Perth Amboy evening news., 1923-11-27
HASKLN,S
LETTER
Building or Buying a Home
Rv Frederic j. HasIxin


home has been said to need the ex-
pert advice of a real estate dealer,
builder, carpenter, an archi-
tect, a banker, a building and loan
association, a landscape gardener.
plumber, an electrician, and city
building inspector. To get all that
in the ordinary course of CONNER
cial or professional service would
cost him at least a thousand dollars.
He can get it from the government
through the Division of Building and
Housing of the Department of Com
merce for five cents. That insig-
nificant sum will secure a compila-
ton of the best expert opinion that
the department has been able to
command. 1t is one of the results
of Secretary Hoover's program of
cooperation between the govern
ment and all building interests to
establish better and more uniform
standards for house construction
and to disseminate information as
to housing facilities.
Numerous standards for building
materials have been fixed and ac-
cepted by the building trade. STAN
dard plans for small homes have
been prepared and are available to
the public at nominal cost, and
the architects are now working out
a series of unit houses which give
promise that ultimately home own
ers may enlarge or repair their
houses merely by ordering parts"
or "units."
The government experts will tell
you how much to pay for a house
~ f1n Nfac nF q
to devote to monthly or annual pay
ments. They will advise you as to
the amount of savings required, how
to take care of your savings, and as
to all phases of the financial opera
tions you must see through in the
course of acquiring a home. They
have suggestions to offer as to the
location of a home with reference
to transportation facilities, land
values, character of the neighbor-
hood, proximity of schools, parks,
and Fairgrounds, and having the
title examined. AS to the house it
self they have ideas that you may
make yours with regard to general
arrangement, living room and fire
place, dining room, kitchen, bed
rooms and closets, bathroom, stair
ways, basement. exterior and set
ting. And when it comes to the ac-
tual building they will tell you about
getting a permit, choosing a con-
tractor, paying him and checking
him up on the things that can not
be seen.
The first big question. If not the
most important, for the would-be
home owner to settle is as to how
much he should pay for his proper
ty. This does not mean the deter
mination of the value of the real
estate he is to acquire and the cost
of building. but rather how much
he can afford to invest on the basis
of his income. The government
specialists in that line, after making
extensive researches, have come to
the conclusion that the value of
house and lot ordinarily should be
between one and two-thirds and two
and a half times the family income.
This makes the usual proportion
twice the income.
Thus the man with $4,000 in
come can afford to own a $4,000
home, while the man with $4,000 a
year can pay for and maintain a
$4,000 establishment.
OF course this estimate is not a
hard and fast one. Differing condi-
tions make for fluctuations in it. For
example, a family living in small
town and having a garden and small
poultry yard can afford a more eX-
pensive home than a family with
the same income living in city or
suburb with higher taxes and street
car or railroad fares to add to the
cost of living. No definite rule or
recommendation is made as to the
percentage of the income that can
or should be devoted to paying for
the house and meeting the other ex-
penses incident to owning a home.
However, it is pointed out that a
family that is paying a sixth of its
income for rent should be able to
devote at least a fourth to buying
and maintaining a house, for the
amount thus used may include both
rent and savings. In addition to in
terest payments and instalments on
the principal of a loan, however, al
lowance must be made for renewals
and repairs, taxes, special assess
ments, insurance, water tax, fuel and
other items that families accustomed
to living in apartments sometimes
overlook when making their home
owning plans.
The government experts have
worked out q table that is of great
interest to home builders. 1t shows
the value of the house and lot that
can be afforded on an income of
certain amount or range, the amount
of the first cash payment that must
be made as a minimum, the amount
of the loan that will be carried on
the property, the amount that must
be paid as interest and amortization,
the estimated taxes, insurance and
upkeep, the total annual expenses,
the amount of savings included in
that item and the part of the eX-
penses comparable with rent. 1t is
stated that the table does not at
tempt to set up arbitrary standards.
but is fairly typical and shauld be
useful as a basis from which to
| figure.
| The table shows that a family
with an income of from 81 200 to
$500 should be able to handle a
$4,000 property. The first cash pay
ment would be 5000, leaving a loan
of $2,400, on which the interest and
| amortization charge at II n per cent
would be $500, or $25 per month.
Taxes. insurance, and upkeep are es-
timated at $120, making a total an
nual payment sof $420, or $35 per
month, of which $3.50 may be re-
garded as savings, during the first
kyear, and $270 as expenses compar-