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cathrynstreich · 5 years

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8 Signs You’re Ready to Stop Renting and Buy a Home

(TNS)—Renting a place to live may give you the freedom to move when you want and relieve you of the responsibilities of homeownership, but at some point, most people yearn for their own home.

Buying a house is a good way to start building financial security. As you pay down the mortgage, you build up home equity, which is a valuable financial resource.

Mortgage rates are low right now, so if you think you’re ready to buy a home, it’s a good time to make the move.

“For prospective and actual homebuyers, the decline in mortgage rates has provided a much-needed boost to housing affordability,” says Mark Hamrick, senior economic analyst for Bankrate. “This comes after home prices have risen steadily on a national basis since 2012.

“For those who were inclined to buy a home anyway, the drop in the cost of financing translates to a potential reduction in monthly mortgage payments. For those who weren’t initially intending to buy a home, the improvement in affordability might be what helps them to get off the proverbial fence.”

Deciding whether to rent or buy a home is a major decision. How do you know you’re ready? Here are eight signs that you’re ready to make the switch from renter to homeowner.

1. You’re tired of rising rent prices. Rental prices are on the rise nationwide, according to Apartment Guide, which tracks trends in the rental market. The average rent on a one-bedroom unit climbed 4.2 percent in 2018, to $1,140; two-bedroom units rose to $1,354 and studio apartments rose 5 percent to $1,065.

Rising rent makes it harder to budget for monthly housing costs and to save for other financial goals. When paying rent begins to feel like a bad investment and you want to build equity for the future, it’s time to figure out what loan you qualify for, says Bill Golden, a sales associate with RE/MAX Around Atlanta, who has more than 30 years in the real estate business.

Golden says many renters are ready to buy a home once they are financially stable. Many are motivated by the pride of ownership and wanting more control over their dwelling place.

“If one or more of those is tugging at your heart, at least look into the possibility of owning rather than renting,” Golden says. “If you’ve seen your rent escalate significantly but you feel trapped renting, it means the balance may be tipping toward buying. With today’s escalating rental rates and low (mortgage) interest rates, chances are your monthly outlay could be less on a purchase than on a rental.”

2. Your credit score has improved. Some renters are locked out of homeownership because they can’t qualify for a mortgage. A low credit score is a common reason why renters can’t make the leap to purchasing a home. A history of late payments and too much debt will hurt your score. One sign that you’re ready to buy a home is having a healthier credit score, says Bruce McClary, vice president of Communications for the National Foundation for Credit Counseling in Washington, D.C.

Although borrowers with a credit score as low as 500 can qualify for some home loans, they will be required to make bigger down payments and pay higher mortgage rates. A good credit score gets you better interest rates and loan terms.

“Establishing a credit history or recovering from a credit setback can take time, but the goal of homeownership is still realistic under those circumstances,” McClary says. “Receiving help from a nonprofit housing counseling agency that also offers credit counseling programs can make a big difference for anyone struggling with those barriers to homeownership.”

Before you apply for a mortgage, get a free copy of your credit report.

3. You’re good at managing debt. Another thing lenders look at when screening mortgage applicants is their debt-to-income ratio, or DTI. This is a key metric that’s calculated by adding up all monthly debts, then dividing the sum by your gross monthly income. The higher your DTI ratio, the more risk you pose to a lender.

Some conventional loans allow a DTI ratio of up to 50 percent, but many lenders prefer a ratio of no more than 43 percent. If you previously had a high DTI ratio and have since paid off some high balances, you’ll be in a stronger position to get a mortgage.

You’ll also have more wiggle room in your budget to put money into an emergency fund for home repairs and other unexpected expenses.

“Keeping credit card balances low and debt under control is beneficial in many ways,” McClary says. “It’s important to consider that keeping credit card balances at or below 30 percent of the available credit limit has a positive influence on the credit score.”

4. You have enough set aside for the extra costs of owning a home. When a pipe bursts or the air conditioner goes out in a rental unit, you don’t have to worry about paying for it; that’s the landlord’s responsibility. The same goes for property taxes, routine maintenance and homeowners insurance.

That’s not the case when you own a home. All those costs are your responsibility. If your income has risen or you’ve been able to set aside savings, you might realize you have enough extra money to handle the added expenses of homeownership.

“Clearly, if you put everything you have into the down payment and such to buy a house, then you have no money to do repairs should they come up,” Golden says. “You’re better off spending less on the house so you have some money to make improvements and repairs.”

5. You can afford the down payment and closing costs. “First-time homebuyers don’t have proceeds from another home to help fund the down payment. It’s one of the main reasons why the down payment is the biggest hurdle to homeownership,” says Rob Chrane, CEO of Atlanta-based Down Payment Resource, which finds programs that help people buy homes.

The down payment requirement depends on the type of home loan you get. For conventional loans, 20 percent down is usually required if you want to avoid paying private mortgage insurance, or PMI. Some mortgages insured by the Federal Housing Administration, known as FHA loans, require just 3.5 percent down. Fannie Mae and Freddie Mac back some mortgage products that require just 3 percent down; and loans guaranteed by the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture (USDA) require no down payment.

Renters interested in buying a home should compare different loan programs to see which one is best for them. In addition, there are grants and programs to help homebuyers with down payments.

Another expense you have to be ready for is the closing costs, which typically equal 2 percent to 7 percent of the property’s sale price. The good news is that some closing costs are negotiable.

“Because the buyers are putting so much of what they have into the down payment, we usually try to get a seller to pay some, if not all, of the closing costs,” Golden says. “Even if (the buyers) have to pay a little more for the house, it doesn’t hurt their pocket as much.”

6. You’re ready to settle down in one place. Buying a home involves a lot of upfront costs that can take a few years to recoup, so if you anticipate moving before you can recover those costs, homeownership might not be right for you.

No one works at the same company for decades anymore, but a renter who is ready to buy a house should have job security, says Hamrick. A stable job means stable income, which lowers the risk that you will stop making your mortgage payments and default on the loan.

“For two-income households, obviously the risk and opportunity are twice that of situations where there’s just one wage earner,” Hamrick says. “In a perfect world, (buyers) would buy a home well beneath their means so they aren’t devoting so much of their income to the mortgage and other related costs.”

7. You’re going through a major life change. Many renters decide to purchase a home after a major life event, such as getting married, says Henry Yoshida, a certified financial planner and CEO of Rocket Dollar, a Texas-based provider of self-directed retirement accounts.

Marriage, a growing family, a new job and children leaving the nest are catalysts for people to buy a home.

“The four major cities in my home state, Texas, are simultaneously on top 10 lists for raising a family and retiring, so I see this firsthand,” Yoshida says. “My own neighbors on either side are retirees from California and a young family who relocated from the Northeast for a job.”

8. You know what you want. It’s smart to have a good idea of the area or neighborhood you want to live in and the type of home you want before you begin your quest. Houses, townhouses, condos, co-ops, duplexes—there are lots of options out there and each one has its own considerations for costs, upkeep and personal enjoyment.

If you buy a condo, for example, you don’t have to do the yardwork, but in addition to your mortgage, you must be able to afford the homeowners association fees.

Determine what you need and what is most important to you. Is it being near a good school or within walking distance of your job? Do you mind navigating stairs or having neighbors live above you? Do you want lots of amenities?

If you’ve moved to a new city or state to take a job, it might be a good idea to rent until you’ve familiarized yourself with the area. That way, you are more likely to choose a home and neighborhood you feel good about.

Ready to Leave Renting Behind? Here’s What to Do Next Before you start looking at homes for sale, shop around, compare lenders and get pre-approved for a mortgage. Getting pre-approved helps you know how much house you can afford, what loan program is best for your situation, and what price range to focus on so you don’t overextend your budget, says Ben Creamer, principal and managing broker of Downtown Apartment Co. in Chicago.

“This sets a realistic expectation for what the buyer is qualified to purchase, as well as what financial resources will be needed for closing,” Creamer says. “Knowing this upfront allows sufficient time to save and test the budget constraints.”

Choose a fixed-rate loan for 15 or 30 years if you want predictable, stable mortgage payments. However, don’t forget that owning a home involves a lot more than the monthly principal and interest payments for a mortgage. Property taxes and homeowners insurance are additional expenses that can increase your monthly payments over time, as is PMI if your down payment was too low. Then there are repairs, maintenance and utility costs to budget for, too.

As you weigh the decision to buy a home, make sure you can reach your other financial goals, Hamrick says. A new mortgage shouldn’t prevent you from paying down student loans and credit cards or from saving for retirement.

“In order for (buyers) to have a good chance of achieving a range of financial objectives, they should also have emergency savings,” Hamrick says. “That’s because of the inevitable expenses associated with homeownership.”

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titoslondon-blog · 6 years

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New Post has been published on Titos London

#Blog New Post has been published on http://www.titoslondon.co.uk/lvmh-prize-winners-where-are-they-now/

LVMH Prize winners: Where are they now?

The mythology of the fashion prize is part of the industry’s folklore. So it goes that an obscure young designer working away with impecunious inventiveness is discovered by a fabulous fairy godmother and given a fast-track ticket to international acclaim. Off they go, happily ever after. The end.

In reality, it’s less of a fairy tale and more of a cautionary tale. For, as every young designer knows, the challenges of establishing an independent label can make it almost impossible to do, even with financial support, chattering buzz and thousands of Instagram likes. One could argue that the seemingly glittering spotlight can even go as far as to be a deterrent to real sustainable growth and brand building. For every success story, there is a defunct label that once showed a promising start.

The LVMH Prize is the brainchild of Louis Vuitton executive vice president Delphine Arnault. It’s open to designers under the age of 40 who have produced at least two collections. The winner receives €300,000, plus a year of mentorship from LVMH and its network. It also offers a runner-up Special Prize of €150,000 and similar mentorship opportunities. Thanks to the prominence of its sponsor and the eminence of its jury—a pantheon of the conglomerate’s star designers such as Karl Lagerfeld, Nicolas Ghesquière and Marc Jacobs—the Prize has quickly established itself as one of the most prestigious and valuable contests in the world for young fashion designers. This year, more than 1,300 designers representing 90 nationalities applied.

Of its winners, many have gone on to become the most exciting names on fashion-week schedules—Marques Almeida, Wales Bonner, Marine Serre, Jacquemus, to name just a few—and even others who haven’t won have gone far. Virgil Abloh, for instance, was merely a finalist in 2015—three years later, he’s the new artistic director of menswear for Louis Vuitton.

So what makes this prize so special? “You’re being judged by designers,” says Marta Marques, one half Marques Almeida, which won the LVMH Prize in 2015 and has since established itself as a steadily thriving business. “To speak to them about the struggle of creating a brand, and balancing the creative and business sides—you don’t get that with any other prizes, and that helped us with cementing where we were going.” Marques points out that what also set the award apart was the mentorship from Sophie Brocart, senior vice president of LVMH’s fashion ventures and CEO of Nicholas Kirkwood. “To have that huge level of expertise on the other end of a phone call or email was really precious. We could bring expert knowledge to the fields that weren’t our strong point.”

“I wouldn’t have been able to carry on without winning it,” asserts Grace Wales Bonner. The London-based menswear designer won the LVMH Prize in 2016 and is now one of the star attractions at London Fashion Week Men’s. “It gave me security to build the foundations of what I wanted to do and the support to strategise and consider,” she adds, also mentioning that the process gave her a much-needed confidence boost.

Part of the success of the LVMH Prize has been how it has rejuvenated the conglomerate, which had experienced its own scandal (Galliano-gate!) and an increasingly spinning carousel of creative directors. By aligning itself with the patronage of a younger generation—just as Topshop once did by sponsoring the British Fashion Council’s NewGen scheme—the company attracts positive publicity and creates an association with fresh, new talent.

Despite the prestige, however, some critics question just how sustainable the prize is for a generation of designers who are starting businesses at a time when the traditional retail and wholesale model is in flux—especially as most of the jury is more familiar with the conventional fashion system. “Design isn’t what makes a fashion brand today—and they need to reward the most progressive view,” luxury brand strategist Ana Andjelic says of the prize. “The question is: how do you use this prize to make something more sustainable? Of course, you can do a fashion show and do wholesale, but do you really want to start your career by being 50 per cent off at Nordstrom?”

Andjelic has a point. Whereas prizes in other industries recognise innovation and disruption, fashion has a tendency to stick to what it knows—Karl Lagerfeld, for instance, famously boasts that he doesn’t interact with marketing executives in his work for Fendi and Chanel. Today’s designers require an arsenal of skills that range from direct-to-consumer e-commerce and digital marketing to brand content and sustainable production. She continues: “Once you’re in the LVMH Prize, you’re in the fashion system. We are now questioning whether seasonality even makes sense anymore, so we need mentors from different industries, and to take the prize further and make LVMH work harder for these designers.”

Winning the Prize does not automatically guarantee success. Thomas Tait and Hood By Air, both winners in 2014, are no longer producing collections. Although Hood By Air’s Shayne Oliver has made a successful transition into a freelance career by designing one-off collections for Helmut Lang and Diesel, Tait is admonitory of why fashion prizes can be a blessing and a curse.

Before winning the inaugural LVMH Prize, Tait struggled with the battle of putting on a show in September and only being able to pay for materials in August, when most Italian factories are closed, which usually allowed him just a few days to create an entire ready-to-wear collection. “To some people [€300,000] might seem like an enormous amount of money, to some people it could seem like something that could go overnight,” Tait told me in 2015, less than a year after winning the Prize and months before he would quit the catwalk.

“There’s a lot of people who have this false idea that you’ll be fine—just keep it up for a few years and somebody’s gonna hand you a creative director’s position,” he added. “That might not happen. The sensationalism of fashion creates this false sense of comfort where people think that you can really get yourself into a huge financial mess and then some kind of magic trick is gonna clear out all the debt and you’ll become a big star.”

There’s also the question of whether a younger generation of designers covet those creative directorships, which were once seen as the holy grail for lesser-known names. “I think now that everything is so fickle and contracts are so short, it’s not something that is desirable in terms of job stability because everyone is getting hired and then quitting or being fired,” says Vejas Kruszewski, who won the Special Prize in 2016 and has recently put his label on hold to work on Pihakapi, a project with Italian leather manufacturer Pellemoda that allows him to bypass many of the challenges that young designers face. “You go into a situation where all the infrastructure you need is in place, but the downside is that you have to deal with corporate process and all the numbers.”

For many young designers straight out of college, negotiating the relationships with manufacturers, publicists, sales agents and distributors can be hard to manage. It can also lead to overwhelming overheads, which affect pricing and make it difficult to position one’s label in a competitive marketplace. “I’m based in New York and do production in Japan and show in Paris, so my challenge is always a lot to do with budgets and the cash flow,” says Kozaburo Akasaka, who won the Special Prize last year. “I need to keep doing that unless I have more people and there’s also the issue of quality control as you want a certain level of craftsmanship for the product—especially as if you can afford to order more materials, you get a better price.” As a result, pricing can be somewhat skewed. One of Akasaka’s exquisitely handmade coats, for example, retails for $2,000—a price which can prevent younger consumers buying into the brand.

There is, however, a new outlook on the horizon. Marine Serre won the LVMH Prize last year and is the first winner not to hail from Central Saint Martins. The prize enabled her to find a studio that wasn’t her bedroom and to employ a few people to help her and start creating a collection made from upcycled materials that would be shown at Paris Fashion Week. “For me, luxury is not a €7,000 dress,” says Serre, who says that she wanted to start her label with accessible prices and alternative methods of circular production. “I knew I wanted it to be recycled deadstock materials and the other solution is not trying to develop 45 prints and cancel 25. I had nothing cancelled in my last collection and I produced everything.” She’s already developed a full line of accessories—ball-shaped bags, silk-scarf earrings, crescent-moon jersey sock boots—that is being snapped up by several of the international retailers who are already selling her label, which was only officially started eight months ago.

“It wasn’t something I was planning to do,” adds Serre. “I wanted to have a brand but I didn’t think it would happen tomorrow.” The challenge for her now will be turning overnight success into a lifelong career. By the look of things, however, she’s already one step ahead.

1/14 Marine Serre 'Young Fashion Designer', LVMH Prize 2017

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Marine Serre fall/winter 2018-2019

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Marine Serre fall/winter 2018-2019

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Grace Wales Bonner 'Young Fashion Designer', LVMH Prize 2016

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At the LVMH Prize 2016 annoucement

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Grace Wales Bonner, fall 2018

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Kozaburo Akasaka at the Louis Vuitton Foundation in Paris

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Marques'Almeida spring/summer 2017

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Thomas Tait at the 'LVMH Young Fashion Designers Prize' winner announcement in Paris

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Thomas Tait spring/summer 2016

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Louis Vuitton executive vice president Delphine Arnault with Simon Porte of Jacquemus

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Jacquemus fall/winter 2018-2019

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Shayne Oliver with Kendall Jenner

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Hood By Air spring/summer 2017

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