Everyday I meet with people getting ready to jump into the housing market and the first thing I tell them is they need to know their credit score.  This way we have a sense of how a lender is going to view them.  Just last weekend, I had a woman tell me she was afraid to look at her credit report for fear of what is on it.

Fear?!!! Who would have thought a number could cause fear?  But that is what happens all too often.  It’s like you think you have a tumor but don’t go to the doctor to get a diagnosis because you’re afraid he’s going to tell you that you’re dying.  Worst part is that sometimes it’s just a boil he can lance off.  The situation is not helped because the credit reporting bureaus have held onto the secret of what affect credit scores like they were state secrets.  Oliver Stone should write a movie about it.

Well, FICO (Fair Isaacs Corporation) has recently released the secret and it’s like the Shroud of Turin was found all over again.  If you want to know how maxing out your credit cards for the holidays affect your numbers then go to the article posted below.  Want to know what that low credit score does to a mortgage payment get at it. 

The best part of this release is that you can now make informed decisions on how to repair past mistakes.  So lance that boil and get to work.  Homeownership may not be as far away as you think.

http://finance.yahoo.com/banking-budgeting/article/108239/fICO-reveals-how-common-credit-mistakes-affect-scores?mod=bb-creditreports

Elaborating on my response to an article in The New Yorker on the downside of home ownership, here’s an interesting letter the magazine published in this week’s issue:

James Surowiecki’s interesting piece on home buying reveals another reason to consider economics as “the dismal science” (The Financial Page, March 10th). He notes that home ownership reduces mobility in the workforce, as, saddled with a house, neighbors, friends, family, schools, and other burdens of ownership, the homeowner hesitates to pick up and move at the first sign of a pink slip. Economists seem to view the ideal worker as an interchangeable part that can be moved and replaced at the whim of so-called market forces. Never mind that such a worker would be a perpetual migrant, never to know the pleasures of roots, community, and belonging. In past decades, it was customary to lambaste Communism as an ideology blinded by economic determinism with no room for “spiritual” factors. Can we not make the same critique of the free-market fundamentalists whose voices dominate today’s debate?

Pastor John S. Kerr
King of Prussia, Pa.

I completely agree with Pastor Kerr: there’s more to homeownership than just economics.

The New Yorkers‘ financial writer, James Surowiecki, in “Home Economics” calls into question our nation’s obsession with homeownership. Though homeownership makes sense for most people in the DC Metro area, it does not make sense for everyone.

Surowiecki brings up several interesting points in his article, including a statement that our elongated economic slowdown would be shorter if we weren’t a nation of homeowners, but rather renters that could pick up and move more quickly and adjust to changing environments. He suggests our houses keep us chained to our communities and slow down the natural market correction process.

Indeed, you should evaluate the risks of owning a home – just as you would evaluate the risks of any investment that cost hundreds of thousands of dollars. Along with those risks, add to your spreadsheet the list of benefits. Sure you’ve heard of the standard list everyone tells you about including tax deductions, return on investment dollars over time, and equity built up by paying down the loan, but isn’t there a lot of value in some of the intangibles?

What about the pride you feel when you sign on that dotted line and know you’ve accomplished something most people in the world cannot do? Do you know how much Argentines would give to be able to buy property through bank resources at 6 percent intest? Some of them gave their lives in the economic crisis in that country in the late 1990s and early 2000s just to have that right. Can you image a line outside of Kenyon Square condos in Columbia Heights full of people ready to die to have the right to buy?

What about the memories you build for you and your family as a homeowner? I remember at age 12 my parents sold their home in Wyoming and we moved to Iowa while my Dad attended Iowa State University. We were renting that home and I remember, quite vividly, a difference in attitude toward the home and the neighborhood. We were just visitors.

Don’t rush into your decision to buy a home. Make sure it is the right decision for you. As Realtors we can have that dialog with you and help you come to the right decision – for you.

Have you been renting for many years and have the financial resources to buy – but haven’t? We’d love for you to share your perspective here.

Is now a good time?

If you’ve been thinking about buying this spring, attend our free seminar to learn the basics about the process and have your questions answered by experts in the field. With everything you’ve been reading in the paper, it is difficult to make sense of the chatter - we’ll help you figure out what the news about the mortgage market means for you.

Achieving Homeownership - Getting Started
The “How To” Home Buying Workshop
Thursday, March 27th at 7:00 PM
Brandon Green Companies office
2410 17th Street NW Suite 200
Washington, DC 20009

Space is limited, to reserve a seat please contact us.

January 24, 7 p.m.—Using real estate as an investment vehicle
March 27, 7 p.m.—Achieving homeownership
May 7, 7 p.m.—Wills, estate planning, and trusts with special guest Lawrence S. Jacobs Esq. of Jacobs and Associate