Dana Wade, the acting Federal Housing Administration commissioner, minced few words in testimony last month before a U.S. House of Representatives committee. The FHA, the federal housing agency that insures mortgages made to first-time and lower-income buyers, has seen “certain trends and indicators of potential defaults,” Wade said. The number of FHA-insured borrowers who are behind on mortgage payments has jumped, Wade wrote in her testimony. The use of down payment assistance is up. The frequency of FHA borrowers who are spending more than 50 percent of their income on debt payments has increased, too. And the number of borrowers refinancing their homes to take cash out for other uses has swelled. “Some of this increase may be attributable to a decrease in mortgage credit quality,” Wade warned. “Indeed, lower credit quality is a concern for FHA because it hampers borrowers’ ability to withstand adverse events.” During the hour-long … [Read more...] about Mortgage lenders are making it easier for you to buy a house. But are they repeating last decade’s mistakes?
We buy any house
Q: Our daughter just started college and we are seriously considering buying a house near the campus. Our plan: Assuming she stays in college for at least four years, when she finishes her first year, she can move into the house, and we can rent rooms to other college kids. We believe our daughter is capable of managing the property.Our problem: Her college is in a different state, and while we have experience buying property where we live, we want to make sure we are doing the right thing. Any suggestions? A: Without knowing all the facts, it sounds like a good plan; it will save you money on college expenses and hopefully make you some money at the same time.You should immediately retain a local attorney. If you don’t have any names, you can contact the local bar association in the county or state where the college is located, and they will provide you with some names.Once you have a lawyer on your side, she or he should assist you in getting a local real estate agent that will … [Read more...] about Is it smart for parents to buy a house for their college kid, then rent out the rooms?
For most people, owning a home is one of the centerpieces of financial independence. If you can buy a home and set a floor on your housing costs, it gives you a great deal of financial freedom, especially when you retire. But housing these days is getting expensive, particularly in cities like Denver. According to Zillow, the average cost of a home in Denver is about $400,000, which is around 8 percent more than last year. In early 2012, the average cost was roughly $215,000, which means prices have been appreciating at about 10 percent a year. For most people, their household income hasn’t risen 10 percent a year. Thus, housing just keeps getting more expensive. This is true in many cities that become hubs for technology and high-skill jobs, as Denver is becoming. Places like San Francisco, Seattle, Washington, Boston and New York simply have not gotten cheaper. Given what we know about rising housing costs in attractive cities, if you want to stay here, you … [Read more...] about It’s easier to qualify for a mortgage, but should you really stretch to buy a house now?
Last Updated May 31, 2011 10:48 AM EDT The stream of depressing housing numbers continues to roll in. The closely watched Case Schiller index of housing prices dropped below its April 2009 low, indicating that housing is now officially in a double dip nationwide, and 31% below its peak in the spring of 2006. That's discouraging news for the economy, since homeowners aren't likely to feel like splurging if their biggest asset is crashing and they're under water on their mortgage. And the farther under water you get, the greater the the temptation to walk away from your mortgage, dumping more inventory on an already glutted market. It's hard to find a lot of good news in all this. Still, it's an ill wind that blows no one any good, and there is one group that stands to benefit from the housing market's travails: Buyers. Only problem: They don't seem to care. A New York Times story this morning suggests that not only are many potential buyers frozen out of the market-stuck in … [Read more...] about Forget the Double Dip: 3 Good Reasons to Buy a House Anyway
Last Updated Apr 29, 2010 1:11 PM EDT Many prognosticators believe the next few years will see tepid returns in the stock and bond markets — but what's in store for the post-crash real estate market? For anyone shopping for a house, the news could be good. Indeed, if there's a ray of sunshine anywhere in the "new normal" economic outlook — slow economic growth, unemployment hovering above 8 percent, more regulation, less borrowing — it is shining on homebuyers. Given record inventories and continued high foreclosure levels, home prices will bounce along the bottom for a while, at least according to the crystal ball wielded by David Berson, chief economist with mortgage insurers PMI Group. And Berson sees little indication that you’ll have to pay more than 5.5 percent for a mortgage this year, maybe 6 percent in 2011. All of which means real estate is a solid buyer’s market. You can get the house you want at a good price, and you can take your time … [Read more...] about Real Estate: The New Rules for Buying a House