Total Foreclosure activity for April, including default notices, scheduled auctions and bank repossessions, was down 5% from March, according to Realty Trac.

Much of the improvement, however, can be attributed to declines in only a handful of states, especially those that had been hardest hit by the housing crisis and which did not require judicial review of foreclosures.

A shrinking supply of homes on the market and the reappearance of multiple offers helped drive the median sales price up 12.4% to $163,000 over the previous April.

That’s the largest increase since January 2004, the Minneapolis Area Association of Realtors® said in its monthly report Thursday May 10>

With interest rates staying near 4% more individuals are looking to get a mortgage or refinance, but experts warn that even though the low rate is enticing, you have to be prepared for a long , paperwork -filled process.

Knowing your credit score and studying your credit history should be done before starting the mortgage journey. If you find errors, fix them before applying. The next step should be determining how much your can afford to borrow, and then start the house hunt.

The road to sealing a mortgage transaction is a long road and to keep you on track and avoid any potential potholes, here are nine mortgage mistakes  to avoid:

1.Making Major Purchase before closing

2Not knowing how much the house is worth

3Not vetting lenders thourghly

4Closing under pressure

5Withhoulding information

6Taking too long to supply documentation

7Failing to review loan documentation

8Waiting too long to lock in a rate

9Failing for explore all financing options.

The Median sale price rose 7.1 percent last month up $135,000, the biggest year-over-year increase since April 2010, according to a report from the Minnesota Association of Realtors®. Sales were also up in March, rising 7.5 percent year over year to 6,134.

The statewide numbers mirrored robust sales in the Twin Cities area in March, which brought the metro area its first monthly increase in nearly two years.

Reduced prices, record-low mortgage rates, higher rents and an improving job market appear to be emboldening many would-be buyers. Open houses are drawing crowds. A wave of foreclosures is leading investors to grab bargain-priced homes.

And many people seem to have concluded that prices won’t drop much further. In some areas, prices have begun to tick up.

Both home prices and sales are expected to increase in 2012. Lawrence Yun, chief economist for NAR, stated, “Falling visible and shadow inventory (bank-held properties), combined with a dearth of new-home and apartment construction during the past three years, assure that rents will continue to rise, with likely home price increases in 2012.”

As rents continue to rise, buying becomes a more and more attractive option as home affordability, or the percent of income it takes to pay the mortgage, continues to be among the most favorable inhistory. Trulia’s Winter 2012 Buy vs. Rent Index, which measures the relative cost of renting compared to asking prices of homes found the in 98% major metropolitan areas sampled, it was more affordable to buy than to rent.

According to the FHA’s new rule, borrowers with any credit disputes of more than $1,000 on their file will not be able to get a government-backed loan. Borrowers will either have to pay the remaining balance of the credit amount or show proof of entering into a payment plan for it. 

The FHA is easing those restrictions somewhat, according to new instructions it provided to lenders, HousingWire reports. Borrowers will be exempt from the new rule if the credit amount is from a “life event.” This might include a medical bill, death, divorce, or unemployment, HousingWire reports. 

“The borrower may provide a written explanation and documentation as it applies to all types of disputed and collections accounts if it makes sense, and is consistent with other credit information in the file,” according to instructions provided to lenders.

“This spring will be the litmus real estate test for housing demand,” says Steven Ricchiuto, chief economist for Mizuho Securities USA. 

The sluggish housing market in recent years, which has seen a flood of foreclosures and falling home values, has been inching toward a turnaround in recent weeks. Existing-home sales and pending home sales are up about 9 percent compared to the same time year ago, according to February housing data by the National Association of REALTORS®.

Paul Dales of Capital Economics told USA Today that he expects the spring selling season to “be the best in four or five years” for the real estate industry. 

Economists predict that where the housing supply of for-sale homes has dropped the most and is more balanced is where prices have the greatest potential of gaining this year. For example, Phoenix has had a 42 percent drop in its housing inventory recently and is projected to see prices gain 5 percent this year, according to Eric Fox, an economist for Veros Real Estate Solutions.

FHA is generally more flexible than conventional loans in its qualifying guidelines.  Among them are lower credit score requirements and debt to income ratios.   These more flexible guidelines have made FHA financing most popular for the first-time home buyer.

First-time homebuyers are currently making up 37% of the buying market and since 2006, FHA’s market share has increased from 3% to 30%.

Two-thirds of renters — across educational and demographic levels — say they want to purchase a home in the future, according to a quarterly national housing survey of 3,000 Americans conducted by Fannie Mae. 

“In spite of the impact of the housing crisis on home values and home ownership rates across the country, Americans by and large still hope to become home owners,” says Doug Duncan, Fannie Mae’s chief economist. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

However, Duncan says many renters are expressing caution about the homebuying process when it comes to qualifying for a mortgage and navigating the mortgage process. 

“If potential home owners avoid the process because they believe it to be too complex, we will likely see a continued impact on home ownership rates,” Duncan says.