It could be the mild weather or low interest rates, but whatever the cause, there is no denying the outlook for the home-buying market is improving.

Realtors are reporting increased activity at open houses, indicating that potential buyers are eager to start looking. While this upswing is a positive sign, I believe that the average consumer may be confused about the economic climate and state of the housing market.

Recent media coverage and expert reports have been inconsistent and have delivered mixed messages. Some report it is the best time to buy in years, while others bemoan the slow market recovery. Even more alarming are the misleading reports of tightening credit guidelines that may discourage potential buyers.

At Salem Five, we have not experienced this ambiguity. In the years following the housing bubble, clients were primarily looking to refinance. In the last few months, however, the number of Salem Five clients looking to buy, rather than refinance, has increased. Interest rates are low and home prices are more affordable than they have been in years. Additionally, home values in Massachusetts are continuing to stabilize, which means buyers and lenders have an advantage in planning and executing strategies.

Here are some tips individuals can use as a foundation when they start to explore options:

• Existing owners who haven’t taken advantage of low rates and refinanced still have time to benefit from the favorable environment. Many owners are staying in their homes and refinancing, using a variety tactics. Renovation financing is a great option, particularly for long-time owners looking to make a lasting investment in their home. 
• Consider the regional markets and guidelines that are most pertinent to your financial situation. Don’t get discouraged by reports that tighter credit guidelines may prevent you from buying a home. Even if you are only beginning, you should check in with a lender, as they will be able to advise which guidelines affect your family.
• Shop around and consider all your options. Home buying isn’t merely about interest rates. While rates are important, there are other factors to take into account. Spending the extra time to develop a cohesive list of priorities will ensure that you go into buying with a well-developed strategy to expand your options. Explore factors like discount points and the different types of mortgage loans.
• Work with a veteran loan officer who can review your options and prepare you for home ownership. If possible, choose a local lender. They will be able to advise you on considerations that others cannot, and individualize your plan. Working with a local lender provides the added benefit of leveraging their reputation and relationships.
• Whether or not you choose an FHA-insured mortgage loan, let the Federal Housing Administration benchmark help you decide how much debt is advisable. Typically, the FHA caps house payments at 31 percent of pre-tax monthly income.

Ed McDonald is president of Salem Five Mortgage Co. LLC, a subsidiary of Salem Five Bank, headquartered in Salem.