OCR Text |
Show DOLLARS & SENSE good Investment First, li hotue's value is largely determined by the - location and character of its neigh- . borhood. -'. -' To find the right location for a - -home, look for neighborhoods t. where the houses and lawns are well . : maintained. A more scientific mea- sure of the desirability of a location is how quickly houses are selling. If the average time on the market is 90 , , days or less, chances are the area is a good one. . You also could research the difference between the asking prices and the selling prices of homes in the area If the difference is small (under five percent), you probably are . looking at a ' desirable area. Usually you can obtain this Informa- . tion from the local Board of Realtors. Real-tors. r . It's also wise to look for a neighborhood that has an excellent school system. Because of its appeal to parents with school-age children-, ; the resale value of die home is likely to be higher in an area with a good SChOOl. ;:-": - - -Once you settle on a neighbor- . -hood, find out about future plans for the area. You can obtain this information infor-mation from local newspapers. Also, . talk to the township clerk, township attorney, or building inspector and ask them about the town's master plan. - Ask about plans for surrounding -land use. Pity the homeowner who buys a house bordering undeveloped land only to find out that a large . condominium development Is on the drawing board. ': O 1889 br!Oi Feature Sjmd Choozo Wisely When Buying Home by Bryon Ekoa The first step when shopping for a home is to calculate how much you can afford to spend. In most cases, your yearly mortgage payments, property taxes, and homeowner's insurance premium should equal no - more than 28 percent of your annual gross income. - tt you have long-term installment debt, such as credit cards or student or car loans, add these expenses to your annual house payments. The combined total should not exceed 36 percent of your gross Income. - How much you can. afford to. spend also depends on prevailing mortgage interest rates. Even a . single percentage point can make a significant difference. For example, the monthly payment on a 30-year, ' fixed mortgage of $100,000 at 9.5 percent is $841. The same loan at 10.5 percent results in a monthly payment of $915. : : v il.LiLZ If you doubt your ability to meet large monthly payments, try to increase your down payment Don't underestimate the difference that a larger down payment can make. A $100,000 30-year, fixed loan at 10.5 percent results in monthly payments of $915. On an $80,000 loan, the payments drop to $732 a month. . - . Keep in mind, too, that your costs may be higher during the first year of owning a home. In addition to the expenses of moving, you also will have to pay points to the bank issuing your mortgage. Each point equals one percent., of. the entire loan, so three points on a $100,000 loan is $3,000. . - However,: these expenses are partially offset by several tax deductions. deduc-tions. For instance, the points on first mortgages are generally tax-deductible tax-deductible in the year In which they . are paid, provided that you pay them with your own funds. , . . Once you have a realistic idea of how much you can afford, start scanning the classified advertisements. advertise-ments. By reviewing the real estate ads, you can get a sense of the market price for homes in various . areas. . Ptitfn ?r. . ., How do you know if a home is a |