Neighborhood Guide: Cabbagetown / Reynoldstown

Shabby-chic Cabbagetown underwent a slow transformation over the years, morphing from a downtrodden mill town brimming with dilapidated shanties to a lovingly restored artists’ community — one that still retains its ramshackle charm. Neighboring Reynoldstown is right on the heels of Cabbagetown’s restoration; young urbanites are setting up shop in R-town’s bungalows and shotgun homes alongside old-timers who’ve been there for generations.

RESIDENT’S PERSPECTIVE
“Cabbagetown is unbeatable because of its strong sense of neighborhood, fascinating history, unique architecture and great vibe. It’s an authentic, close-knit village within this enormous city.
— Dave Knox, 49, Cabbagetown artist/photographer

UPSIDES
Because of its history as a refuge for young, artsy types, Cabbagetown and Reynoldstown boast a strong sense of community and support for nonprofit organizations like WonderRoot, Trees Atlanta and the recently relocated Eyedrum.

Rentals are pretty reasonable for a neighborhood so close to the city center, too.

DOWNSIDES
Buying a home here can be pricey, and crime can be dicey.

HIDDEN GEM
Lang-Carson Park, sneakily tucked off Wylie Street, has a covered basketball court, a ball field and nifty little picnic area replete with a built-in brick grill.

WILD CARD: A whopping nine points for being quirky, authentic, creative, adorable and distinct — and for being home to the ever-evolving graffiti artist playground that is the Krog Street tunnel.

CRIME
Average total crimes per 1,000 residents: 92.53
Violent crimes per 1,000 residents: 3.8
Property crimes per 1,000 residents: 88.74

HOME PRICES
Median home price: $168,400
Originally built for mill workers, then embraced by artists and musicians, Cabbagetown’s older houses are small and cute, but have few extras.

Average rental is $800.

EDUCATION
Grade: D. As its name suggests, Tech High charter school specializes in engineering, communications and IT classes.

GREENSPACE
Cabbagetown Park, home to the annual Chomp & Stomp chili cook-off (the hipster see-and-be-seen event of the year), sits smack-dab in the middle of the neighborhood and features a playground and, in keeping with the area’s adorability factor, a tree swing. 701 Kirkwood Ave.

DIVERSITY
Cabbagetown is mostly white, but has about 25 percent African-American residents. Reynoldstown is the opposite: mostly black, with about 35 percent white residents.

Overall Rating: 62

FULL ARTICLE: http://posting.clatl.com/atlanta/NeighborhoodGuide?neighborhood=1287063&locationSection=

What’s the Magic Color for Selling Your House?

Full article:  http://www.metrobrokers.com/featured/buyer-seller/Whats-the-Magic-Color-for-Selling-Your-House

Color plays a big part in selling a house. How you decide to dress your walls can convince a buyer that your home is move-in ready or leave them looking elsewhere. If the goal is to see the sparkle of “love at first sight,” consider picking the right paint palette to suit a range of buyer tastes.

Proper Preparation

When you paint your walls, make sure you prepare the walls properly. Before you start, use a pre-made crack filler or drywall compound to fill in minor cracks and old picture hook holes. Lightly sanding baseboards, window frames and doors is also a great way to ensure that your paint will adhere to the surfaces properly. Make sure you are using the same base paint that currently exists on the surface you are repainting. Latex on latex, and oil base on oil base.

Picking The Magical Colors

Color choices are plentiful, as are the types of paints. When selecting interior colors, consider how you use each room or the feeling that you want to create for the space. White is a great accent, but for walls it is a harsh and cold color. Instead of white, choose warm, inviting and neutral paint colors such as yellows, warm beige and olive tones.

The best rule of thumb for home remodeling is to stick to a color palette that isn’t too bland but also isn’t too bold. For smaller spaces, such as bathrooms, choose colors that make the room look bigger such as warmer whites. For the bigger rooms, select a paint that is a couple shades darker to create a cozy atmosphere. For bedrooms, calming paint colors work best.

Make sure the palette you create flows from room to room. At paint stores, purchase a smaller can of paint and test it on the walls before committing to the color for the entire room.

Wallpaper Can Be A “Turnoff”

Potential homebuyers don’t always like wallpaper or at least the wallpaper you may have chosen 15 years ago. They want simple, clean, warm and inviting rooms and not the potential headache of steam cleaners and wallpaper removal. It is a good idea to consider removing wallpaper or at the very least painting over it where necessary in order to open the space and make the room feel fresh and clean.

Don’t Forget To Look Up

Potential buyers notice water stains and old-fashioned ceilings. If you have a home with a stucco ceiling, it can date your home to a buyer. Before you show your home, consider painting the ceiling with flat white paint. If you have crown molding, make sure you use the same ceiling paint for a consistent professional look.

Learn From The Experts

Choosing a wall color can be overwhelming. If you don’t know or are unsure, ask the professionals. A Better Homes and Gardens Real Estate Metro Brokers sales associate can help you make some of these decisions. Additionally, the mega hardware and home decorating locations have experts who are ready to help you with your decorating dilemmas. When reading magazines, tear out photos of rooms that look appealing and inviting and match the wall colors at the store. Paint color can help you sell a house faster. A fresh coat of paint makes the walls fresh and clean to create an inviting environment for a homebuyer.

Best Times to Buy

Full Article by Yahoo Real Estate:  http://realestate.yahoo.com/info/guides/best-times-to-buy;_ylt=AsiSole6ns_K1KQq2WJRLNjW4JF4

A Conventional wisdom says that you need to stay in a home a minimum of five years to ensure that you recoup your purchasing costs. But with some markets soaring, this advice doesn’t always apply.

It’s All About the Market

Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.

Do not buy high and sell low – if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.

The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.

For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you’d realize $120,360.

It’s All About You

The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don’t have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.

Signs you should not buy right now:

• Will you be moving within the next five years?
• Will you be having kids soon?
• Will you be making a job change?
• Have you recently filed for bankruptcy or is your credit score below 630?

 

If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.

Your Financial Future

Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don’t foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.

With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?

That’s the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.

Ways to Cushion the Blow

On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it’s worth asking yourself hard questions about what you’re willing to do to protect yourself from getting in over your head.

If you answered “no” the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can’t time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.

What to Do First

If you are anxious to get moving, be patient. You have a few things to do first:

• Go to open houses – get the lay of the land
• Talk to a mortgage broker to get pre-approved
• Interview agents (You may want to find an agent at the same time as you look for a mortgage broker – a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
• Review credit report and scores with mortgage broker to determine if any repairs are needed
• Use Zillow.com to find info on neighborhoods that interest you and then use the Home QandA feature to ask current homeowners

Which Home Improvement Projects Offer the Best Returns?

Full Article at Realtytimes.com:  http://realtytimes.com/rtpages/20120103_improvement.htm

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.

“This year’s Remodeling Cost vs. Value Report shows the value of putting your home’s best façade forward, so to speak,” said National Association of REALTORS® President Moe Veissi. “Inexpensive exterior replacement projects are not only crucial to a home’s regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal.”

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.

The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project – upscale vinyl – rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.

The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.

Published: January 3, 2012

Bill could bring relief to plummeting home values

By Carl Willis

DECATUR, Ga. —

A bill moving through the Georgia House of Representatives could bring relief to plummeting home values.
House Bill 794 aims to rework the current law that uses the most recent real estate transactions as the maximum allowable fair market value for the next taxable year. Under the bill, those transactions, including foreclosures, would only be considered in determining home values.
Treva Jones said that could help her. She’s put years of memories and thousands of dollars into her home in Decatur. It’s a home that she hopes will be a legacy that she can leave to her four children.
“The foundation that I thought I was leaving for my children, it’s at stake,” Jones said. “It’s a question mark now.”
What’s in question is the home’s value. Jones said it has been assessed at nearly $100,000 less than the price she paid for it six years ago. It’s due mainly to the number of foreclosed homes all around her.
“The pendulum has swung too far,” said state Rep. Rahn Mayo, (D) Decatur.

That’s why Mayo is sponsoring HB 794. He said it will balance the way tax assessors value homes and communities.
Mayo told Channel 2 Action News reporter Carl Willis that when an earlier bill was moving through the House two years ago it was a much different story. He said people were calling him saying they were hopeful that the tax assessor would lower the value of their home so their property taxes would be more manageable.
“That was a few years ago, and now they’re telling me that value has been dropped so much that they’re so afraid that if they try to sell their home, they’re going to be in trouble and won’t be able to get a reasonable value for their home,” Mayo said.
So far, the bill has received bipartisan support. It would still take foreclosures into account, but wouldn’t keep them as the driver in determining home values.
Jones said it’s a simple fix that could help thousands of homeowners when it’s time to sell.
“It’s a fight worth fighting, and I’m committed to what I have to do protect and preserve the dream that was sold to me,” she said.

http://www.iqrealestate.com/ShowNews.cfm/NEWS/85398

Front Door Face Lift

“Don’t judge a book by its cover” does not apply when it comes to selling a house. In real estate, first impressions can make all the difference, and nothing makes a first impression like the entrance to your home.  Luckily transforming a lackluster entrance can sometimes be as simple as applying a fresh coat of paint, so if your home’s front door currently says “go away,” have no fear.  The guidelines below will help you have your entrance say, “come on in and stay a while,” in no time.

Choose a Theme

Your front door serves as an introduction to your home, so it should reflect what visitors can expect to find inside. It’s also important to take into consideration your neighborhood. With these things in mind, you might choose a modern theme with clean lines, silver or chrome accessories, and matte colors. Or you could go for something more traditional, with deeper hues and brass or antique-white fixtures, complete with features like shutters and flowerboxes.

Add a Splash of Color

A bright purple door can certainly make your house the block’s stand out, but think carefully before you select your paint. In some instances, as with a stone house in the mountains perhaps, a deep raisin with undertones of gray and brown could be the perfect choice. The front door offers a great opportunity to add a splash of originality and warmth to an otherwise buttoned-up exterior.

In general, however, it’s a good idea to steer clear from extremes in your choice of front door paint. Instead, choose a distinctive shade that still promises universal appeal. Steely blues, deep reds, or a sunny yellow – chosen to complement the house itself and any other trim – all make good choices. But don’t overlook classic white as an option either. For some homes – traditional brick, for example – a clean white treatment for the front door helps add welcome contrast while freshening and updating the house as a whole.

Accessorize!

From door knockers to mailboxes, this is your chance to have some fun. Remember your theme and select accessories that fit it. For a modern look, choose sleek metal and modern glass. Want something more traditional? How about wrought iron or brass? If yours is a casual bungalow, unfinished wood planters and simple pewter accessories might be just the thing.

If necessary, replace the house number, too, so that it accentuates the house’s overall look. Do your visitors and delivery people a favor by selecting a style and size for numbers that is clear and large enough to easily be read from the street.

For finishing touches, add fresh flowers in a flowerbox or a seasonal wreath on the door. A stylish doormat that plays off the color of the door can complete the front door facelift.

Shine a Light on It

In your front entrance remake, be sure to remember lighting. Choose a lighting fixture that fits with your theme and adequately illuminates the front door and house number for easy visibility at night. An antique lantern could illuminate the beautiful brass hardware on a traditional entrance beautifully. Or, for a more modern look, try a fixture with straight lines and angles in etched glass. Some designers recommend installing identical light fixtures on either side of the door to provide a sense of balance, a technique that also serves to make your entrance appear larger.

Select energy-efficient light bulbs intended for exterior use, and remember that brighter is not always better. Too much light can create glare and make surrounding areas appear dark and unappealing. Low-wattage bulbs (around 40W) cast a warm, inviting glow while still illuminating the entrance adequately and safely. Compact fluorescent bulbs (around 15W) make an even better choice, because they can last up to 10 times longer and use only a third as much energy as incandescent bulbs to produce a comparable amount of light.

Neighborhood Guide: Decatur/Oakhurst/Avondale Estates

Decatur/Oakhurst/Avondale Estates

Full Creative Loafing Article: http://clatl.com/atlanta/NeighborhoodGuide?neighborhood=1287067

With its historic square, cozy restaurants, quaint shops and vibrant nightlife (bars here stay open an hour later than in Atlanta!), Decatur evokes Rockwellian sensibilities with a modern twist.

RESIDENT’S PERSPECTIVE
“It’s a serious small town that wants to make a difference, and it’s full of honest heart and soul. It’s the place other cities want to be when they make peace with their inner child.”
— Carl Black, 39, Decatur resident/cheerleader, social media monster

UPSIDES
A small-town-yet-progressive vibe; great schools; a strong gay/lesbian community; and beer. Sooooooo much beer, from Twain’s house brews to the Brick Store’s Belgian beer smorgasbord.

And despite having poor highway access, Decatur has a centrally located MARTA station to whisk commuters to jobs downtown.

DOWNSIDES
High liberal yuppie quotient. (If that’s a plus for you, re-file under upsides.)

Swarms of beer lovers on weekends can mean long waits at tiny pubs.

HIDDEN GEM
The 54-acre Decatur Cemetery a few blocks from the town square is the oldest known publicly owned burial ground in metro Atlanta, and contains more than 20,000 gravesites. The cemetery’s older section is included in the National Register of Historic Places. 299 Bell St., Decatur. 404-378-4411. www.decaturga.com.

CRIME
Average total crimes per 1,000 residents: 38.89
Violent crimes per 1,000 residents: 3.75
Property crimes per 1,000 residents: 35.14

HOME PRICES
Median home price: $308,000
Real estate values have held remarkably steady, thanks to strong schools, a low crime rate and a walkable downtown. Decatur also has added hundreds of apartments and condos in just the past few years.

Average rental is $800.

EDUCATION
Grade: A. Decatur’s top-rated school system helps make the city a destination for parents.

GREENSPACE
For everything under the sun (including a pool), opt for Glenlake Park, the largest of Decatur’s park offerings and the closest to downtown. 1211 Church St., Decatur. www.visitdecaturgeorgia.com.

DIVERSITY
Decatur has a large white population, but with around 30 percent African-American residents.

Overall Rating: 83

How to Avoid Three Major Home Buying Mistakes

Not every mistake in a real estate transaction can be reversed, much less fixed before closing. If buyers goof up and make an innocent mistake, they might very well be stuck with the consequences for a long time or, worse, their deal might not even close. It could fall out of escrow.Number One Blunder: Refusing to Confide in a Trusted Advisor

This advisor could be your real estate lawyer or real estate agent. Buyers withhold information for a variety of reasons such as:

• Fear of how they will be perceived
• Irrational belief they have all the answers
• Don’t feel it is important enough
• Lack confidence in their advisor

Experienced real estate professionalshandle such a multitude of transactions and personality mixes, there’s little they haven’t heard before. Your advisors are representing your best interests and have a fiduciary responsibility to do so. They can’t help you if they don’t know what you are doing behind their backs. Plus, they will likely have a better idea for you than you can dredge up.

If you have cold feet and have thoughts about backing out of the transaction, talk to your agent about those feelings. She can help walk you through the anxieties. Pros will help you to determine if you really need to cancel and, if so, manage the transaction so you can get your earnest money depositback.

Number Two Blunder: Altering Financial Pictures Prior to Closing

When I bought my first home, I easily qualified because I had no car payment nor revolving debt. A week before closing, I bought a new car and financed the purchase. New ratios meant I no longer qualified. A frantic phone call to my mother, begging her to lend me the money to pay off my car loan (and threatening to show up on her doorstep with luggage in tow and a cat under each arm), was the only tactic that saved me from losing the house.

Today’s home buyers make the same mistake. Do not buy anything on credit and / or with a credit card once you have completed a loan application. Do NOT buy:

• Automobiles
• Washers, dryers, refrigerators
• Lawnmowers or garden equipment
• Expensive electronics or computers
• Furniture for your new home

Slight alterations in your credit ratios could cause an underwriterto throw out your loan and deny it. If your loan contingency has expired or been removed, you could forfeit your earnest money deposit in addition to losing the home.

Number Three Blunder: Buying the Wrong House

The very first thing home buyers should do is make a list of priorities and define home purchase objectives.Figure out what features and benefits are most important and which you can live without. Before you close escrow, review this list. It’s easy to overlook a major factor that could come back to haunt you later.

A buyer looking for a home in the midtown neighborhood of Sacramento, California, found herself swept up in the excitement of buying a home that was a bit less than she actually needed. She convinced herself that having one bathroom was suitable, but discovered shortly after closing that sharing a bath with two grown sons was impossible. It caused her so much tension and strain that she sold less than a year later. It cost her money to sell and more money to buy a two-bathroom home in another neighborhood. If the market had been depressed or a buyer’s market, she could have lost everything, like this next guy, instead of simply spending a lot more money than was necessary.

Another buyer purchased a home that cost him about $100,000 more than he was comfortable spending. But he fell in love with the Victorian character: the high ceilings, sparkling chandeliers and wide-planked floors. A year later, he could no longer afford to make his mortgage payment. The house was too expensive for him to maintain. He would have been better off buying a smaller home in a more modest neighborhood. But he let his soaring emotions cloud his good judgment. Since his purchase, the market softened and he could not sell. He lost his home to a short sale.

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}

January 2012 Market Update

January 2012 Market Update

2012 shows signs of an improving housing market as the U.S. economy continues its forward-moving yet slow road to recovery.  Although there are economists projecting housing prices will decline further, aided by distressed property sales that sell at a greater discount, these prices are expected to rebound considerably later in the year and continue into 2013.  Factors that continue to impede a speedier recovery in the housing are consumer confidence, job-growth uncertainty, and tough lending standards that keep many otherwise qualified buyers from financing a home purchase. However, consumer confidence may be showing signs of improvement according to a report released by Fannie Mae on December 7, which revealed that consumer sentiment toward home prices is stabilizing and that, for the first time in six months, more people believe that prices will soon begin to rise.  This is an encouraging development, as much of our economic vitality depends upon the overall confidence of the consumer, and could trigger even stronger home sales as more people feel confident that prices will go up.  As the new year begins, many consumers appear to be in a holding pattern, waiting to see how the economy reacts to the different demands both here and abroad.  Yet with steadily increasing sales and record-breaking affordability, now is the time to take advantage of these opportunities to buy or sell a home.Sources: Fiserv, Fannie Mae

This Month’s Video	Interest Rates
	Mortgage rates continued to push historic lows in November, dropping another .08 points, to 3.99% for a 30-year fixed mortgage. “Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today’s homebuyers are paying over $1,200 less per year on a $200,000 loan,” said Frank Nothaft, Vice President of Freddie Mac.
Home Sales
Sales among existing homes rose in November by a seasonally adjusted 4%, to 4.42 million units up from 4.25 million in October, and are 12.2 percent above last year at this time. Lawrence Yun, chief economist for NAR said, “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing.”
Home Price
While median home prices in November rose to $164,200 from $162,500 in October, they are down 3.5% from a year ago. David Stiff, chief economist at Fiserv, stated, “Housing affordability has improved dramatically because of declines in both prices and mortgage interest rates. The monthly mortgage payment for a median-priced single-family home is now $700, compared to $1,140 in 2006—a decline of nearly 40%.” (Based on 2011 Q2 figures)
Inventory
With increased levels of sales, the inventory of homes on the market continued to decrease, falling by 5.8% in November to 2.58 million homes available for sale, or an equivalent of a seven month supply at the current sales pace. This positive sign of increasing sales and lower inventories are keeping the housing market on track for stabilizing home prices and a stronger housing sector.
Buyer/Seller Tip
If one of your New Year’s resolutions is to sell your home, here are a few things to keep in mind: Although the traditional home-buying season starts in the spring, here are some reasons why listing your home now, rather than waiting, could prove to be a smart decision.On average, the number of home sales in January drops almost by half from the previous year’s peak.   A house that is priced right and staged well will stand out even more with less competition.  Lenders, home inspectors, movers, and other vendors also see a seasonal dip in transactions. This could mean  a quicker, easier, and possibly cheaper time to buy, sell, and move.  Even if you’re not ready quite yet, now is a great time to start the conversation with your local real estate agent.  He or she can give you pointers on which repairs and preparations to tackle first, and which ones may not be necessary, saving you time and money. Starting now can help you capture the most buyers by busy season.
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How to find out how much you can afford

Full Article by Trulia:  http://www.trulia.com/guide/financing/how_much_can_you_afford/how_to_find_out_how_much_you_can_afford/

How much home can I afford? It’s a funny question. Unlike buying a measured amount of rice at the market or a length of chain at Home Depot, home-buying doesn’t lend itself to measure-and-cut precision. You can specify an exact amount of lumber, glass, and carpet. You can specify bedrooms and baths. But 3BR, 2BA home in one neighborhood may be half the price of a similar home elsewhere in town.

What you can do—and must do, if you borrow from a conventional lender—is determine the maximum amount of money you’ll be able to borrow. That, combined with your down payment, will determine the highest home value you’ll be able to handle.

Lenders will look at your income compared to your debt (“debt to income ratios”). There are two ratios that are important, the front-end ratio and the backend ratio. The front end ratio is your income compared to your mortgage payment. The back-end ratio is your income compared to your total debt, that is, your mortgage, automobile payments, student loans, and other debt. Conventional loans generally use a 28/36 ratio, that is, your mortgage payment should not exceed 28% of your monthly income and your total monthly debt should not exceed 36% of your monthly income. FHA loans use a 31/43 ratio. If you get lost in the math, a good rule of thumb is that your total gross monthly income should be about three times your total monthly debt to qualify for a loan.

The best way to take into account your entire financial picture is to use one of the many good mortgage calculators available online. You can find a good home-affordability mortgage rate calculator at Trulia.

Like all good, sensible things, the limits on borrow-ability have been pushed and abused. Particularly during the real estate boom ending around 2005, some lenders would approve home loans based on ratios beyond 30 and even 40 percent. That’s how so many people got in over their heads and lost their homes.

Other factors, beyond the scope of this article, will influence loan affordability big time. Adjustable Rate Mortgages, for example, usually offer lower payments in the early years, followed by a bump upward later. ARMs represent another good idea that has been frequently abused in the recent past.

Your max loan amount is one thing. The highest home purchase amount is another. How much cash will you need to put down? That’s for your lender to decide, and it’s wise to talk to several lenders—or visit a finance site such as LendingTree.com. The answer depends on many factors. Some lenders may demand a full 20 percent down. If so, that 233,000 loan amount would have to be accompanied by more than $58,000 in cash, just to purchase a $291,000 home. It may sound scary, but prevailing standards vary a lot—between banks and with the times. Extraneous factors such as federal tax credits have at times reduced down payment demands for some borrowers to as little as 3.5 percent, and have offered $8,000 of down payment assistance

This approach to the affordability question began with your income, and adjusted for personal life circumstances such as other debts. Another way is to start with the home value and work backwards. If the price is $300,000, what sort of down payment will I need? What size loan will make the deal possible? How much income will I need to service that debt?