Lisa Barton

A year after the financial collapse of 2008, the housing market is very different than it was before the foreclosure crisis. A great article in The New York Times gives new home buyers some guidance from economists and financial planners when contemplating a home purchase:
Here are the highlights:

  * Old-fashioned basics are more important than ever. The safest way to purchase a home is to put down 20 percent on a fixed-rate, 30-year (or less) mortgage.
  * Don’t become overconfident about income growth. Even though buyers in their 20s and 30s will likely see their incomes grow more quickly than previous generations, it is important to act sensibly when borrowing.
  * Anyone contemplating adding children to the family should calculate whether they could live on one income because having both halves of a couple work may turn out to be impractical.
  * Include a maintenance budget. Even new homes need upkeep and repairs.
  * Buyers who can’t afford their dream home now should opt for a starter home where they can save money each month for what they really want.
  * Consider a property that can be expanded and improved down the road when money is available.
  * No two buyers are the same, but they should all feel confident with the loan they enter into, no matter the size of the mortgage.
Source: The New York Times, Ron Lieber (09/12/2009)