Buy a Home You Can Afford

Walking into your own house for the first time can be a big thrill. There's the kitchen where you and your family will enjoy gourmet meals, the living room where you will entertain friends and relatives, the backyard where you will plant flowers and the den where you must pay the mortgage and all the other bills.

Too many people who envision homeownership leave the den out of the picture altogether.

No one likes to think about losing a job, falling victim to a major illness or getting so overwhelmed with bills that they miss a mortgage payment, or two or three.

The reluctance to plan ahead or save for tomorrow leads to this nasty statistic: 10 percent of homeowners who have a mortgage insured by the Federal Housing Authority were behind in their payments during the first three months this year. That's one out of every 10 households.

Want to make sure you don't end up as one of these sad statistics? Don't spend every last dime you have to buy a house, especially if you have no additional resources to get out of a financial jam.

A recent study by the Research Institute for Housing America questioned whether the nation is on the wrong track in trying to get everyone into a home of their own, including many with low incomes and little understanding of the extended expenses of homeownership.

"There has been little research that carefully measures and compares the relative benefits of ownership across socioeconomic groups," the study authors said. "We should have a more accurate assessment of the potential benefits and risks backed by (low-income) households before we persuade them to become homeowners."

You don't need a study to know your own situation. Just ask yourself these questions:

• I can meet the mortgage payments with my current job. What are the chances I might be laid off?

• If I lost my job, do I have enough savings or other resources to cover the mortgage while I look for work?

• Does this house need a lot of repairs, and if so, do I have enough money to get the work done?

• If I need a car to get to work, will car payments interfere with the mortgage payment?

You get the idea. It's no fun to own a house if you're constantly worrying whether you're going to be able to make the next mortgage payment. Make sure it doesn't happen to you by having a contigency plan in place.

(Distributed by Scripps Howard News Service.)