From the Houston Chronicle August 22, 2010 Print Edition

There are key reasons to consider buying, remodelingBy JOHN R. MADSEN, CPAParmet, Chapman & Madsen PC

Are you thinking about buying a new home or remodeling an existing one? If you are able to make a minimal initial investment, and you have a reasonable credit score, now is an ideal time. The key reasons that now could be the best opportunity can be summed up in these basic points:

It is a buyer’s market. Prices are depressed because demand for new homes is down. Builders and/or homeowners are willing to negotiate price. Remember the adage, “Buy low and sell high?” Today’s market is at a low. If you are holding onto your home until it is a seller’s market, now is the time to invest in your home and make any desired improvements. Remodeling can increase the value of your home when you are ready to sell.

Mortgage and second mortgage loan rates are at an all-time low. Thirty-year loans range from 4 to 5 percent. Some offer no closing costs. Some of us remember the days when mortgage rates were well over 10 percent. The payment difference on a $150,000 fixed-rate 30-year loan between a 4.5 percent and a 7 percent rate is $238 per month. Rates cannot get much better, and there are some concerns that inflation and higher borrowing rates are coming within a few years. It also seems to be easier to get financing for remodeling projects because sitting tight and increasing the value of what you have can be more appealing to lenders. The market will turn around, and your property will more than likely be worth a higher amount at the point of sale.

A tax incentive is another reason now is a good time to invest in your home. If you work for a company (do not own a business), the best way to reduce your federal income tax is to itemize your

return with mortgage loan interest and your home’s property taxes. This also applies to home remodeling projects.

A home purchase or home remodel typically will appreciate in value and build your personal net worth, not to mention that you will have a great place to live. Remember, selecting a qualified remodeler is as important as selecting a qualified Realtor. Lowest price does not constitute qualified. It is essential to find a skilled, experienced and honest remodeler. The Greater Houston Builders Association or National Association of the Remodeling Industry is a good place to start when searching for this type of remodeler.

This article was provided by a member of the Greater Houston Builders Association’s Remodelors Council. For more information contact the Greater Houston Builders Association, c/o Remodelors Council, 9511 W. Sam Houston Parkway N., Houston, TX 77064; www.ghba.org/remodelors_council.asp; or 281-970-8970. The GHBA Remodelors Council meets every second Tuesday of the month at 11:30 am at the HESS Club.