IF YOU QUALIFY FOR THE NEW MEXICO SPECIAL BOND ISSUE MORTGAGE LOAN, YOU CAN GET A MORTGAGE LOAN WITH AS LITTLE AS 1% DOWN, (THAT'S PROBABLY LESS THAN THE COST OF GETTING IN TO APARTMENT!).

YOU CAN USE "GIFT" MONEY FROM FAMILY TO BUY A HOME USING AN FHA LOAN WITH NOTHING DOWN FROM YOUR OWN FUNDS.

IF YOU AR A VETERAN OF ACTIVE MILITARY DUTY OR RESERVE DUTY YOU MAY QUALIFY FOR A NOTHING DOWN HOME LOAN.

A SINGLE PERSON CAN POOL THEIR RESOURCES WITH A FRIEND TO BUY A HOME TOGETHER.

SHOULD YOU RENT OR BUY BY LAUREL LUND

TO SEE THE LOSS MONEY FROM RENTING

To buy or not to buy, that is the question -- particularly when it come to housing in Albuquerque. The answer? Master the mortgage game so you can look at the question intelligently. It's less expensive to own a home in Albuquerque than it is to rent, according to the newly released 1995 Study of Housing Costs by the E&Y Kenneth Leventhal Real Estate Group. There's been a lot of publicity lately about how unaffordable housing is becoming here. And the study does rank the city as the 55th most-affordable housing market in the U.S. Nothing to rave about. But in the rent vs. buy equation, this means that it takes 26.8 percent of an after-tax paycheck to make a mortgage payment on a four-bedroom home in Albuquerque. That compares with 29.4 percent for rent on a two-bedroom luxury apart- ment. "Owning a home here is a better investment than renting," says Laurie Kissam, incoming president of the Albuquerque Board of Realtors and principal in Kissam Realty. "Rents are high in this market. When you purchase a property, your monthly payments are likely to be smaller [than rental payments]. Add to that the fact that mortgage interest and property tax are tax deductible, you continue to build equity in your property over the years and the value of your property is bound to appreciate, thanks to the favorable outlook for economic and population growth in Albuquerque over the next decade." The Duke City's economy is indeed, boom- ing. "Albuquerque is a hot market," says Steve Sheldon, mortgage loan officer for First Security Bank of New Mexico. "Realtors and appraisers estimate that prices here have appreciated at a rate of 15 percent a year for the last three years, and we see it continuing. Today, you can't even invest money in the stock market and earn a 15 percent return!" WEIGHING THE COSTS A reasonable rule of thumb, according to most mortgage bankers is that a home should cost no more than 28 to 33 percent of your gross monthly income. In order to qualify for a bank's program for first-time home buyers-- those who haven't owned a home in three years, if ever--a family of two needs to earn a minimum income of $38,300 and a family of three or more needs to make $44,045, adds Sheldon. To qualify for a $113,000 loan (the average for a three-bedroom new-build-with- garage in Albuquerque), a potential home buyer should earn a minimum of $38,900 per year. As part of today's standard loan package, you need to ante up a down payment equaling 5 percent of the home's purchase price and be able to handle monthly mortgage payments for a 7.11 percent, fixed-rate, 30-year loan. Assuming your income and credit rating pre- qualify you for this loan on the average $113,000 home, your monthly principal and interest (PI) payments would be $722. But there's more to monthly payments than the PI. You need to add in the cost of homeowner's insurance, mortgage insurance and property taxes. The average homeowner's insurance in Albuquer-que costs $35 per month for protection from such disasters as fire, hail and theft. Mortgage insurance, required until a homeowner reaches a 20 percent equity position--which may be in as little as three years with today's impressive appreciation rate--costs $70 per month. And property taxes, based on a local property valuation of .0085 percent times the assessed value, adds another $80 per month to your home owning cost. Decorating and natural disasters aside, the total fixed monthly cost of owning the average three-bedroom home in Albuquerque at the current loan rate is $907. "Compare this with the $800 to $1,000 monthly rent you'd pay for the same three-bedroom home or two-bedroom luxury condo," says Kissam. "Even with average rent of $650-$700 for a two-bedroom new-build, you still don't have the benefits of tax-deductible mortgage interest and property taxes plus appreciation--all of which contribute to the value of the house." REASONABLE RATES Though current media hype paints a grim picture of today's live-at-home Generation X- ers who can't afford to purchase places of their own, the reality is a house of a different color. "It's a myth that kids can't buy a home in today's market," says Sheldon. "Nearly anyone can get into a house if they find one in the right price range." Steep down payments, once 20 percent of the purchase price, are no longer an obstacle to home ownership, thanks to a variety of new loan products designed to help low-income buyers. Today, down payments of 5 percent of the purchase price and below are commonplace. Laurel Lund writes frequently about real estate. SOURCE: CROSSWINDS, NOVEMBER 1995

Note: we believe the spirit of this article is on target, the money numbers a considerably better than the artical quotes. Contact you money person. .....nmhomes

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