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Moves to make


Always dreamed of being in the right place at the right time? You may be right now.

Is it time to cash out?
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And if you were already planning to sell and move to a smaller home or a less expensive area in the next few years, and you really want or need that equity, then getting out before values drop could be a smart move.

4. How stable is your income?
When it comes to making that monthly payment, your mortgage is only one-half of the equation. You also want to look at your income and job stability. If you work for the only plant in town, and you suspect it might close, that's important to consider.

If you had to trade jobs, would you have to move? How likely is it you could change jobs or be transferred?

Does the family have one or two incomes? What are your options if something happens to some or all of the income?

5. How much equity do you have?
Equity provides a cushion if your home goes down in value. If you bought at $200,000, you've been living in it for a number of years, and it's now worth $300,000 on paper, you've got a little breathing room.

If you bought when market prices were the highest, leveraged every cent to get into the house, have only been there a short time, and prices are headed south, then you're much more vulnerable. If you have to sell, you may not get what you owe.

Any time you have less than 10 percent to 15 percent equity in your home, "you're a little at risk," says Ilyce Glink, author of "50 Simple Steps You Can Take to Sell Your Home Faster and For More Money in Any Market."

"With the cost of a sale, transfer tax, moving expenses, borrowing 90 percent could mean you end up walking away with nothing in your pocket."

But if your equity level is closer to 15 percent to 20 percent, "you still have a little bit of cushion," she says.

Even if you're a new homeowner, you don't have to panic.

"There's not a lot you can do," says Guttentag. "You can't prevent the decline in your equity. So as long as you have the capacity to keep making the payments, you're OK."

6. What's happening in the local economy?
When talk turns to housing bubbles, remember: We don't live in one big homogenous area, but many little communities.

"It's very uneven," says Retsinas. "Nationally, home prices nominally haven't fallen in 50 years. That doesn't mean they won't fall in a particular area. Don't be swayed by the national number. Look at what's happening in your area."

Analyze the neighborhood market, says Glink. Are houses taking longer to sell? Are sellers getting more than they paid? "That's key," she says. "One other thing to ask: How long am I going to stay here?

-- Posted: March 1, 2006
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