a.m. _a vJ .711"777.77 A 11. • 7,60, AL HARRISON LUGGAGE OUTLET FIND IT • MM. L FINANCE Luggage — Business Cases — Small Leather Goods — Handbags IN THE EVERYTHING EVERYDAY 20-50% OFF 3116 W. 12 Mile • Between Greenfield & Coolidge • 545 7393 House vs. Condo, Both Advantageous - DEDE WEINBERG How does someone know when it's time to buy instead of rent? After the last out- rageous rent hike! There may be other reasons, too, but this is usually the catalyst. When rent becomes as high as a house payment one begins to think about alternative hous- ing. Home ownership today, however, does not just mean a house; it could also be a condominium. And, if it's a condominium it can be a townhouse, a one-floor apartment-style, or a free- standing unit. Usually one's pocketbook dictates which one of these is the right choice. In reality, there are no real advantages in owning a home versus owning a con- dominium. It is just a matter of life style. As a form of home ownership, con- dominiums are here to stay and no longer are the finan- cial unknown they were sev- eral years ago. For many of the women now in the work force with executive-type em- ployment, it is a very easy decision — condo instead of a home. Condominiums offer the same tax benefits as home ownership with much less re- sponsibility. Most association dues include water, landscape upkeep, garbage pick-up, snow removal, the master in- surance plan covering the shell of the dwelling and sometimes heat. Some people argue over the cost of the association dues, but if one was to add up these expenses on a private home, depending on the area, they would be nearly the same. How does someone ascer- tain what and where they should buy? When starting out, it is very important to know realistically what the bank would approve for a mortgage amount on a pro- spective buyer. One should make an appointment with a banker and discuss finances in terms of salary, debts, length of time at one's pre- sent job, future earning potential, etc. Many professionals tend to think that they are auto- matically entitled to be ap- proved for a mortgage. It's true only to the extent that one can qualify. This also means that one has to plan for closing costs in addition to a down payment. DeDe Weinberg is an associate broker with Chamberlain Realtors. The mortgage business has changed drastically within the last several years. There are many different mortgage plans from which to choose. It is advisable to speak with an accountant about which kind of mortgage would be best suited for the buyer. Everyone now pays "points" — each point being 1 percent of the loan balance to obtain a mortgage and if one has less than 20 percent of the sales price to put down on his/her investment, under federal law they will pay a somewhat higher percentage because of private mortgage insurance which is used to insure the loan. It is important to keep sev- eral things in mind when de- terminining whether or not one can afford to purchase a home or condo. First, if one's family has offered to help with the down payment, a gift letter must be presented to the lending_ institution. The lender will then, more than likely, ask where the money is presently deposited and run a check on it. There- fore, it is important to advise a family member of this and let them know it is normal operating procedure. Most banks use the for- mula 28/36 to determine how much of a mortgage a person can get. The 28 stands for 28 percent of one's gross monthly earnings, and it would cover the payment plus taxes and insurance. The 36 stands for a debt ratio of not more than 36 percent of one's gross monthly earnings. This would include such things as car payments, minimum bal- ances on credit cards, child support, bank loans, etc. However, there is one prob- lem with this formula. Since the bank only cares that the buyer not default, they db not consider what else someone does with their monthly in- come. Most people are pleasantly surprised at what the bank would approve them for, however, the bank does not take into consideration the other facets of a person's life. One must conside the quality of one's life. Therefore, it is important to consider one's overall lifestyle in deciding on a comfortable house pay- ment. To many, a very important reason for home ownership is quality of life. 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Thru Sat. 8 p.m.-2 a.m. Corner Franklin Rd. & Northwestern Hwy. 357-4458 Continued on Page 82 99