8 signs you’re ready to buy your first home

The squeeze is on for renters. Apartment rents are expected to rise 5.3% this year, according to the National Association of Realtors. That’s about double last year’s increase, and it’s the highest jump since 2000. Until now, rents have seen slow growth over the past few years as the booming real estate market has lured away renters into homeownership.

But that’s starting to change. Interest rates are rising and home price appreciation is slowing, so fewer buyers are looking for new homes. That gives landlords the upper hand to raise rents. Meanwhile, the real estate market is starting to turn from the seller’s favor toward the buyer’s. So if you’re a renter who has been dreaming of homeownership, is now a good time to take the leap?

Sure, a cooling real estate market is good news for buyers because it’s easier for them to negotiate a deal. But it shouldn’t be the main reason that pushes you into your first home. In fact, buying your first home is a personal decision that you should make independent of what the market may or may not be doing.

“Time means nothing,” says Michael Eisenberg, a CPA and financial planning specialist in West Los Angeles. You can’t predict what will happen to home prices in your neighborhood in the next few months, let alone the next few years. But if you’re looking to make the long-term commitment of homeownership, it helps to approach the decision like you would any business decision. You don’t want to buy on emotion, or because everyone else is doing it. “This is the biggest financial move a young person may ever make,” Eisenberg says. “You should make the investment because it makes sense for your finances. You buy when you’re ready.”

Constructing an Alternative to the Subprime Market

The subprime mortgage market remains open for business, with more realistic underwriting rules than before the house-price bubble broke and the number of troubled loans began to rise.

Nonetheless, there is talk of coming up with a new way to provide mortgages to the credit-impaired borrowers the subprime market serves. The Federal Housing Administration is the only plausible substitute. But converting the FHA into a viable substitute for the subprime market would require a number of far-reaching changes:

Putting a Stop To a Credit Ruse

The days may be numbered for dozens of Internet-based companies that promise to quickly boost FICO credit scores by 200 to 300 points.

Fair Isaac, the developer of the widely used FICO score, plans to introduce key changes designed to derail schemes that transplant high-quality credit card histories to the files of people with low FICO scores.

Read the rest in the Post.

U.S. Mortgages Enter Foreclosure at Record Pace

The number of Americans who may lose their homes because of late mortgage payments rose to a record in the first quarter, led by subprime borrowers pinched in an economy that grew at the slowest pace in four years.

The share of all mortgages entering foreclosure rose to 0.58 percent from 0.54 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. Subprime loans entering foreclosure rose to a five-year high of 2.43 percent, up from 2 percent, and prime loans rose to a record 0.25 percent.

The median U.S. home price probably will fall this year for the first time since the Great Depression in the 1930s, according to Lawrence Yun, a National Association of Realtors economist. Tumbling prices make it difficult for people who fall behind in loan payments to escape foreclosure by selling, said Doug Duncan, chief economist for the Washington-based bankers’ group.

LHV Back For Good

After a month long struggle with a bad computer virus, The Voice of Linton Hall, Realtors is back!