ARE THERE RULES ALL PROSPECTIVE BUYERS NEED TO LIVE BY TO WIN AT THE REAL ESTATE GAME?
Yes. First, a 20-percent down payment is a must. And you have to have it in your hands: Never borrow that down payment. Next, make sure you go with a fixed-rate mortgage, never a variable-rate one. Also, be aware of what you can afford in terms of mortgage payments; and a good rule of thumb is that an affordable payment is 30 percent of your gross income, or less. Finally, you have to have an emergency fund, in cash, on hand, after you buy. It should equal six months’ worth of living expenses. Those are the rules we lived by in the ’90s. Then, irresponsible buyers and lenders began to ignore those rules, and the housing mess was created. FORECLOSURES CONTINUE TO RISE, WITH MORE THAN 74,000 HOMES REPOSSESSED BY MORTGAGE LENDERS IN FEBRUARY ALONE. ARE FORECLOSURE AUCTIONS A GOOD WAY TO GO, IF YOU’RE BUYING REAL ESTATE? Not necessarily. For one thing, the lien holder generally wins back the homes that are put up for auction. They will nearly always be able to outbid you, and they want the
