(CBS)One impact of the continuing housing slump is that people find themselves owning homes they can’t really afford. But how do you know before you buy? Anthony Mason has tips for first-time home buyers.

Newlyweds Sean and Susan McDonald are shopping for their first house.

“We’re not looking for a mansion or anything like that,” says Sean. “We’re just looking for something nice.”

But they didn’t know it would be such a battle.

“It’s just been more difficult, quite frankly, than I had anticipated,” he said,

Sean, who works for a credit union, and Susan, an accounts receivables coordinator, were surprised at how much a bank was willing to lend them.

“Then Sean did some number-crunching and realized we can’t afford a monthly payment like that,” says Susan.

So the McDonalds have cut the target price they’re willing to pay by 25 percent.

“I don’t want to put us in a position where we buy a house and then can’t afford to start a family,” says Sean.

In the housing boom, when credit was easy, that happened to many buyers who borrowed more than they could really afford. Now, rising delinquency rates are showing that home ownership isn’t for everyone.

“Hundreds of thousands, if not millions of homeowners did get in over their heads. And they’re going to have a great deal of difficulty staying above water,” according to Moody’s.com economist Mark Zandi.

Even though we’re now in a housing slump, the median price of a house has soared 85 percent over the past decade to $221,000, while the percentage of first-time home buyers who put “no money down” to buy their homes jumped from 28 to 45 percent in just the past three years.

So how do you know whether you can afford to make the leap to owning a home? First, remember, says Zandi, that “owning a home entails lots of costs. It’s not just the mortgage.”

Calculate the cost of your monthly mortgage payment, but don’t forget insurance and taxes. Then apply the 33 percent rule.

“About one-third of your income devoted to all your housing costs is a very good rule of thumb,” Zandi says.

Make sure you have enough cash to cover your down payment and closing costs, and that you understand what kind of loan you are getting. “Adjustable rate” mortgages often start with lower monthly payments. But they can rise abruptly if interest rates do, and you’ll need to be able to afford those higher payments.

Finally, don’t let housing costs wipe out that emergency three months’ worth of living expenses you should have in your savings.

“It’s actually nerve-wracking,” says Sean. “It’s exciting, nerve-wracking, scary, terrifying. It’s all those things wrapped into a ball of the American dream turning into the American nightmare.”

The good news is that Zandi predicts prices will continue to fall until housing becomes more affordable for first-time buyers like the McDonalds.Home foreclosures are hitting records in many cities. Thursday, in part two of his series, Anthony Mason will have advice on what homeowners at risk of losing their homes can do.

(06-26) 13:28 PDT Richmond, Va. (AP) —

Altria Group Inc., parent of the Philip Morris cigarette companies, will cut in half its U.S. manufacturing base, closing a North Carolina plant that employs 2,500 as it moves cigarette production for non-U.S. markets to Europe.

The manufacturing shift announced Tuesday comes amid a declining U.S. cigarette market and Wall Street speculation that Altria would soon move to split its domestic and international tobacco businesses into two companies.

Philip Morris USA will transfer all production from its Concord, N.C., plant in Cabarrus County to its Richmond production center, which will become its sole American manufacturing plant by 2011.

The Richmond plant also will switch from making cigarettes destined for both U.S. and international markets to a strictly domestic market.

In 2006, the two plants produced 80 billion cigarettes for overseas distribution. Those cigarettes will now be produced in European plants, though Philip Morris International has not specified which ones, explained David Sylvia, a spokesman for Philip Morris USA.

“We will continue to produce the cigarettes in both the Cabarrus and Richmond facilities for Philip Morris International through the fall of 2008,” he said. “The Cabarrus facility will also continue to produce cigarettes for us in the U.S. through 2010.”

The shift comes as the U.S. market for cigarettes loses its luster, with an increasing number of states restricting smoking in public places.

“Over the last decade or so, cigarette consumption has declined by approximately 2 percent per year,” Sylvia said. “It’s attributable to a host of factors Д and we expect that decline to continue.”

Last year, Philip Morris USA shipped 183.4 billion cigarettes, while Philip Morris International shipped 831.4 billion cigarettes in 2006.

Altria’s announcement makes its U.S. and international cigarette units more independent. Some analysts have predicted Altria would split the businesses into two companies and expect an announcement as early as August.

An Altria spokeswoman would not comment Tuesday on that possibility.

Such a split would be part of a restructuring designed to increase value for Altria shareholders that started with the parent company’s spinoff in March of its remaining majority stake in Kraft Foods Inc.

Altria said in a statement that it planned to increase production at plants in Europe by the third quarter of next year.

Philip Morris International will cut costs by taking advantage of excess capacity at European plants, where manufacturing costs are lower than in the U.S., PMI spokesman Greg Prager said. With the Cabarrus plant closure, PMI will shift the production of 57 billion cigarettes per year to Europe, meaning all PMI production will be done at plants outside the U.S., Prager said.

He declined to name the plants that would increase production. PMI’s plants in Europe are in Lithuania, Poland, Romania, the Czech Republic, Germany, Greece, Holland, Portugal and Switzerland.

Altria shares rose 88 cents, or 1.3 percent, to $69.63 Tuesday.

Most North Carolina hourly employees and many salaried employees will be offered positions in Richmond, Altria said. Sylvia said the move will bring “several hundred” jobs to Richmond. Philip Morris USA employs 6,300 in Virginia, primarily at its Richmond cigarette plant.

Other workers at the North Carolina plant will be eligible for between three and 20 months of severance pay and benefits, depending on length of service, plus outplacement counseling.

The company said it expects cost savings of about $335 million by 2011, of which $179 million will be realized by Philip Morris International and $156 million by Philip Morris USA.

Altria expects Philip Morris USA to record an initial pretax charge of about $325 million, or 10 cents per share, in the second quarter, mainly for employee separation. There will be about $50 million in charges for the remainder of 2007.

Total expenses through 2011 will be about $670 million at Philip Morris USA, including accelerated depreciation charges of $143 million, employee separation expenses of $353 million and relocation costs, partly offset by gains on sales of land and buildings, of $174 million.

Schools have been offered guidance on how to implement biometric technology.

The advice from the British Educational Communications and Technology Agency (Becta) is aimed at those involved in introducing biometric tech into schools - such as head teachers and governing bodies — to guide them on how to successfully implement these systems without compromising personal information.

Biometric tech can take the form of fingerprint, retina, iris pattern, voice and even face shape recognition.

Fingerprint recognition is already used in a number of schools for a range of uses such as cashless catering where meals are paid for in advance and charged for using biometric tech at the till.

The benefits of this include speeding up the service in canteens and removing the need for children to carry money, minimising the risk of bullying or theft.

As children don’t need to remember money or a smartcard, costs for replacing cards could also be reduced.

Automated attendance is another good use of biometrics for schools identified by Becta. It could allow pupils to register at the school gate, saving staff time and also preventing unauthorised access into school grounds.

This use of biometrics would also stop pupils registering for friends who are playing truant.

Becta points out that although use of biometrics is covered in the 2002 Education Act - which allows for tech to improve the provision of facilities or services - there are legal issues to bear in mind.

The Data Protection Act 1998 means schools have to treat pupil information with care and make sure parents and pupils are aware of how personal information is used.

To comply schools must not hold excessive information and ensure what biometric information they do have is secure, accurate and kept no longer than necessary.

Pupil and parent consent is another issue which schools need to address with the usual involvement of pupils and parents encouraged when making decisions about biometric schemes.

Becta advises schools to consider what systems are most appropriate and also the concerns of parents. This could include reassuring parents that data won’t be passed onto third parties and that it will be destroyed when pupils leave the school.

The possibilities of some parents choosing to opt their children out of the biometric system should also be accounted for, Becta advises, with alternative processes available.

The guidance was developed in conjunction with Department for Children, Schools and Families and the Information Commissioner’s Office.