From our Free-Lance Correspondent

Once you have become more familiar with the community you have moved into, you can begin to consider whether it makes sense for you to look into buying a home. From the standpoint of investment, owning your own home has always been preferable to paying rent. You build equity and have something of value on which to make a profit or for your children to sell for a profit later.

Real estate has become less reliable, however, so you should consider all sides before you buy. Look at the real estate market closely, especially if you do not plan to stay in the states for a very long time.

Rarely does it make sense to buy a home if you plan to sell it again in just 4 or 5 years. You will not have built much in equity on a thirty-year mortgage. You will probably have spent a lot on repairs or replacing appliances, the market will not have changed much and, especially if you bought wisely when it was a buyer's market, you could find you have to sell your home for less than you have put into it. It is also not uncommon for homes to remain on the market for a year or more, with the price constantly being driven down. If you have plans to remain in the states, however, buying your own home could be a wise move from the standpoint of investment as well as tax advantages.

Things to consider in buying a home are quite similar to those you looked at when you were renting. Now, however, the burden of upkeep and improvement is yours alone as well as the property taxes and home-owner's insurance. Don't buy more home than you can afford. If your mortgage payments are very high, you will not have what you need in order to make repairs when they are required. If your home takes all of your income, you will begin to resent it rather than enjoy it. It is often recommended that your mortgage not exceed 1/3 of your gross monthly income. This varies, however, with what your other obligations might be and with how much you make. If you earn $200,000 per year, you may be willing and able to afford to put half of that toward a home. If, however, you earn $20,000 per year, you may find you have trouble meeting all of your expenses if your mortgage takes one third of your gross annual income.

While home inspections may uncover the need for a new roof or well or septic system or an infestation of termites, this is not always the case. It may be that some major expenses do not show themselves until after you have moved it and experienced the poor water pressure, or water in the basement. When you buy a car, you get to take it on a test-drive. When you buy a home, you walk through and spend half an hour or so...you don't take a shower, prepare a meal or see how it fairs in the winter as well as the summer. One of the most expensive investments you will ever make is largely based on aesthetic considerations and emotional reactions. Try to be as objective as possible.

One bit of advice which has always been sound is not to look for the largest, most impressive home in the neighborhood. If the neighborhood becomes less popular/desirable to the market, or if the other homes are not kept up and begin to deteriorate this will drive down the value of your home. If, however, you buy a home nearer the bottom of the scale of those in the neighborhood, your improvements added to the desirability of those around you should help to increase the value of your home.

You can begin to look for a loan as soon as you know that you want to buy a home. Loans can be obtained from banks, federal credit unions, savings and loan associations and companies which deal strictly in mortgages. You can be pre-approved for a loan and then go shopping for your home. You may also find the home and then go shopping for your mortgage. You will need to decide whether you prefer a fixed-rate mortgage or an adjustable rate (one which varies according to the market). You will probably be asked for pay stubs, bank statements, tax returns and copies of your W-2 forms.

At settlement, you will be required to pay your down payment -- usually between 4 and 7 percent (depending upon your location), as well as closing costs and points. This can amount to quite a lot. Go in knowing what you will have to pay. Your real estate agent or lender should be able to calculate this for you.

Read about Home-Owner's Insurance