approved…my answer is GREAT, that’s awesome, but I am trying to make this apply to the broadest amount of people and this is what banks look for.

Here are some others that probably fall under one of these different categories that can also be considered a hardship

• Too much debt
• Mortgage payment increases
• Business failure
• Job relocation
• Damage to property
• Military service
• Incarceration
• Tax or insurance increase

Make sure you are doing all you can to help solve YOUR problem

I love what I do, its fun and very rewarding to see someone have the weight of facing foreclosure come off their shoulders. But I have little patience for someone who is just looking to game the system.

When you do an analysis of your budget, make sure you have eliminated all the non essential expenses that you reasonably can. Look for ways that you can make it work before you go asking the bank to make concessions for you.

Talk to a HUD approved counselor

I’m going to say this with a lot of hesitancy. But you should go see one. Why? Because sometimes it actually helps (terrible I know) but its true, they are horribly understaffed and in many cases under qualified to help. But the government in its wisdom (sarcasm) has decided that it will create a plan to help and then under fund it and under staff it so that its demise is inevitable.

In my opinion, the greatest advantage to talking with a HUD approved Counselor is that you get someone to bounce your questions off of who does not have an agenda. They will give you strait answers based on the best information they have available and wont be trying to sell you on an expensive legal service that you probably don’t need.

Having said that, I do believe there is a place for paid loan modification services. What doesn’t exist yet is a way to know who to work with and who not to. So until something comes about to bring fee’s into reality and an ethical framework for what and how clients are given recommendations and what they are being told, I am approaching this field with a huge caveat. I am giving away all of my years of experience and knowledge for free, in hopes that I can help people avoid huge pitfalls and hopefully find a way to save their house in this uncertain time.

It seems reasonably logical that a bank would work with a homeowner facing foreclosure right? So why don’t more loan modifications get approved?

I regularly hear homeowners repeat this old adage “well the bank doesn’t want another house on their books so…”

But this is one of those maxims that’s both true and false at the same time.

How?

Well I’m really having to fight my urge to toss in a shameless Schrodinger’s Cat reference here, but only physics geeks like me would get it…so ill use a better known example to illustrate.

Its like how in Action movies the ‘good guys’ always say that they wont negotiate with Terrorists. In this example, a homeowner thinking this way is using the logic that they have the upper hand because the bank does not want to go through with a foreclosure since it results in a financial loss for them.

The reality is, yeah they don’t want to take your house but they will.

In this sense the bank is using Keanue Reeves logic from the movie Speed when he says to “Shoot the Hostage”. If you were to shoot a terrorists hostage, they lose their only source of leverage. Not that I necessarily agree with it, but from a logical stand point you could argue that it serves the greater good. Save many, lose one.

Now, you might think I’m getting off topic, but I’ve always wanted to be in a court room and say to the Judge “Just follow me on this one your honor, I promise I’m going somewhere with this” So, just indulge me here a second.

The reasoning behind why we don’t negotiate with terrorists, is so that we take away their leverage, or at least we hope to discourage them from trying to use it again in the future. In this way we are actually saying “while horrifying, we are willing to lose a few for the greater good of all”

Now, to come full circle with this example, Banks know that if they were to begin wholesale negotiating with the public the incentive to continue making your payments would disappear in many peoples eyes. I’ve seen it first hand… I had a guy call me asking about doing a loan modification. He had perfect credit, perfect payment history but was unhappy with his 5.75% rate (WHAT). So he was contemplating ceasing to make payments so that he could try and strong arm his lender into dropping his rate down to “something in the 3 or 4 percent range”.

Aside from the fact that this is a stupid plan, as the bank would look at your ability to pay and say no, leaving you with some missed payments to catch up on and damaged credit its also exactly why banks are so reluctant to work with people who are legitimately in trouble and need the help. They are worried that no one will want to make their payments and will use the pain involved in going through a foreclosure as leverage to try and negotiate with the bank. So the banks shoot the hostage. Thus very few modifications get approved.

More often than not, what you will get offered at the very beginning of any discussions with your lender is whats called either a repayment plan or a Special Forbearance. These can take many forms and the numbers can be set up any number of ways, but this is the most common boiler plate version:

1. 50% of the arrears (The money you are behind) as an upfront payment
2. 50% of the arrears paid back in equal installments over a period of time ranging from 6-24 months

Its no surprise that these plans fail more often than they work. It doesn’t take a rocket scientist to figure out that someone who couldn’t make their payment as is, won’t be able to make a higher payment let alone write a check for half of what they are behind.

It’s setting people up to fail, and the failure rates are staggering to say the least. Its closer to 100% than it is to 50%.

However, there is hope. A plan can be set up to not only help someone save their home from foreclosure, but actually come out of the experience better off financially than when they fell behind. This is something that everyone should know about whether they are already in foreclosure, or simply face the prospect of it sometime in the future. I’ve always said that I could do so much more if people contacted me before they actually fell behind.

Finally, its worth noting that it doesn’t hurt to have some leverage when you go in to negotiate. I work with a Law Firm that does a Forensic Audit on mortgages to look for violations that would cause the lender to have some liability. Its relatively inexpensive and can really tip the scales back in your favor, or at the very least even them out.

More on this at a later time though, as this is not the intent of the post.

If you are looking for more information on whether you should or can do a loan modification, feel free to email me or shoot me a call and I’d be happy to discuss your situation with you further and give you recommendations as to what your different options are.

I sell real estate. It is what I do. As such, I find that almost every one of my clients that I speak to has a reason for buying a house.  It seems obvious, right? They are starting families, changing jobs, downsizing or maybe moving. All of these reasons for buying a home are perfect in their own way. They are the realization of the American Dream and I believe in that dream 100%.

And yet there is something that has been bothering me lately-

Many of my clients seem to be sort of bitter and disenfranchised with the whole American Dream. So I started doing some investigating to see what was wrong.  What I found blew me away.

I think home ownership is not making us as happy as it once did because we cannot divorce ourselves from the consequences of what home ownership means…the amount of debt, the struggle to make payments, and the concern over jobs and security.  Many Americans are working longer hours for less pay and for many of us, there is a real concern as to whether owning a home is a realistic goal for us.  Especially in this time of recession, when we may have seen friends and neighbors lose their homes to foreclosure, we may be hesitant to make the financial commitment of purchasing a home.  After all, we Americans spend the biggest chunk of our paychecks on housing.
If we are going to be making such a huge financial commitment, it seems like before we consider where we want to live, it would make sense to consider how we want to live first.  I would encourage everyone who is considering buying a house to sit down with their family first and decide how they want their lives to look like. How do they want to spend their spare time in their new home? Do they want to spend their free time in the new home?  How will the family use the house? Will it be a gathering place for friends and extended family or will it simply be a home base for future travels? Would you rather spend your money on something other than a house?

Recently I saw that the Federal Reserve just released a report on how to shop for a mortgage. This is the advice it gives:

• Know what you can afford.
• Compare loans from lenders and brokers.
• Understand loan prices and fees.
• Know the risks and benefits of loan options.
• Get advice from trusted sources.

However, if someone came to me looking to buy a house this is what I would tell them to do first:

1)  Speak to an honest professional to see if it even makes sense to buy a home. A house is one of the most expensive purchases a person will make. Is this really where you want your money to go? Do you really want to be responsible for all the maintenance and upkeep that owning a home will require? Or would renting a home or an apartment be a better choice for you?

2)  Make sure the REAL costs of home ownership won’t get in the way of the things that make you happy. So here is the question: what would make you happier? A 3,300 square-foot 4BR 3BA house or a 2,900 square-foot 4BR 2.5BA house but you get to go on vacation to Mexico once a month? Or you get to go out with friends every Friday night?  What if we decided on the things that really made us happy and made sure we had the money to SPLURGE on those things? Sit down and think long and hard about what your priorities are and make sure that your spending reflects them. The scale of the house that you buy can determine your discretionary income.

3)  Make sure the house itself (bedrooms, bathrooms, kitchen, features) will support your happiness. Will the extra money you spend on the house with the gourmet kitchen be worth it because you will enjoy cooking meals for friends and family? If so, great! If you don’t enjoy cooking, you might decide the fancy kitchen is just not worth the added expense, buy a house with modest appliances and spend the money you save on a nice meal out once a week.  Will you really use that swimming pool or would you rather use the money you save to go to the beach every summer instead?  A house is more than just expensive building materials; it is your home where memories will be made, so enjoy it!

4)  Buy a house below market value to protect against more recession, or if things get better, increase your financial upside through appreciation. DON’T do more with less. Don’t scrimp and save, but DO save on your home as it is the biggest expense and use your savings to make yourself happy.  Don’t be so stressed trying to stretch your paycheck to pay the mortgage that you can’t even enjoy your home.

5)  Get the best financing terms available through a great lender and get the best deal through an expert negotiator. Do your homework and do as much research as you can.  Get references from people you trust to find the right lender for you.  And then make them prove their expertise to you.

What it all boils down to, in my opinion, is that we just need to put some thought into what we what we want our lives to look like before we make a home purchase. If we don’t have a clear vision of what it will take to make us happy, our consumerist culture is more than ready to tell us that we will find happiness only if we buy more stuff. I think we are all smarter than that.  So am I telling you to go live in a commune, live off raisins and ride an organic bicycle? Well, if that brings you joy, go for it, but perhaps moderation would work as well.

It only makes sense to evaluate how much of our budget we want to spend on housing and how much we want to spend on what matters most.  I believe the extra time you invest in the process will allow you to more fully enjoy your new house.  Your home doesn’t need to be an extra source of stress for you and your family.  It can be the best decision of your life.

Karl can be reached at khartley@gmail.com

One of the most common questions I get when they call to ask about streamlining their FHA loan, is “What’s a streamline?”.

This is great question, and the answer I tell my clients is: “When you hear Streamline think ‘Easier, Cheaper, Faster’”.

The bottom line is this; FHA is giving people the benefit of the doubt since they have already qualified once before for the loan.

SO because of this FHA allows you (Until November 17th 2009) to take advantage of the lowest rates available without having to fully qualify for the loan again. In other words you can skip much of the ‘jumping through hoops’ that happened when you first purchased the home.

These hoops that you skip can include: The appraisal, income documentation such as providing pay stubs, tax returns, bank statements etc., and some lenders even allow you to streamline without providing a credit score.

There are however some restrictions placed on an FHA streamline refinance. Because FHA is giving you the benefit of the doubt and not requiring a new appraisal of the property. You cannot exceed the original loan amount that you borrowed including the Upfront Mortgage Insurance Premium of 1.5% that FHA charges.

Additionally, you cannot remove a borrower from the loan via a streamline refinance. If you need to remove someone from the loan such as in the case of a divorce, the person remaining on the loan must re-qualify for the loan on their income alone.

Be sure to discuss with your Utah Mortgage Lender the different options you have available to you through the FHA Streamline program.

The Ad’s talk about the fictitious character “The Credit Fairy”. In one Ad, One guy is playing video games while the other gives him a hard time about the fact that there is no credit fairy and he is foolish for having believed that someone could just wave a wand and make his credit get better.  Of course, this is the true part of the Ad. Its not that easy obviously, but there are those who almost make it sound this way…and they are the people that the public needs to be warned about.

As a Utah Mortgage Professional, I am on the fence about this PSA campaign. On the one hand it must be said that the credit repair industry has earned its reputation. No doubt there is a genuine need for someone, like these PSA’s, to warn people of the pitfalls of paying someone to help you fix your credit. Especially for someone who wants to improve their credit to qualify for a mortgage so they can buy a home.

I have to admit that I found it pretty funny and amusing at first.

But it begs the question; is it accurate?

Are you doing the public a disservice when you equate someone who can help you navigate the many different statutes and rules contained in the Fair Debt Collection Practices Act to a mythical creature that does not exist?

The images these Ad’s give are genius…it makes the point perfectly:

Fixing your credit is like hunting for Bigfoot.

But is it?

In my opinion, this is like saying that you won’t need a lawyer to help you in an injury case. Sometimes you really won’t need one, and there are times when its crucial to get someone who is your advocate and knows and understands the laws.

The very existence of the FCRA or Fair Credit Reporting Act, demonstrates the very real need on the part of consumers to have access to real, reliable and easy to understand methods of correcting errors in credit reporting.

Studies done by the Public Interest Research Group (PIRG) and the Government Accounting Office (GAO) concluded that nearly 3/4 of all credit reports (that’s on approximately 200,000,000 Americans…so like 150,000,000 credit reports) contain errors. Of those errors, they concluded that 25% of them would result in outright denials of credit.

Having worked in Real Estate in Utah for over 10 years, I can tell you that not only would many of these result in outright denial, but higher rates and more difficult underwriting as well.

The truth of the matter lies somewhere in the middle. Don’t listen to the “credit fairies” that tell you they can remove anything and that they can make your credit better over night.

Moreover, don’t pay someone to do it for you. The law says its illegal…

Even if they are selling a book, or ‘coaching’ or some other way of skirting the law. If they are willing to break the law to charge you upfront for credit repair…is that really who you want to entrust your financial future to?

If you are simply looking to improve your credit for the sake of having better credit, pay your bills on time, maintain a good mixture of credit types and keep your balances below 10% of the available credit. In time you will have very good scores. This is the essence of the Ad Council’s message, as well as the FTC’s message on Credit Repair.

But it is not the whole story;

The FTC campaign against credit repair companies is warranted, but inaccurate. In their zeal, I think they may have gone too far. By convincing consumers that getting help is like hunting for The Loch Ness Monster, many will give up hope rather than enjoying the benefits of improving their credit such as owing a home or obtaining a mortgage to do so. I’ve had bad credit clients that I was able to help get a loan within 30 days! Take that and stuff it under your pillow FTC.

Here is my unconditional promise to anyone looking to obtain a mortgage in Utah that may have credit issues. We have the results to back up what I am saying, and we don’t ever ask for money for our services. We simply hope that once we have proven ourselves with real results and you have good enough credit to get a mortgage that you would consider using us as your Utah Mortgage Lender.

Now I am not a mortgage adviser I actually help people to increase confidence and I also help businesses with cost reduction as well as working on a project about training for foster carers. 

Going back to the previous question; well it is all down to the now infamous credit crunch. These banks and building societies do not have the confidence or capability to start lending out buckets full of cash. Despite the governments of the UK and USA slashing interest rates the market is showing no signs of picking up. It is as if there is some kind of stalemate taking place. Despite lower interest rates the public at large have been amazed and angered at the fact that some mortgage lenders have not passed on the reductions.

For the average man in the street this seems rather unfair. How often does a lender keep their rates unchanged when the Bank of England increases interest rates? Never is the answer, they are very efficient at increasing their rates. In my opinion there should be a rule which states that they have to pass the interest rate reductions on to their customers.

Governments around the world are trying to find a solution to this stalemate; they need to find a way to get the whole lending business moving again. For now people will just have to make do with that they can get, hardly an ideal situation, but that’s just the way it is.

Many people “in the know” believe that the fall in house prices is set to continue for a few more months. I personally believe that the fundamentals are fine but that the credit crunch and the affect that it is having is making it virtually impossible to buy and sell houses. There is likely to be some more bad news to come but within a couple of years the housing market will start to boom as people start to be able to borrow money again.