If you are currently trying to sell your home, you have my sympathy. The housing market still hasn’t recovered from its collapse, and foreclosures are still running rampant. Who knows where interest rates will end up.

You’re not without recourse, however. If you’re a seller, you can use these six steps to make your home more attractive to potential buyers.

1. Price Your Home Competitively
First, you have to know the current values of other properties in your neighborhood. Try visiting Zillow, where you can enter your address and instantly get a report with estimated values of homes near you. When I first tried out the site, I was shocked to learn that some homes in my development were worth $50,000 or less. These homes are likely foreclosures, and they probably need major work before they’re “livable.”

Another question to ask yourself: Do you have to sell, or do you want to sell? Answering that question and evaluating your sense of urgency will help you determine your negotiating stance.

2. Improve Your Home’s Curb Appeal
Try this helpful exercise: Get in your car, drive around the block, and try to erase any preconceived ideas of the condition of the exterior of your home. Take an unbiased, objective look at your home, and ask yourself these questions:

• How does the driveway look?
• Is your landscaping, including all trees, plants, and shrubs, attractively maintained?
• What does the front exterior of your house look like? Is it something you would want to purchase?
• What does your front lawn look like?

Think about the fact that prospective buyers have probably been shopping around for a while. They’ve seen some great homes and some average ones, and they’re getting pickier as they go along. Get some fresh perspective on the first impression your home is making, and do all that you can to improve the exterior.

3. Don’t Over-Customize the Interior of Your Home
If you’re like me, you have that one room that’s designed or painted in a way that you absolutely love. Well, guess what? A prospective buyer may hate it.

One of the biggest selling points for me when I bought my current home was that the walls in the entire house were painted white. It was like a blank page that I could make my own. The seller actually did this for this exact effect. For a potential buyer, purchasing a home that has a clean slate for re-decorating is an absolute plus.

4. Make Necessary Repairs
If you have a leaky faucet, a cracked windowpane, or a carpet stain, get these things fixed now. Don’t wait. You’re probably going to have to spend on repairs before you close on the home, so you might as well do it in time to improve the “appeal” of your home to a potential buyer.

The previous owner of my current home had to complete almost $2,000 in home improvements before I would agree to move in. If you start working on repairs now, you’ll sell sooner and avoid the expense of last-minute rush jobs.

5. Hire a Professional
This strategy falls under what’s called “professional home staging.” Home stagers perform duties that run the gamut from re-arranging furniture to advising you to re-paint entire rooms. They can also suggest replacing certain fixtures in your home. Their goal is to highlight the best features that your house has to offer, and also to make it easier for potential buyers to visualize themselves actually living in your home.

Hiring a stager can cost as little as a few hundred dollars, and they may be able to increase your home’s selling price by $5,000. That’s a pretty good return. Plus, if you’re utilizing a real estate agent for your home-selling process, you might be able to get your realtor to chip in or completely cover the cost of a stager. Remember, they want to sell the home as much as you do.

If you consider using a stager, do diligent research. Seek reviews, advice from neighbors, and referrals before deciding on one.

6. Use the Internet
In 1995, only 2% of potential home buyers used the Internet to search for a new home. By 2005, about 77% searched online, and of course the percentage is still rising. I suggest going as far as creating your own website for your home. Regardless of your level of computer literacy, you can create a web page pretty easily, and for a low cost.

It’s a great opportunity to stand out from other sellers, and highlight the features of your home and the benefits of your neighborhood. Whenever you find someone with even remote interest in your home, you can simply direct them to your house’s URL for more information and pictures. You’ll not only attract more potential buyers, you’ll save yourself time in the long run.

Final Thoughts
If you’re trying to sell your home, then you already know it’s going to be tough in this climate. But you don’t have to be held hostage by the hindered housing market or the state of our national economy. Get some fresh perspective on your home, get a jump start on repairs, and get your creative business and sales ideas flowing, and you can boost the speed of your sale.

What other ideas do you have to make your home more attractive to potential buyers?

David Bakke writes about real estate, investing, and saving money on Money Crashers, a multi-author personal finance blog with various perspectives on financial and lifestyle topics.

Many homeowners with a 30-year mortgage don’t realize how much they are paying in interest. This is the problem. The solution for many is to accelerate the payment, either by paying more principal each month or by entering into a shorter repayment contract. The best-known among these is the 15-year term.

An example: If your mortgage balance starts out at $100,000 and your loan is written at 5% interest, the 30-year term requires a monthly payment of $536.83. Over 30 years, the total of all payments adds up to just under $193,259. That’s a 93% premium in interest payments – on top of the mortgage balance.

It gets worse. It takes more than 20 years to pay off  half of the debt. The other half is paid over the last 10 years. In fact, a 30-year term amortizes so slowly that after five years (60 payments), you still owe 92% of the original balance. When you consider that the average first-time buyer keeps that home less than five years, this further makes the case that a 30-year mortgage is too expensive.

The Advantages of a 15-Year Mortgage

Now think about a 15-year term. That $100,000 mortgage at 5% repaid over 15 years costs $790.80 per month, which is $253.97 more than the 30-year term. So, you have to be able to make that higher payment. For many, though, the comparison between house payments and rent makes this higher payment easier to bear. This is especially true when you also take into account the federal and state tax benefits of deducting interest. If your combined federal and state tax rates add up to 32% percent, for example, your after-tax cost for the 15-year mortgage is reduced to $538. This is about the same as the 30-year payment and comparable to a $538 rental each month with no tax benefits.

Over 15 years, the total of your payments on a $100,000 mortgage comes out to $142,344 – or about $50,900 lower than the cost of a 30-year mortgage. And the acceleration is much better as well. After five years, you will have paid off about one-fourth of the debt, compared to only about 8% with the 30-year term.

Another advantage is that lenders often will offer a lower interest rate on the 15-year than on the 30-year contract. A one-quarter percent reduction is worth about $14 per month. Over 15 years, that equals $2,500. However, the faster payoff has to be practical. If you cannot afford the higher payments even after tax benefits, it will not make sense for you to agree to the shorter term. But as long as that is affordable, it makes sense and saves money.

If you cannot afford to go as low as 15 years, you can enter a 30-year mortgage and add extra payments based on what you can afford. For example, adding $48 per month to the 30-year payment reduces your repayment term five years. It also saves about $18,000 in interest expense. If you increase the 30-year payment by $123 per month, you cut 10 years off the repayment and save nearly $35,000 in interest.

Michael C. Thomsett is author of over 60 books, including Annual Reports 101 (Amacom Books Press), Trading with Candlesticks (FT Press) and the recently released new book, Getting Started in Stock Investing and Trading (John Wiley and Sons).  He lives in Nashville, Tennessee and writes full time.

Real estate prices have been in the tank not just for months, but for nearly three years. This is one of the longest down market periods in real estate over the past century. Foreclosures are up and many people are adopting a “wait and see” attitude. One symptom of this is increased demand for apartments and other rentals. Everyone is afraid.

But how can you tell when the market is turning around?

Here are some important guidelines for understanding real estate in your city or town:

Remember, all real estate is local

Don’t judge your local market based on the national averages and what you hear on financial news shows or read in the paper. The national averages are revealing but they don’t really apply. All real estate markets are local, and economic conditions where you live determine how the market acts.

Keep an eye on local employment trends

Are more jobs coming to town, or are big employers leaving? People need jobs to buy houses. So if employment is on the decline, housing will be too. But if employers are relocating and offering jobs, and if the population is rising, that’s one of the best signals for the future of the local real estate market.

Track applications for building permits for residential projects

A subtle but important indicator is applications for permits. This tells you how much building is going to be taking place over the next year. Are applications rising or falling? If they are on the rise, it means that builders and developers believe the demand is there. They are not likely to invest in new construction if there is no demand.

Watch three local stats: inventory, time on the market and the spread

These are the three most important tests of local real estate trends. Inventory is the number of houses for sale. Normally, this number is divided by the average sales per month. The result is the number of months of inventory. If this is falling or remaining low, that’s a healthy sign. But if your area has more than 12 months of inventory, the market is still soft.

Time on the market is also important and easy to track. How long does it take to sell and, equally important, how is that number changing? If it took over six months a year ago, but today the average house is selling in three months, that indicates a positive trend in demand for housing.

The spread is the percentage difference between the list price and the sale price. If houses are selling within 5 percent or less of the list price, it’s a healthy market. If it is higher, then it indicates that the market is still weak. All of these statistics should be studied as part of a trend. Look back at least one year and try to spot the direction the market is heading.

Remember, bargains are not always bargains. Be a smart buyer

Getting a bargain price is great. But be smart and do your own research. Some properties, such as foreclosures, are sold “as is,” meaning any defects are your problem. Many foreclosed homes get that way because they have expensive defects, so always hire an independent home inspector to assure you that there are no unpleasant surprises waiting for you. (Check the American Society of Home Inspectors to find a professional inspector in your area.)

Michael C. Thomsett is author of over 60 books, including Getting Started in Real Estate Investing (John Wiley and Sons), and The Landlord’s Financial Toolkit and The Real Estate Investor’s Pocket Calculator (both Amacom Books Press). He lives in Nashville, Tennessee and writes fulltime.

If you have looked at real estate as a possible way to diversify your portfolio lately, you probably have a host of reasons to stay away. These are likely to include: uncertainty about the market, illiquidity, the high dollar amount needed for a down payment, cash flow requirements and the hassles of dealing with tenants.

All of these may be overcome easily by investing in real estate indirectly.

The exchange-traded fund or ETF is an ingenious kind of mutual fund. Unlike the old type, in which a team of managers decided where to invest, the ETF has a predefined “basket of securities.” The ETF is designed to focus on one market, such as real estate. (Other ETFs focus on market sectors, currencies, commodities, or countries.)

Another compelling feature of the real estate ETF is that you can buy and sell shares instantly through the stock exchange. ETF shares act just like stocks, enabling traders to move in and out of positions through online order placement. Old-style mutual funds always settled at the day’s closing price, and only through the fund management.

Here’s a sample of real estate ETFs:

iShares Dow Jones US Real Estate (IYR)

iShares Cohen & Steers Realty Majors (ICF)

PowerShares Active U.S. Real Estate (PSR)

NOTE: None of these are recommended specifically; this list is a starting point for further research.

You can also buy shares in ETFs focusing on real estate investment trust (REIT) shares. The REIT is always a diversified real estate investment, so this is like buying a two-tiered diversified fund. Among these are:

Vanguard REIT Index ETF (VNQ)

SPDR Dow Jones Wilshire REIT (RWR)

iShares FTSE NAREIT Mortgage Plus Cp. Index (REM)

iShares FTSE NAREIT Residential Plus Cp. Index (REZ)

First Trust S&P REIT Index (FRI)

iShares FTSE NAREIT Real Estate 50 (FTY)

Wilshire US REIT ETF (WREI)

iShares FTSE EPRA/NAREIT North America (IFNA)

iShares FTSE NAREIT Retail Cp. Index (RTL)

PowerShares KBW Premium Yield Equity REIT (KBWY)

Some of the REIT-specific ETFs focus on equity real estate, while others buy real estate mortgages. Before picking any REIT, you should be sure that you understand the mix of securities in the ETF basket.

When you buy real estate directly, limited capital invariably also limits the number of properties you can buy as well as location. Cash flow is always an issue as well, so you have to know how strong or weak rental demand is when you buy. The ETF solves these problems by holding a variety of different real estate, through corporations or REITs. However, this does not replace the need for research, a point too easily overlooked. Just as you want to research a traditional mutual fund to make sure it matches your risk tolerance, the ETF market has to be studied carefully before money is put into the purchase of shares.

Michael C. Thomsett is author of over 60 books, including Getting Started in Real Estate Investing (John Wiley and Sons), and The Landlord’s Financial Toolkit (Amacom Books Press). Thomsett’s website is www.MichaelThomsett.com. He lives in Nashville, Tennessee and writes fulltime.

Like any area of personal finance, there are no “secrets” to buying a house.

But it does involve thinking different than most other people, who make the biggest purchase of their lives without understanding the true costs. Although I may be aggressive with my asset allocation, I’m conservative when it comes to real estate. That means I urge you to stick by tried-and-true rules, like 20 percent down, 30-year-fixed-rate mortgage, and a total monthly payment representing no more than 30 percent of your gross pay.

If you can’t do that, wait until you’ve saved more. It’s okay to stretch a little, but DON’T stretch beyond what you can actually pay. If you make a poor financial decision up front, you’ll end up struggling — and it can compound and become a bigger problem through the life of the loan.

Don’t let this happen, because it will undo all the hard work you put into other areas of your financial life. If you make a good financial decision when buying, you’ll be in an excellent position. You’ll know exactly how much you’re spending each month on your house, you’ll be in control of your expenses, and you’ll have money to pay your mortgage, invest, take vacations, buy a TV, or whatever else you want to do.

Here are some of the things you need to do to make a sound decision:

1. Check your credit score.

The higher your score, the better the interest rate on your mortgage will be. If your credit score is low, it might be a better decision to delay buying until you can improve your score. Good credit translates into not only a lower total cost, but lower monthly payments.

The table below (reproduced from MyFico.com) shows how interest rates affect your mortgage payment on a thirty-year fixed $216,000 loan:

* APR figures calculated in June 2011

2. Save as much as possible for the down payment.

Traditionally, you had to put 20 percent down. In recent years, people were allowed to put as little as zero down — but it’s becoming all too clear that this was a very bad idea. If you can’t save enough to put 20% down, you have to get something called Private Mortgage Insurance (PMI) which serves as insurance against your defaulting on your mortgage payments.

PMI costs between 1 and 1.25 percent of the mortgage, plus an annual charge. The more you put down, the less PMI you’ll have to pay. If you haven’t been able to save at least 10 percent to put down, stop thinking about buying a house. If you can’t even save 10 percent, how will you afford an expensive mortgage payment, plus maintenance and taxes and insurance and furniture and renovations and…you get the idea. Set a savings goal for a down payment and don’t start looking to buy until you reach it.

3. Calculate the total amount of buying a new house.

Have you ever gone to buy a car or cell phone, only to learn that it’s way more expensive than advertised? I know I have, and most of the time I just bought it anyway because I was already psychologically set on it. But because the numbers are so big when purchasing a house, even small surprises will end up costing you a ton of money. For example, if you stumble across an unexpected cost for $100 per month, would you really cancel the paperwork for a new home? Of course not. But that minor charge would add up to $36,000 over the life of a thirty-year loan — plus the opportunity cost of investing it.

Remember that the closing costs – including all administrative fees and expenses – are usually between 2 and 5 percent of the house price. So on a $200,000 house, that’s $10,000. Keep in mind that ideally the total price shouldn’t be much more than three times your annual gross income. (It’s okay to stretch a little here if you don’t have any debt.) And don’t forget to factor in insurance, taxes, maintenance, and renovations. If all this sounds a little overwhelming, it’s telling you that you need to research this stuff before buying a house. In this particular case, you should ask your parents and other home owners for their surprise costs.

4. Get the most boring, conservative loan possible.

I Like a thirty-year, fixed-rate loan. Yes, you’ll pay more in interest compared with a fifteen-year loan. But thirty-year loans are more flexible because you can ALWAYS pay extra toward your loan and pay it off faster if you want to. But you probably shouldn’t. Consumer Reports simulated what to do with an extra $100 per month, comparing the benefits of prepaying your mortgage versus investing in an index fund that returned 8%. Over a twenty-year period, the fund won 100% of the time. As they said, “…the longer you own your home, the less likely it is that mortgage prepayment will be the better choice.”

5. Don’t forget to check for perks.

The government wants to make it easy for first-time home buyers to purchase a home. Many state and local governments offer benefits to first-time home buyers. Check out HUD’s directory of local homebuying programs in your state. Also, check with your employer, who may also offer special first-time home-buying rates. Ask — it’s worth it. Finally, don’t forget to check with any associations you belong to, including local credit unions and teacher’s associations. You may get access to special lower rates. Hell, even check your Costco membership (they offer special rates for members, too.)

6. Use online services to comparison shop.

You may have heard about Zillow, which is a rich source of data about home prices all over in the United States. Also check out Redfin.com which is disrupting the real estate market by letting home buyers get access to more information — like local tax records — online. You can do your research online and Redfin will send an agent to negotiate for you. They claim an average savings of $14,000. For your homeowner’s insurance, check Insure.com to comparison shop. And don’t forget to call your auto insurance company and ask them for a discounted rate if you give them your homeowner’s insurance business.

Ramit Sethi is the author of the New York Times best-selling book I Will Teach You To Be Rich and runs a blog of the same name with 300,000 monthly readers. Click for a free chapter from his book.

With real estate prices depressed, this is a tempting time to buy a home, but it’s only wise if you know how to spot value. Making a critical evaluation of a property is the real challenge.

New homebuyers tend to trust agents to guide them to houses where values are fair and the trend is upward-moving. But can you trust the agent? Not always. Some agents simply don’t know the facts about an area; others may be more interested in getting an offer on their listings rather than someone else’s.

Most agents are going to do their best to help you find the best home possible. Even so, you can learn a lot in a simple drive-through of a neighborhood. It is difficult to locate the best area for yourself if you are not familiar with the city or town, which is why it could make sense to rent for a few months until you know your way around. If you think you know the area where you want to look for a home, drive through the area and ask yourself the following questions:

Are there a large number of empty lots and for-sale signs?

When a neighborhood is in bad shape, it is unlikely that new houses will be built. So when a house is destroyed by fire or falls apart, lots may be cleared but left empty, perhaps for many months or even years. This is a very negative sign; it means property values are not high enough to justify new construction.

If an excessive number of homes are for sale, that’s another danger signal. People are trying to sell and leave. The same applies if you see a lot of those signs with the word “foreclosed” on them.

Are houses and yards being maintained?

This is a telling sign. When you see pride in ownership in the buildings and landscaping, it means the owners are proud of their investment. When you see run-down buildings and land, it means a high number of rentals or owner-occupied homes whose owners don’t value their properties.

Is there a lot of mixed use, or are single-family residential areas distinct?

If the neighborhood mixes single-family with apartment buildings, corner stores, gas stations, and other businesses, it is a sign that the zoning is not strictly single-family. Worse yet, it could mean zoning rules are on the books but not being enforced. Some controlled mixed use is a positive trend, but we all know the difference when we see it.

What’s the condition of the school grounds?

The condition of school buildings and grounds is just as revealing as education statistics. You cannot always tell the whole story by believing what you read in the papers, either. You need eyes on the school grounds. Are they maintained and kept in good shape? Or are they run-down? When schools are not physically maintained, it is a signal that they are not the best schools for your children.

Are you comfortable walking the streets at night?

Check out the “theme” of the neighborhood. Some areas are completely different by day and night. Crime statistics don’t tell the whole story, either. Look for graffiti, people standing around on street corners, and get a sense of whether the streets feel safe or dangerous. Make sure the neighborhood where you want to buy is safe and secure.

It is easy to judge a neighborhood using common sense. Many homebuyers look in areas not suitable for them because they trust someone else and fail to do their own investigation. You learn so much just driving around; that could be your best first step in neighborhood evaluation.

Michael C. Thomsett is author of over 60 books, including Annual Reports 101 (Amacom Books Press), Trading with Candlesticks (FT Press) and the recently released new book, Getting Started in Stock Investing and Trading (John Wiley and Sons). He lives in Nashville, Tennessee and writes full time.

Everywhere you look, there are signs – people are re-evaluating their lifestyle choices and choosing to live more frugally. Our latest world-wide recession has transformed people who once lived at the edge of their budgets into born-again savvy savers. And the trend can be seen in housing as well…

Until recently, Americans have been in the habit of steadily increasing their square footage, year after year. The average single-family home grew from 1,780 square feet in 1978 to 2,479 square feet in 2007. But this upward climb came to an abrupt halt when the  National Association of Home Builders announced in 2009 that the median size of new homes fell for the first time in 30 years, with new housing starts averaging 2,094 square feet.

And while new construction is still at lower levels than in years past, builders who specialize in smaller, greener homes have seen an uptick in business. Take, for instance, Jay Schafer, author of The Small House Book. Schafer has received attention from Oprah, CNN and the New York Times for the success of his Tumbleweed Tiny House Company, which specializes in small house plans, as well as ready-made tiny houses that can be delivered to your door.

Indeed, it appears that the small house trend is truly gaining momentum, and for good reason. Having a smaller living space can send ripples of savings throughout your lifestyle. Here are some ways a small house can equal big savings:

Building or purchase cost reductions

It’s a no-brainer that big houses have big price tags. The most obvious financial advantage of a small house is that it’s less expensive to build (or purchase, for existing homes). Less materials, less space to cover, less square footage – all result in a smaller mortgage payment.

Energy efficiency

Naturally, less space to heat and cool means smaller energy bills. And when you have a smaller abode, efficiency upgrades – like new insulation or windows – also costs less.

Less hoarding

When you have less storage space, you tend to collect less clutter. When we have big rooms, we feel the need to fill them with things we don’t really need. Having smaller areas encourages more thoughtful and purposeful purchases – equaling less frivolous spending.

Maintenance economy

All homes require ongoing maintenance – from painting to cleaning to re-roofing. When there’s less area to cover, there’s less expense involved in these inevitable tasks.

Simply put, scaling down your living space means spending less. And more people are discovering that small and charming is more desirable than grand and showy when it comes to saving money for other goals (like paying off debt or taking vacations).

But beyond pure economics, the movement to smaller living spaces also reflects a shift to a simpler lifestyle – one that encourages spending one’s personal energies on more than just material gain. Find out more about the movement to live large through living small by checking out the Small House Society, whose motto is, “Better living through simplicity.”

The Tiny House – Save Big By Living Small was provided by Zing!, Quicken Loans’ blog about mortgages, home ownership and personal finance.

If you’re one of the millions of Americans who experienced either a foreclosure or short sales due the housing downturn, you might be left wondering where to go from here, when it comes to rebuilding your credit score.

Here is the information you must know about your credit, to best recover from a foreclosure or short sale.

Know How Things Ended

Though you may be relieved to have finally resolved your housing situation, don’t put it out of your mind just yet. Keith Gumbinger, mortgage expert for HSH.com says that knowing the final terms of the arrangement made with your lender plays a role in rebuilding credit. That’s because different defaulted home loan terms come with different ramifications to your credit score. Know whether you had a short sale (the lender allows you to sell the house for less than the balance on the mortgage, and may or may not require you to make up the deficiency), an involuntary foreclosure (you stopped making payments and the property, and potentially your assets, were seized), or you negotiated a deed-in-lieu of foreclosure (a voluntary process in which you “hand over” the deed to the lender, shortening the process and accompanying expenses), as well as the specific terms were agreed upon. When it comes to foreclosures and short sales, no two agreements are alike; the terms and conditions have different impacts on credit scores, how they are reported to the credit bureaus, and how long they take to “fall off.”

Confirm Where You Are Now

While short sales are often perceived as more “favorable” when it comes to defaulting on a home loan, FICO conducted a study simulating the aftermath of a foreclosure and a short sale, and revealed that in regards to credit score impact, there isn’t much difference between the two events. The real gauge, it seems, is in the starting credit score before the default took place.

FICO examined three hypothetical consumers with starting credit scores of 680 (customer A) 720 (customer B), and 780 (customer C). It found that despite whether the loan default was a short sale or foreclosure, customer C’s credit score was most impacted, indicating that the higher the credit score, the longer it takes to restore. Further, time is critical in rebuilding credit worthiness: a short sale with no deficiency balance will generally require at least three years before the credit score will increase. In the case of a foreclosure, the borrower must wait for at least seven years, and in some cases, up to ten, if a bankruptcy filing was involved.

Keep Credit Cards Under Control

After you have completed the foreclosure or short sale, request your credit report from Annualcreditreport.com, which allows you one free credit report each year. Confirm that the report does not contain any errors, or reflect old debts that were paid off, and report any disputes to Experian, TransUnion and Equifax immediately. Ornella Grosz, author of Moneylicious: A Financial Clue For Generation Y says that one way to add points to your credit score is by paying off or lowering your existing credit card balances, and that  “about 30 percent of your credit score is made up from keeping balances low. The lower your debt-to-income ratio, the better.” John Ulzheimer, Mint’s credit columnist, also addresses this the post What Kind of Debt Pay-Off Boosts Your Fico Score Most.

Set up automatic bill pay on all of your existing credit accounts to make certain that creditors are always paid on or before the due date (don’t play with grace periods when you’re trying to rebuild credit). Or use the “Bill Reminders” feature on your Mint.com account. If you have missed payments in the past, commit to starting good habits now. You can rebuild a score by paying every bill on time. On the contrary, skipped or late payments will reduce your credit score further.  Don’t attempt to raise your credit score by closing open credit lines, and know that removing the credit availability might actually hurt your score more after a short-sale or foreclosure, when access to new credit will be limited. (To potential lenders, closing the credit, even it you haven’t used it in years, makes it appear as though you are closer to being “maxed out” than you really are).

If you are left with no credit lines after the foreclosure or short sale and cannot find unsecured lines of credit, apply for a secured credit card, which are offered by many financial institutions and credit unions. Secured cards will require you to deposit funds with the creditor, in exchange for a credit card with a credit line of the same amount. (For example, if you put $500 down, that will be the amount of your secured credit line). If you use secured cards responsibly, they will help to slowly increase your credit score. Over time, the lender may raise your line of credit for “good behavior,” and eventually, you’ll be a candidate for unsecured credit again. However, Grosz cautions to read the fine print in the agreement for all secured cards, and confirm that you will not be charged additional fees for use.

Be Patient

Rebuilding credit after a short sale or foreclosure can be frustrating, but it is a process most impacted by being patient. Amber Stubbs, senior managing editor at Cardratings.com says “the more time passes, the less a black mark affects your credit, and you won’t be able to make a full recovery until the derogatory item is off your credit report. Most derogatory items, including foreclosures, fall off seven years after the last activity on the account. If you manage other accounts responsibly while you wait, you should be in good shape by the time the foreclosure disappears from your credit report.”

Stephanie Taylor Christensen is a former financial services marketer based in Columbus, OH. The founder of Wellness On Less, she also writes on small business, consumer interest, wellness, career and personal finance topics.

Arguably, now’s a great time to buy a home — at least when it comes to affordability. According to economists with the National Association of Realtors, the Housing Affordability Index, a measure of the relative affordability of purchasing a new home, is at the highest level since the index was created in 1971.

Let’s say you are considering it for all the right reasons (you want to own a home for the long-term, rather than buy a property you view as an investment, for example) and you are well-qualified to buy a home in this market.

One of the first questions you should ask yourself is just what type of property to consider. A single-family home? A condo? A co-op? Or a townhome?

You may have your emotional preferences, but you should also know the pros and cons of each property type before you make a rational choice. Let’s review them one by one.

The Fixer-Upper

First-time home buyers often find when they first start looking at homes that there is a difference between what they want and what they can afford. A fixer-upper can often bridge that affordability gap because the market discounts properties that need work. First-time home buyers can, however, easily find themselves in over their heads if they’re not careful.

Pros

• -Fixers can be found at a deep discount to properties that are in “move-in” condition.
• -Fixers can be a good investment as cosmetic improvements can dramatically improve marketability.
• -Ownership is fee-simple and you can do what you please with your land and exterior of the dwelling.

Cons

• -The novice can easily miss serious and expensive repair items with a typical walk-through inspection.
• -Minor repair items can develop into full-blown structural problems if not properly attended to after taking ownership.
• -Major repair work can keep you from occupying the property immediately.
• -Construction projects are almost always more expensive than you expect.

How to Protect Yourself

• -Don’t overestimate your ability to do the repair work yourself.
• -Pay for your own home inspection from an American Society of Home Inspectors (ASHI) certified inspector.
• -Get contractor bids before you close so you know what you are up against.
• -Create a project plan and budget for improving your fixer.
• -Assess the livability of the property during needed repair work.

Condominiums

Condominiums have long been popular with first-time home buyers. In this form of ownership, you own the inside of your unit and have a percentage ownership of the land and common areas of the development.  You do not own or have the right to change the exterior of the unit.  Every condo project has its own homeowner’s association (HOA) that is responsible for maintenance of common areas and enforcement of HOA policies and restrictions.

Pros

• -Affordability is generally much better than a traditional single family house.
• -Maintenance work requirements are minimal.

Cons

• -HOA fees can be significant and can rise when the HOA budget runs dry or when major repair work is needed.
• -HOAs can be dysfunctional and poorly run.
• -HOA rules can restrict your ability to rent out your unit.
• -Can be more difficult to sell in a slow real estate market.
• -Condos in projects that do not meet FHA (Federal Housing Administration) or FNMA (Fannie Mae) standards can be difficult to sell or even refinance.

How to Protect Yourself

• -Be careful to review provisions of condominium by-laws and conditions, covenants and restrictions (CC&Rs) carefully.
• -Due to project approval requirements, avoid condo projects that are anywhere near the following percentages: 30 percent of the units are non-owner occupied, 15 percent of the units are delinquent on HOA dues or 10 percent of the units are owned by one individual.
• -Check to see if your project is FHA and/or FNMA approved.
• -Review (or better yet, have an accountant review) the HOA budget carefully.
• -Avoid any HOA where there is any hint of issues with construction defects.

Cooperative (Co-op)

A cooperative, also known as a co-op, is another form of ownership that is most common in certain areas of New York and New Jersey. Co-ops are similar to condominiums, but rather than owning a percentage of the land and improvements, you own shares of a corporation. As a shareholder you own the rights to use the air space within your unit and access common areas, but you do not own the walls or any portion of the building outright. Co-ops have a board of directors (BOD) that is responsible for maintenance and enforcement of policies.

Pros

• -Affordability  is similar and sometimes better than condominiums.
• -Maintenance work requirements are minimal.
• -Often provide security and, in some cases, concierge services.

Cons

• -You and whoever you decide to sell the unit to will need to interview with and get the blessing of the board of directors; you (as a buyer) or the buyer of your property can be turned down for any reason or no particular reason at all.
• -Co-ops can be more difficult to sell in a down market than other property types.
• -Co-op maintenance fees can be very high, but generally include property taxes in addition to maintenance, security and, in some cases, utilities.
• -Co-op policies can be restrictive and the BOD has the power to change policies at any time.
• -Co-ops can restrict your ability to sublet or rent your property.
• -Co-ops can be more difficult to finance as some lenders will not lend on this form of ownership.

How to Protect Yourself

• -Review the co-op by-laws, policies and restrictions very carefully.
• -Get to know the board of directors; if you’re not comfortable with them, they’re probably going to have an issue with you.
• -Answer the interview questions of the board of directors as honestly as possible.
• -Carefully review the budget.
• -Plan for maintenance fee increases over time.

Planned Unit Development (PUD) Townhome

Townhome is a descriptive term for a dwelling that shares a common wall with other dwellings. Many townhomes built these days are located in so-call planned unit developments, or PUDs. A PUD is a planned community that generally has common areas and roads maintained by an HOA. The HOA is also generally responsible for maintenance of the exterior of the units and insurance.

Pros

• -Affordability is similar to condominiums.
• -Lender project approval requirements are not as stringent as condominiums or co-ops.
• -Maintenance requirements are minimal.
• -HOA fees are generally lower than condominiums but do not include property taxes.

Cons

• -Neighbors and privacy can be an issue.
• -Typically have little outdoor yard space compared to detached dwellings.
• -Can be more difficult to sell in a down market compared to detached dwellings.

How to Protect Yourself

• -Review the PUD by-laws and restrictions carefully.
• -Review the HOA budget to ensure the stability of the HOA.
• -Ask other homeowners about how they like living in the PUD.

Home Buyer Beware: Pros and Cons of Different Property Types was provided by CreditSesame.

It’s official. Housing prices are back in the dumps. The modest rebound that began in late-2009, fueled mainly by a first-time-buyer tax credit, ran out of steam in late-2010 and reverted to a recession in the first quarter of the year, according to the S&P/Case-Shiller index.

Nationwide, average prices have sunk to levels not seen since 2002. But when it comes to real estate, it’s all about location, and some areas have seen their declines stretch back even farther, while a few lucky places have only had modest drops. Click on the infographic above to see a region-by-region breakdown of the double-dip recession showing exactly how far back home values have declined.