The housing bubble has burst. What this means, basically, is that the buying and selling of houses has gotten stuck in the mud. It is now nearly impossible to sell your house because the price of real estate has plummeted. Forget about getting a fair price for your house; it has dropped in value so much that you will be lucky to get a fraction of what it would have sold for a few years ago. Buying a house, on the other hand, has become very easy – if you have the money. If you must borrow the cash from a bank for a mortgage, you will find that it has become almost impossible to get the loan. Foiled again. So, buying or selling a house these days is a nightmare. We are in the worst economic situation since the Great Depression of the 1930′s. Given this economic mess, what can we do to save what we have?

For the homeowner whose mortgage is satisfied, sit tight and enjoy. You will be there for quite a while. If you are trying to relocate, you have two problems. The first is how to sell your present home without losing money. The second is how to get a mortgage from a bank to purchase the new house. It is almost guaranteed that you will lose money when selling your present home so try not to be overly disappointed. It is probably a better choice to find a buyer at any price offering than it is to hold out for the amount that you want for your house. If you have lived in the house for many years, you will most likely get your money back and maybe a little more. If you have only been there for a few years, take what you can get and be thankful to have found a buyer. The second problem, finding a bank to lend you money for a newer purchase, depends largely upon how you can impress the lender. These days lenders are under a lot of pressure not to make a bad deal; they want the borrower to pay back the money with interest in a timely manner. You must convince them that you are such a borrower.

Let’s say that you have just purchased your home, you have a mortgage, and you are happy in your new digs. Your best strategy, given that the economy is going to get much worse, is to pay off that loan as quickly as possible. Double the principal payment whenever possible. Take any windfall that may come your way and pay down the mortgage. Stop renting movies and eating in restaurants and divert that money toward the mortgage. These tactics, and others, are good advice in any economy, but they are more important nowadays. The faster you can get that loan paid off, the less interest you will pay. This keeps money in your pocket over the long haul. When new financial disasters strike you can feel more secure knowing that your home is paid for, and that no one can take it away from you for nonpayment. Our home is one of those things that can make us feel secure day to day. If that home is threatened with foreclosure, or that we are constantly pressured to keep on paying high interest monthly payments, we tend to feel less secure.