We’ve talked at length about how many areas of the state are currently favoring buyers; therefore, seeking pre-approval on your Florida home loan is a great idea.

Now, however, is truly is official: The National Association of Realtors, in its June report, states that we’re in a buyer’s market. Get out there and purchase while prices remain low!

Why are we in a buyer’s market?

According to the report on existing home sales issued last week, there is now a 6.8 month inventory of existing homes on the market. The joint report of the Department of Commerce and the Department of Housing and Urban Development on new home sales contained similar news; the supply of newly constructed homes on the market will take 6.1 months to absorb at the current sales pace; compared to 4.3 months one year ago.

The NAR survey found that sales were down modestly in June, while home prices were still rising, albeit at a much slower pace than the status quo buyers and sellers had been seeing in recent years.

David Lereah, NAR’s chief economist said that the market is “flattening-out.”

“Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing. At the same time, sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories,” he added.

It’s true. As a recent auction in the South Florida housing market proven, sellers are not being realistic when it comes to pricing property at the moment.

Review of median home prices

The median existing home price for all housing types - single family, town homes, and co-ops - was $231,000 in June, a 0.9 percent increase over June 2005’s median price of $229,000.

NAR President Thomas M. Stevens stated that “people who were discouraged by the bidding wars that were so common over the last few years are finding more choices now. Relative to the five-year housing boom, this year is a buyer’s market in much of the country with plentiful supply, along with interest rates which remain historically favorable, so it’s a good time to buy a home.”

Single family home sales were down 0.9 percent to an annual rate of 5.81 million from May to June. That was 8.2 percent lower than one year earlier and the median price, $231,000, was identical to that for all housing types.

What does this all mean? The time is right for those seeing a house. Sit down, crunch some numbers, talk with our experts and determine which Florida home loan is best for your needs.

Just 600 monthly payments and the place is all yours.

The thought of 50-year Florida home loans may make you cringe, or cause you to ask if we’re kidding, but the trend has already begun in other parts of the U.S.

A California company began to offer the loans in March, touting them as a lifeline to consumers trying to squeeze into the Golden State’s ultra-expensive housing market. While the 50-year mortgages haven’t caught on in a big way, a handful of lenders now offer them, and they are available across the nation.

Critics dismiss them as a poor choice or a gimmick, but some in the industry say 50-year mortgages are finding their niche, and it may be just a matter of time before they’re common.

“We felt the loan would fill a need for some people to keep their payments lower,” said Alex Diaz Jr., V.P. of Statewide Bancorp, a mortgage company in Rancho Cucamonga, Calif.

Statewide originated about $92.1 million in 50-year loans in five states over the second quarter of this year — a tiny portion of the $700 billion in all mortgage originations in the period. In Florida, the loans are likely to spread through mortgage brokers who have business relationships with national lenders that are offering them, and who specialize in so-called subprime lending.

Experts believe credit-impaired borrowers might be good candidates for “the 50s.”

The borrowers would use the ARM to leverage the equity from their homes to pay off debt and improve their credit scores, then refinance out of the 50-year Florida home loan to something with better terms. The irony of the longest possible amortizing loan being used as a short-term mortgage option is inescapable.

“This is not a product that has been taking the world by storm,” said Doug Duncan, Chief Economist for the Mortgage Bankers Association. “From a statistical perspective they are practically non-existent.”

Many huge lenders such as Wells Fargo and Countrywide have no plans to make 50-year loans, or so they say. They feel the loans will not gain traction until they become widely sold in the secondary market, as most mainstream mortgages are. Mortgage financiers Fannie Mae and Bear, Stearns & Co. said recently they have no plans to buy the 50-year mortgages.

Just give them time, say some.

“I don’t see any objections to Fannie and Freddie [Mac] buying the product,” said Terry King, who follows loan trends for MRG Document Technologies. “Let it pick up speed. It’s got momentum on the East and West Coasts. I predict that [Fannie Mae and Freddie Mac] will adopt the loans by the end of the year.”

Most of the 50-year loans, so far, aren’t really 50-year, fixed-rate loans, however. Rather, they are adjustable-rate mortgages, or ARMs, in which the monthly payments remain the same for a certain period, then “reset” and fluctuate with prevailing interest rates, amortized over a 50-year term.

The adjustable-rate trend has gotten popular in California and even in parts of the Florida housing market, where home prices have climbed so far and fast. However, adjustable-rate loans, and riskier options such as payment-option mortgages carry the risk that, by deferring interest or even the payments themselves, borrowers will end up with negative amortization.

When the unpaid interest is added to the principal, the borrower owes more than he did at the beginning of the loan.

“They’re asinine,” said Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School at the University of Pennsylvania, and who now runs a mortgage information website, said of the 50s. “I tell people to ignore them. Given the wide availability of interest-only loans, going out beyond 30 years seems senseless. You are paying more for the loan and getting a very small reduction in the payment.”

At the very least, ARMs carry a risk of resetting at an alarming, sometimes unaffordably high rate, which should be a concern for borrowers who are only marginally able to buy.

• A 30-year loan for $275,000 set up as a five-year ARM at an interest rate of 6.58 percent, equates to a monthly payment of $1,752.68.
• Assuming that such an ARM in 50-year form would have an interest rate a quarter-point higher, at 6.83 percent, the monthly payment would be about $1,618.95 — saving you about $133.73 in cash per month.
• But the pain hits in the interest paid over the term of the long-term loans. For the 30-year loan, it would be $87,826.66. For the 50-year, $93,306.32.
• The balance after five years would be $257,666 (with $17,334.20 in equity) for the 30-year loan, versus $271,169.23 for the 50-year (with $3,830.77 in equity).

Basically, the short-term monthly payment reductions end up costing buyers both equity and thousands in interest. Yet some in the mortgage industry argue that given the changes in consumer behavior, the term of the loan has become virtually irrelevant. Homeowners have come to expect an ongoing cycle of refinancing or moving and often do not keep loans longer than a few years.

Long-term mortgages also may be a bellwether of changing attitudes about credit, say some consumer debt experts, who think holding a Florida home loan until the house is paid for is a phenomenon that has long since gone out of style. A major part of that attitude is due to the refinancing whirlwind fueled by low mortgage rates.

But it’s also a sign of a generational shift. There is so much more mobility in the job market now, and young people today know that the only way to get a major bump in their salary is to move on to a new job. They are constantly in the job market, have no idea how long they are going to be in one place, and ARMs are appealing as a result.

Consumers increasingly want to leverage their income into as many places as possible, such as homes, as well as efforts to consolidate debt from credit cards and student loans.

In Philadelphia, Pa., a city strewn with condominium construction, Old City 205 (named for the city’s area code) aspired to be an ultramodern residence for the well-to-do.

Too bad no one will be moving in.

The $40 million project in Philadelphia’s Old City neighborhood won’t break ground as the softening housing market continues to weaken and suddenly picky buyers balked at its price tags — $400,000 for a studio to over $2 million for a three-bedroom penthouse.

Brown Hill Development, the company behind the project, took note of the slowing market trends and decided it didn’t want to be left with unsold units. From coast to coast, developers are nixing or delaying condominium projects as home sales decelerate, construction costs are soaring and mortgage lenders are hesitant to finance units that might not sell.

Add in too many high-priced condos on the market and too few people who can pay for them, and you have a major affordability problem and a recipe for disaster.

“We’ve gone through the biggest real estate boom in the last eight or nine years and some of these projects haven’t started yet. Do you think they’re going to start building now?” said real estate exec Allan Domb, who has been dubbed Philadelphia’s “condo king.”

In Las Vegas, projects canned include high-profile developments such as Aqua Blue, a $600 million, 825-unit luxury condotel resort, and a $3 billion, 4,400-unit project named the Las Ramblas resort. Related Las Vegas, one of the two developers for Las Ramblas, cited rising construction costs and slowing sales for the cancellation.

Turning our attention to the South Florida housing market, canceled condo developments include 1390 Brickell Bay and ICE in Miami, Fort Lauderdale’s The Waves Las Olas, and Promenade in Palm Beach County. WCI Communities Inc., a builder based in Bonita Springs, Fla., said new orders for its high-rise condos fell 84 percent in the second quarter.

The company will now go forward with 3-5 condo projects in 2006, down from as many as 15-17, mostly in Florida.

In May, the volume of condo conversions plunged to $334 million from $1.65 billion a year ago, according to Torto Wheaton Research. The all-time high was $4 billion, which the market saw last September. Builder confidence, as measured by the National Association of Home Builders, has fallen in June to its lowest level since April 1995. Confidence took a hit due to rising Florida home loan costs, high home prices and speculators bailing.

The index surveyed builders of single-family homes, where the sales decline hasn’t been as severe as for condos or multi-family homes.

Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach, Fla., said desperate developers with finished condos are offering plenty of incentives in South Florida. Offers range from one year’s free mortgage payments to the use of a yacht or upgraded kitchen packages. McCabe thinks some might even sell units at cost if sales continue to weaken and inventory needs to be moved badly enough.

The condo market, especially the luxury end, is at risk of a crash, McCabe said. Over the next few years, prices falling by double-digit percentages might not be far-fetched. The luxury condo surplus is to blame, as about 25,000 condos are under construction in Miami-Dade County, with two-thirds costing $700,000 or higher. Another 25,000 units have building permits and 50,000 have been announced for future construction.

The median household income in Miami-Dade qualifies buyers for a $225,000 home, so the luxury units are targeted mainly toward the affluent. At the same time, speculators have driven up prices by flipping units, but are now leaving the market, driving down demand and adding to the glut at the same time Florida home loans are getting increasingly hard to finance.

Everyone wants to buy their own home, to have their own place to call their own, to experience the American dream. But as we have come to learn over the past six months, especially in the South Florida housing market, that doesn’t necessarily mean a person can pull it off.

It’s imperative to crunch the numbers and to give the issue serious thought. Let’s say you earn a good salary of $60,000 a year, but have little money for a down payment. Can you possibly afford to be buying a house at this stage?

First, you need to establish whether it’s even possible financially. Then, whether it’s the right move given your current life situation.

As we’ve often talked about, buying a home is a good financial move for the long term ,but might not make sense if your life is undergoing dramatic changes in the next few years. For instance, if you are starting a family and need more space.

You can be pretty sure your rental costs will rise with inflation on a yearly basis if you put off buying. If you buy, you still have monthly payments for interest on the Florida home loan, along with the principal (the portion of the loan you pay back every month). But these two costs would be fixed for the life of the loan, so you avoid the kind of annual increases you’re likely to face as a renter.

Of course, as an owner you would be paying for homeowner’s insurance and property taxes, which are likely to go up with inflation. In the case of insurance, especially lately, rates could go up fast. And many people somehow forget they will have to shoulder all the maintenance and renovations that fall on landlords or superintendents while renting.

• But, if you bought now, it’s almost certain you’d pay less for housing in five or 10 years than if you rented a comparable property.
• Also, you’d gradually pay off your Florida home mortgage loan and the home’s value is likely to rise over time. So you’d build equity, the difference between the property’s value and what you owe.

However, it costs money to sell a property. The commission paid to the real estate agent runs to 5-6 of the sales price. Moreover, while home values have gone up a lot in recent years, they do level off sometimes, or even drop, so a quick turnaround might not net you a significant profit, if any.

There’s no guarantee you could buy a home now and sell it in a year or two for enough to pay off your mortgage and cover the sales commission and any other costs related to selling, such as repairs. Be very cautious about buying unless you think you will keep the property for 3-5 years.

As far as how much of your income you can allocate to buying a house, Florida mortgage lenders want an applicant whose monthly payment for principal, interest, tax and insurance (PITI) amounts to no more than 28 percent of their gross income. They don’t want your total financial burden to amount to more than a 36 percent debt-to-income ratio.

Assuming you have no debts now and could find a Florida home loan charging around 6.5 percent, you probably could borrow around $160,000. Obviously, you could borrow more if you are living with another person and you buy together. Typically, home buyers make down payments of 10 percent of the sales price. But some lenders will require only 5 percent, some none at all.

There are many federal and state programs that assist first-time buyers, such as the U.S. Department of Housing and Urban Development (HUD). As you browse for houses at the site of the National Association of Realtors, you can also make use of their calculators to help figure out things such as how much you can borrow and whether Florida home loans are affordable in your price range.

Those seeking to buy property typically face one overwhelming obstacle: the amount of monthly payments due on their Florida home loan. Whether you’ve already taken out a mortgage or are merely contemplating such a decision, here are pros and cons - and other related details - of lowering the amount due on your bills.

Pros
You may have an adjustable rate Florida home loan that will “reset” in the next few months to a higher rate, and continue to adjust every year. Or perhaps today’s interest rates are lower than they were at the time when you took out your mortgage. If so, refinancing may enable you to lock in better rate.

Another possibility is that at the time you got your Florida home loan, you were more optimistic than you should have been about how quickly you could afford to pay it off. Extending the term of the loan and paying it off more slowly could also reduce the amount you have to pay each month.

Cons
While you can save in the short-term by reducing your monthly payments, you may face more in interest payments over the long-term if you extend your loan term and pay your mortgage off more slowly. There may also be financial penalties associated with a Florida home loan refinancing.

Extending the term
If you extend the term of a $100,000 mortgage at 6.25 percent interest from 15 years to 20 years, you could reduce your monthly payments by $126.49. However, you’ll also end up paying an extra $21,086 in interest charges. Only you can decide if that’s an appropriate trade-off.

Lowering the interest rate
In the case of a $100,000 mortgage amortized over 30 years, you could reduce your monthly payments by $47.91 by refinancing from a 6.25 percent interest rate to a 5.5 percent interest rate. More importantly, you’ll save $17,253 in interest charges over the life of the Florida mortgage loan.

Combining options
It may be possible to change both the term AND the interest rate of your mortgage in order to lower the payment. Start by finding or negotiating the lowest possible Florida home loan rate, then calculate the term that brings your payment to a level that’s acceptable.

Refinancing with an interest-only Florida home loan
You can reduce your monthly payments to the least possible amount by refinancing with an interest-only mortgage. The downside is that when the typical five- or 10-year interest-only period expires, your payments will increase considerably.

In fact, they will be higher than they would have been if you had stayed with a conventional mortgage. This option is therefore only worth considering if you are experiencing a temporary financial squeeze, but expect your financial situation to improve significantly in the future. The other drawback is that you aren’t building equity as you are not paying off any of the principal.

Downsizing your home
Did the thrill of the house hunt lead you to overextend yourself or be overly optimistic when it came to your finances? Realistically assess your finances and consider whether you can do with a smaller house. Think about a Florida home equity loan before moving, but don’t rule out the fact that you may need to downsize.

Follow one of these steps, save money and ensure the home buying process is a fruitful enjoyable one for yourself and your loved ones.

How can you tell if your city’s housing market is in solid or rough shape? The number of housing starts in the area is, well, a good start. If nothing new is being constructed, it’s probably a sign that Florida home loans aren’t in heavy demand.

Take the contrast in construction around Broward County and Paml Beach. Despite all the talk about a dearth of buildable land in South Florida, the former recorded an increase in housing starts during the second quarter.

The Broward housing market enjoyed 900 starts, up 54 percent over the second quarter of 2005, according to a report released last week by West Palm Beach housing analyst Brad Hunter.

“I don’t know specifically what explains it,” Hunter said. “But land is scarce - that story hasn’t changed.”

On the opposite end, Palm Beach County’s 1,508 home starts in the second quarter represented a 36 percent decline from that period last year. This goes along with affordable housing problems in the area, as prices have been forced to decline in the sector in order to help buyers find a reasonable Florida home loan.

Others tidbits from Hunter’s Metrostudy consulting firm:

- There were 1,621 people moving into homes in Palm Beach County during the second quarter, down 8 percent from the first quarter of 2006. Hunter said he expected more, given the increase in supply of homes being sold by investors. New strategies by sellers and incentives aimed at those seeking Florida home loans should help in the future.

- Broward has 2,724 finished vacant homes and homes under construction, which represents a 16-month supply of inventory.

- Palm Beach County has 653 finished vacant homes, which equates to a one-month supply. That’s the lowest in South Florida, but it’s still rising.

“In the short term, there’s a competitive problem for sellers,” Hunter said. “In the long term, once we work through this, we’ll return to an undersupplied market.”

So, you wish to apply for a Florida home loan? First, you’ll need to take a look at your credit score and find a way to control/consolidate debts that are causing your rating to falter.

With this in mind, we’ve listed a series of ways to consolidate debt and assure yourself of the most manageable Florida home loan rate available:

Home equity loans
They’re inexpensive, relatively easy to obtain and they may offer a tax deduction for the interest portion of the Florida home equity loan. The downside is that the collateral for the loan is the house. “A home equity loan can be an extremely useful strategy if it’s used properly,” Greg Pahl, co-author of “The Unofficial Guide to Beating Debt,” Pahl says.”But people need to have their eyes open and understand the implications.”

The other disadvantage is the low-pressure repayment terms on such a Florida home loan.

“Most lenders aren’t in a hurry for you to pay it back,” he says. “The leisurely repayment schedule isn’t part of your goal. Your new monthly payment should be at least as large as your previous monthly payments - if you want to really make progress. If you can pay more, you should, because you’ll pay it off faster.”

Retirement funds
Most employers will allow loans from a 401(k) or other retirement plan, but this should only be used if you have no other choice. The interest is almost never tax-deductible, but you’re paying interest to yourself instead of a bank, Pahl says. If you can’t pay it back within five years, the IRS will assess taxes and penalties. Also, if you quit your job, your employer will call the loan in full when you leave.

Life insurance

If you have whole life insurance, you can borrow against its value. There’s no time limit and, Pahl says, “You don’t really have to pay it back at all. If you don’t pay it back, the amount of the loan is deducted from the benefits paid to your beneficiaries, so you probably want to pay it back.”

Renegotiate the terms with your primary lender
“A mortgage lender would rather renegotiate than repossess your home,” Morris says. “They can say no, but you can go to them and say, ‘I know I’m behind. Can we stretch out the payments?’ It’s an upfront relationship. They do lose money if you default. Most lenders will renegotiate.”

Florida home loan refinancing is always an option for those trying to clear up their finances. Apply today through our free form and see how we can help with this task.

In the cooling South Florida housing market, more and more sellers are counting on public auctions to move property. Case in point: the Great South Florida Real Estate Auction, held yesterday in Fort Lauderdale.

Wanda Brown arrived at the event excited to finally take out a Florida home loan and use it on a three-bedroom, two-bath single family home in the Breezeswept Park Estates in Plantation. However, she left disappointed when the winning bid for said house was $292,000.

“That’s overpriced,” said Brown, 48, a school board maintenance employee. “I know the houses in that area. It’s a nice area, but it’s no $300,000 house.”

Few deals finalized, prices set too high

Many potential homebuyers, realtors and speculators who attended the daylong auction of almost 100 properties shared Brown’s feelings. Some were also taken aback by the “as-is” contract terms they received in their registration packages.

But to Ben Stern, whose Synergy Group real estate firm owned the properties, the turnout meant South Florida’s housing market remains in a slump since sellers set prices high and buyers wait for those prices to be reduced. Who will bugde first, buyers or sellers?

Residential home auctions are becoming popular with sellers nationwide, as properties are taking longer to sell than in previous years. Demand for Florida home loans has been waning; and public auctions generated more than $14 billion in sales in 2005, according to the National Auctioneers Association.

Potential homebuyers hear the word auction and think “steals.” Many are left disappointed.

“The prices are what you would pay at market prices,” said Mary Parks, a Hallandale Beach speculator. “I expected better bargaining, and this is not. These aren’t bargains.”

Stern said the lowest winning bid was $86,000 for a Lake Worth house. The highest bid was about $600,000, for a Tamarac house.

Merly Grigou and her mother, of Plantation, were among the purchasers. Upon obtaining financing on a Florida home loan within one month, they’re set to walk away with a six-unit Fort Lauderdale apartment building on which they bid $522,000.

The issue remains: will sellers bring prices down in order to satisfy those who do wish to apply for a Florida mortgage loan, but can only afford a certain amount? Those wishing to be rid of property in South Florida will have to consider strategies that pay off for all parties.

David Berson, chief economist for Fannie Mae, put it this way:

“Unsustainable trends eventually come to an end.”

This is one of the few indisputable laws of economics, and pretty much sums up where the Florida housing market currently resides.

The Federal Reserve chairman, on the other hand, was more ambiguous:

“The downturn in the housing market so far appears to be orderly.”

In classic Ben Bernanke-speak, the head of the U.S. central bank simultaneously calmed analysts and raised the red flags. An orderly real estate downturn sounds okay, doesn’t it? But “so far” implies that it won’t necessarily be okay for long. And what does this all mean, in practical terms, for people who need to sell a house in next couple of months? What about first-time buyers worried if the property they buy will be worth less in a year?

Part of Bernanke’s job, it seems, is to avoid specific predictions at all costs. You won’t get answers out of him anytime soon. But Berson and other housing experts are paid to make specific projections, and he offered them July 20 in his mid-year forecast conference.

Below are excerpts from his remarks:

– The Federal Reserve is not quite done with its crusade against inflation and will bump up short-term rates again in August, Berson believes. From then on, rates are likely to stabilize, bringing at least a temporary calm to rising Florida home loan rates.

– Home price appreciation, which has been running at double-digit annual clips for the past year in many markets, may drop to 3 percent or less by the end of the year. Berson is much more pessimistic than most of his counterparts when it comes to the extent of the weakening market’s decline, as many are calling for slower, but still sizable appreciation of 4-6 percent.

– If speculative real estate investors continue to dump massive amounts of rental properties and second homes bought during the boom years onto the market later in larger than expected numbers, Berson believes appreciation could fall to around 1 percent annually — a level not seen since the recession of the early 1990s.

– In a handful of markets where investors account for a significant share of boom-time property purchases, and where increases have soared for years, Berson believes there is a good chance of declines in average home values. San Diego and other parts of California, along with large areas of the Sunshine State (Palm Beach, Broward and Miami-Dade counties, but not the metro Orlando area) were among those singled out.

– The weakest link in the housing market, in Florida and elsewhere, is the condominium sector. Many markets are glutted with unsold inventories of new and condo conversion units already, and significant price corrections could be just over the horizon.

What these remarks mean for you:

Neither Berson nor Bernanke predict widespread property value declines as part of the current down cycle. Only in markets where speculation has been rampant in 2003-05, and where job and population growth are anemic (see parts of the New England market) are there risks of price declines.

Analysts do not expect Florida home loans to rise significantly in rates, compared to where they are right now — and that’s still on the low end by historical standards. As long as financing is available and affordable, buyers will find a way to purchase houses, even at high prices.

A flattening market means changing one’s tactics, though, not hibernating until the market warms up. For sellers, that means getting acquainted (or reacquainted) with the dearth of selling strategies developed during down periods (or pretty much, any time before 2000, when the boom began and houses flew off the market in mere hours, often in bidding wars).

For example, they should consider seller financing, where the seller takes back a second note on concessionary terms to push the sale, or takes back a first note if they can afford to, or buys down the purchaser’s interest rate to help lower monthly payments. Experienced real estate brokers can fill you in on this and other strategies, along with the pros and cons.

There’s also the matter of pricing realistically to sell your property now, not five months from now. For prospective buyers, down markets often offer exceptional opportunities to acquire real estate at prices and on terms unthinkable just a few years before. Again, the message is to do your research, scour the market for properties that may never be cheaper, or even available.

So adapt to the changed conditions. Work a little harder. Then everything will be alright.

Harj Gill doesn’t hold anything back when talking about piggyback Florida home loans. Says the International Mortgage Reduction Expert and Consumer Advocate:

“We have a catastrophe about to hit millions of American homeowners.”

Such exotic mortgages were originally intended for financially astute, high- income borrowers. However, in the frenzy of the housing boom, they have been mass marketed to home buyers in high-cost, high-priced, metropolitan markets.

For example, piggybacks are cited. These Florida home loans have become a favorite among borrowers with little or no down payment.

According to SMR Research, by the first half of 2005, the proportion of borrowers using piggyback mortgages was 48.2%. The default rates on these loans, according to ratings agency Standard & Poors, is an overwhelming 43% - and rockets up to 50% for borrowers with FICO scores of less than 660.

Can you prepare for the Florida home loan future?

Consumer Advocate Gill contends that, “If you had a crystal ball that told you precisely what month you would lose your home and your family out on the street, you would do something about it.”
Of course you would. But what on earth is he talking about?

Such an invention for mortgages is exactly what Gil’s Financial Software Program is akin to. Users enter their Florida home loan details, as well as their income, regular expenses and any current debts they have, such as credit cards and car loans.

Once this is done, in the case of piggyback Florida home loans for instance, users are able to forecast the exact month (and year) they will go into default as interest rates rise and their cash flow is insufficient to meet the increased payments.

The most revolutionary aspect? Borrowers can then manipulate their finances to create any number of “what-if” scenarios to find one that will help them avoid going into default.

“Before we started using this software we knew, with rising [Florida home loan rates], that we would soon be in trouble,” said Peter & Shari W., a young couple with a piggyback mortgage from Bellevue, Washington, which has one of the highest concentrations of these loans in the country (51%).

“At first we were scared because we didn’t know what we would see with the results. But what we actually discovered was tremendous relief,” they said.

This feedback is quite common, as homeowners have been using this software for over 10 years. It’s an incredible step forward, as lenders can try to peer into the future of the housing market - but this technology can get it done in more accurate way.