Becoming a Happy HomeownerBy Debbie Wilson
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Now that the real estate bubble has popped, the time might be ripe to leap from renter to homeowner. New home loan interest rates are still at near-historic lows, the housing market inventory is up, and according to Census.gov, mortgage prices may drop by more than 10 percent in the upcoming year. But before you leap, get the homeowner facts you'll need to place the perfect bid.
Check Out the NeighborhoodWhen searching for your new home, look in geographic areas that offer strong economics and a good quality of life. Specifically, you might consider your commute time to work, local schools, parks, and other amenities. Homes in these areas tend to retain their value over time. Additionally, as a potential new homeowner, you'll want to check out statistics on crime, climate, and employment.
Is the Price Right?You may be willing and able to pay the price of your new home loan to ensure you get the home of your dreams. But don't pay more than you have to. Your mortgage broker can provide you with a list of comparable homes nearby that have sold within the year. There are also various websites that track new sales in the same area.
Keep Within Your Homeowner BudgetWhen choosing your new home, select one that is within the generally recommended price limit of approximately two and a half times your current salary. Of course, there are other considerations as well--how much you will have in savings after buying your home, how much your housing expense will increase or decrease, how stable your income is, and how much you expect your income to rise or fall in the future. Normally, if the payments on your mortgage and other debts exceed 40 percent of your gross income, think twice. As a new homeowner, you want your home to be a sound investment and you don't want to break the bank getting there.
So go ahead and make that switch from renter to buyer. With the right facts and the perfect bid, you too can be a happy homeowner.
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.
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