Harley E. Rouda

If you’re considering purchasing a new home, you’re in luck, because you can still take advantage of record-low interest rates. What does that mean for you? Simply put, you can afford more in a house. Lower rates allow you to purchase a larger home that you otherwise might not be able to afford. So, today’s housing market allows you to purchase additional space to accommodate you and your family – without breaking the bank.

That said, can you afford the home you want? It’s easy to find out. You simply need to examine your income and compare it with what you currently owe. The difference between these two will ultimately determine your loan options.

The National Association of Realtors (NAR) suggests you start by analyzing your gross monthly income. This includes what you bring home in your paycheck each month as well as any other assets, including real estate or stocks. Not sure which of your assets count as income? Consult your Realtor or loan officer for advice.

Your next step is to analyze your current debt situation. How many credit cards do you own, and what are their balances? How much is your monthly car payment? Do you have any personal debts like alimony or child support? Remember to use your minimum monthly payment when making your calculations, and if you plan to pay it off in the next six months, don’t include this figure in your calculations.

Curious as to what lenders look for when determining your loan? First and foremost, they want you to be able to pay it – so they won’t stretch you too thin in reference to your other debts. In addition, the NAR reports that lenders will expect your monthly housing costs to be less than 28 percent of your gross monthly income, and your combined housing costs and other debts to be less than 36 percent of your gross monthly income. Otherwise, your loan may not be approved.

Of course, these figures are estimates, depending on your personal situation. For example, a large cash down payment may help your overall debt situation and allow you to quality for a better loan. Or, if you have a wealthy relative or friend who can cosign on your loan, you’ll have more options.

The NAR reminds buyers that they have a variety of loans to choose from, including adjustable rate loans as well as fixed rate programs. Again, be sure to talk to your Realtor and loan officer to determine which loan program best fits your needs.

Columbus, Ohio existing home sales have slowed, but builder products continue to move quickly.

“Weather and the war meant a slow start to the market last year but the market came on strong with the Central Ohio MLS showing the year ending up with a 7.4 percent increase in the number of sales in 2003,” says Realtor Dan Gregor. “The 1st quarter of the new year continued that end of year trend showing a substantial 12.2 percent increase in activity over the same period in 2003. The average sale prices however did not show any increase. They remained pretty much stable.

Gregor says, “Building activity has continued to be strong, spurred on by lower interest rates and numerous incentives and concessions by production builders. Buyers and sellers today will find both opportunities and difficulty in the marketplace today depending on the location and price range. Sellers who have owned their property for 5 years or more are the ones most likely to be in a position to take advantage of the current market conditions.”

Says Realtor Andrew Show, “The city of Columbus is the state capital. The city has gradually grown into the most populous and exciting metro city in the state of Ohio, while still maintaining its midwestern roots and excellent transportation system.

About the market, Show advises, “Lower-priced homes in the metro Columbus area (under $225,000), if in good condition, are selling quickly, but higher priced home sales are still soft.”

“Sales of existing home prices have slowed,” says Realtor Greg Harrison, “due to the high demand for new homes with lower interest rates, But don’t try to sell that new built home until the builder is out of the subdivison. Existing homes are taking a little longer unless they are priced right. Being out of the market by just 3 percent can add months to the selling time.”

Published: April 22, 2004