Maybe you're on vacation, enjoying yourself and lolling around. And perhaps you're thinking that come fall you'll be in the market to buy a first house, a move-up house or fix up the place you live now.
If so, here are some points to consider, courtesy of the Department of Housing and Urban Development:
FIRST HOUSE
Why should you consider buying a house? You'll save on income taxes by deducting mortgage interest and property taxes. Each payment you make builds equity in your future. You can decide how to decorate without consulting the landlord and make your own decision on when to move.
How much can you afford? Generally, lenders allow you to spend up to 28 percent of your total, or gross, monthly income on mortgage payments, but federally backed mortgages from the FHA, VA and HUD allow 29 percent and sometimes more.
ALL BUYERS
- When you know what date you'll be moving into your new house, contact the local gas, electric and water department and ask to have service turned on by your move-in date.
- Set appointments with the telephone company and the cable TV company to begin service if you want it.
- After you decide on the house, do a walk-through and make sure the sellers take care of any problems you noticed by the time you make your final walk-through, preferably the day of the closing.
- Make an inventory of your possessions as you unpack. The list will be very valuable if there's a fire or theft in the house sometime later.
FIXING UP THE HOUSE
Big-ticket items that will add the most value to your house:
- Painting, wallpapering, decorating and new carpets.
- New garage, room addition, bathroom remodeling, kitchen remodeling and landscaping.
Inexpensive ways to brighten the house:
- Hang plants from the ceiling and scatter them in empty spots.
- Hit garage sales for low-priced pictures, prints, good condition furniture and household items. Be ready to paint and repair.
- Make curtains from colorful, low-cost fabric and throw pillows to match.
- Create a family photo wall, using cheap frames from the drugstore. Start a gallery of the children's art by framing their pictures and changing them every few weeks.
If you found these points helpful, you might want a free copy of the HUD booklet, titled "A Home of Your Own: Helpful Advice from HUD on Choosing, Buying and Enjoying a Home." Write to: Consumer Information Center, Department 568Z, Pueblo, CO 81009.
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(Chart)
How much can you afford?
This chart shows what 29 percent of income is at various income levels:
Annual gross income Monthly gross 29% of gross
$15,000 $1,250 $363
$20,000 $1,667 $483
$25,000 $2,083 $604
$30,000 $2,500 $725
$35,000 $2,917 $846
$40,000 $3,333 $967
$45,000 $3,750 $1,088
$50,000 $4,167 $1,208
There are four parts to your monthly mortgage payment, known in the industry as PITI:
-Principal: Repayment of the amount you borrowed.
-Interest: Payment to the lender for the money you borrowed.
-Taxes. Property taxes to the county and perhaps the city.
-Insurance. Homeowners insurance to insure the property against loss from fire, smoke, theft and other hazards.