Financial planner's thoughts...
When homebuyer's can't agree...
Stay Put or Move Up?
Many baby boomers are still trying to climb the housing ladder but are conflicted about whether to spend more on housing or save for retirement.
Are you torn between moving up and staying put? Then these points could help you decide what to do:
Don’t let tradition rule your life.
In past decades, the prevalent custom of many Americans in midlife was to head for smaller housing. Today, however, to echo a phrase from the midlifers’ youth, "The times, they are-a-changin’!"
Many midlifers "are not willing to turn to a bungalow or a one-bedroom condo," says one agent.
If you’ve done a thorough analysis of your financial situation and are convinced you can afford a heftier house payment, don’t let custom inhibit you.
Use a mortgage lender to help you decide whether to move.
Many people still turn to a mortgage lender only after they’ve found a home and are seeking a loan.
But you should go to your lender to get pre-approved much earlier in the process -- well before you’ve committed to a specific property.
Remember to tell your lender about all your outlays -- not only those about which you are asked. Are you, for instance, participating in a retirement savings program or making annual contributions to your place of worship? Then be sure such information is part of your lender’s analysis.
Use "worst-case scenarios" when considering a home purchase involving an ARM.
In their classic form, the interest rate on such loans can increase as much as 6 percentage points within a three-year period.(up)
All too often, prospective buyers think only about the payment they’ll confront during the first year of the ARM. Instead, they should look at the highest possible payment they could face during the term of the mortgage.
Place your housing hopes within the hierarchy of your value system.
"Staying put is a confusing strategy for a lot of people," observes Dave Beson, a national real estate speaker and consultant.
To many households, a home represents more than simply a material item like a car or a boat. Where you live and how you live influences many elements of your lifestyle -- including household dynamics and commuting time.
Many in the baby boom generation still place a high premium on attaining a trade-up property, Beson says. If you fall in this category, he recommends you honor your housing aspirations. "Buy the biggest piece of the mountaintop you can truly afford," recommends Beson.
Smart Moves by Ellen James Martin. Copyright 1995 Universal Press Syndicate. Reprinted with permission. All rights reserved. This material may not be reproduced in any format without written permission. Norwest Mortgage and design is a registered service mark of Norwest Corporation. Information subject to change without notice. 8J0601 (5A0821)
