Although home prices and interest rates remain low, fewer first-time buyers will be able to achieve homeownership as new rules, regulations, and policies increase costs for them. First-time buyers now account for 29 percent of home sales, down from 40 percent in the not-too-distant past. They must brace for a 0.50 percent boost in fees on most new mortgages in March and a hike to 1.15 percent in insurance fees on government-insured loans with 3.5 percent down payments beginning in April. Experts say putting more down will save borrowers money, but most will need alternative sources of cash because they will be unable to save enough for larger down payments. They can obtain state grants, use cash gifts from family, or purchase their home with a co-owner. Given that home prices likely will not rise much over the next decade, experts say buyers will have to stay put longer to profit or break even. A higher down payment will minimize the risk of being underwater on their mortgages, and finding a home in need of few improvements also will make it easier for them to build equity. Buyers face more competition these days from investors, international buyers, and downsizing retirees paying cash, so they should not expect major discounts and should make offers with few contingencies. | Read More