Know the Risks of Buying a Home in a Changing Market

In a recent article titled “Buying a First Home Costs More Than You Think, Especially Now”, The Wall Street Journal described the perils of buying a home in today’s market. With interest rates rising, it can be a risky time to buy a home—and many buyers are making it even more risky buy doing things like stretching their budgets to the max and waiving inspections to get into a house. LDSAgents.com suggests that it’s time to slow down the process and think about what you are getting yourself into.

First, living on the edge financially to get into a house can be fraught with danger when you have to sell. As experienced home owners know, rising interest rates generally result in declining home values. People can only afford so much in monthly payments, and rising rates means that monthly payments for a given house must go up. When that happens, home prices must go down.

Lower home values are nothing new. It happened the last time around in 2008 when millions of people found themselves “upside down” in their homes because they were suddenly worth less than they paid for them. It was a nightmare and you can avoid that scenario by not jumping in too quickly when the economy is so uncertain.

Second, waiving home inspections just because the seller demands it can really bite you in the long run. The Journal gave several examples. In one case, “the seller had two conditions: waive the inspection and promise to go through with the deal even if the property was appraised below the purchase price.” The buyers agreed. On the sweltering summer day they moved in, the air conditioning system went completely out and they had to immediately spend $7000.00 to replace it.

In another case, the sellers gave a couple only 15 minutes to walk through a home before deciding to make an offer. They had an inspection—only to find out after moving in that the inspector missed the fact that most of the windows in the home did not go up and down. They were shocked to receive quotes of roughly $50,000.00 to repair them.

We are living in emotional times and home buyers who let emotions do their bidding often find themselves holding the bag down the road. Right now is a good time to slow down and watch to see how interest rates are affecting the price of homes. Up to now, it has definitely been a “seller’s market.” But don’t let aggressive sellers or your own emotions rush you into bad decisions about inspections or finances. Things could be changing soon in favor of the buyer.

Learn more at LDSAgents.com!

New Stricter FHA Standards To Reduce Amount of First-Time Home Buyers

The FHA, Federal Housing Administration, has begun to put in place stricter standards for letting first-time and low to middle income home buyers.

As pointed out by this usatoday.com article, currently the vast majority of FHA loans are being processed through an automated system with the minority being manually reviewed by lenders. In 2016, the FHA removed their policy that caused applicants with a credit score under 620 and a debt-to-income ratio of 43%.  This caused the average credit score of applicants to be much lower by 2019 after those changes.

As a result, new standards will be enacted that will cause FHA loan applicants to undergo a much more intense process of loan application. This is speculated to reduce the amount of these risky loans by 50,000 cases.

To find a real estate agent who understands these issues, and who is a fit for your family, go to LDSAgents.com!

Why “For Sale By Owner” Can Make Things Harder

You may hear of reasons that some people like to sell (or buy) their home without an agent. However, this can often cause many problems you may not anticipate when starting the process. Below are only five of the reasons from Keeping Current Matters for why avoiding FSBO (For Sale By Owner) is going to save you a lot of headaches when selling (or buying) a home:

1. Too Many People to Negotiate With

Here is a only a partial list of some of the people you will need to be prepared to negotiate with in the event of FSBO: Read more

A Caution on Home Prices and Debt

A Caution to home buyers from CNNMoney:

Rising housing costs are putting a major squeeze on Americans.

Nearly 39 million households can’t afford their housing, according to the annual State of the Nation’s Housing Report from Harvard’s Joint Center for Housing Studies.

Experts generally advise budgeting about 30% of monthly income for rent or mortgage costs. But millions of Americans are far exceeding that guideline.

One-third of households in 2015 were ‘cost burdened,’ meaning they spend 30% or more of their incomes to cover housing costs. Of that group, nearly 19 million are paying more than 50% of their income to cover their housing needs.

When so much of your paycheck is going toward keeping a roof over your head, it forces sacrifices in other budget areas, including food, health care and transportation.

LDSAgents.com note—What this article does not say is that many people finance homes using income generated by both partners working. Not only does this put stress on a family, but if one wage earner suddenly cannot work for some reason, finances can get stretched very quickly. We advise our readers to consider the advice of LDS leaders and be watchful about taking on too much debt.

The Growing Need For the Bank of Mom & Dad

M&DThe Bank of Mom and Dad is increasingly open for business – and is increasingly necessary – for younger homebuyers looking to secure a down payment, particularly for middle-income households, presumed first-time homebuyers, Hispanics and Asians.

Not only do parents need to consider the cost of a mission and college these days but there is the potential cost of helping their children get into a home. The use of loans and gifts from family and friends to help purchase a home increased sharply during the recession – from 8 percent of homes bought in 2007 to 21 percent of homes bought in 2009. The share has since declined, to 13 percent in 2014. Hispanics and Asians are more likely to receive down payment assistance from family and friends than blacks and whites. Presumed first-time homebuyers who bought in the years after the recession were roughly twice as likely to have received down payment assistance from friends and family as those who bought prior to the recession. Read more

Floods and Earthquakes; Are You Covered?


Natural disasters happen. Make sure you are prepared.

Having the right insurance policies in place can soften the blows from unexpected events that would otherwise mean financial catastrophe for you and your family. But if you’re like many people, you may not fully understand all the policies you have, let alone whether they’re adequate to meet your needs.

Here are some tips to help you assess your current coverage and decide whether you need to make any changes. Read more

Student Debt Can Torpedo Your Chances for a Home Loan

Student debt can adversely affect getting your first loan.

At LDSAgents.com we frequently encounter young clients who cannot qualify for a home loan due to high student debt.

“As students graduate with more debt than ever, those with student loans are getting worse credit scores and taking out fewer mortgages. At the same time home ownership rates among younger Americans sink to historic lows. College students who took out loans will graduate this year with an average of $33,000 in student debt, Read more