The Chicago Tribune just produced a concise article on the problem confronting homeowners going forward: the likely direction of house prices.

Essentially, there is variance amongst American cities regarding the direction that home prices are moving in general, with some areas experiencing a price stabilization and moderate rebound compared to others, with large drops already experienced and more further predicted in the coming months. Regardless of the market a household finds their home located in, strategizing the mortgage to improve and maintain financial health is key.

A classic group that should take heed are potential first-time home buyers, who may be tempted to buy a home given the current incentives and take on a mortgage. Households that revolve credit card balances from month to month are correlated with job insecurity, a higher risk of default on debt, including mortgage debt, and cash flow insecurity. Given this correlation, it is important to not only understand one’s current cash flow picture, but also take into account the very real chance of job loss or drop in total household monthly income, even in the face of the current perceived long-term recovery and indicators that the most recent recession has ended.

But what about households that are unsure of even how to analyze their personal financial information in order to determine their suitability for taking on a mortgage for the first time? A rough, quick idea can be gained from the threshold that the Obama administration articulated earlier this year: spending more than approximately 28% of monthly income towards a mortgage is too dangerous. With the aforementioned gamut of financial security issues, a much lower threshold is prudent for most households. After all, the risks of ruining one’s credit and savings is not worth the mere satisfaction of getting one’s foot in the door to home ownership: quite the contrary, there is nothing inherently wrong with renting a living space until one is much more certain of their financial picture moving forward.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.