Do we dig deep and buy a dream home or settle for a starter home?

Choosing between a smaller house in an affluent neighborhood, an older, bigger house in a more working-class community or a brand-new home is not easy. If you're in this situation, start by examining your priorities and asking the following questions:

• Is the surrounding neighborhood or the home itself the most important consideration?
• Is each of the neighborhoods safe?
• Is quality of the schools an issue?

Do any of the areas seem to attract more families with children or adult residents? And where do you fit in? As for the return on your investment, home-price appreciation is hard to predict. In the late 1980s, and again 10 years later, the more expensive move-up housing appreciated wildly. But during the recession that followed, smaller homes tended to hold their value better than more expensive ones.

  How do you choose between buying and renting?

Home ownership offers tax benefits as well as the freedom to make decisions about your home. An advantage of renting is not worrying about maintenance and other financial obligations associated with owning property. There also are a number of economic considerations. Unlike renters, home owners who secure a fixed-rate loan can lock in their monthly housing costs and make prudent investment plans knowing these expenses will not increase substantially. Home ownership is a highly leveraged investment that can yield substantial profit on a nominal front-end investment. However, such returns depend on home-price appreciation.

  What are the pros and cons of adding on or buying new?

	Before making a choice between adding on to an existing home or buying a larger one, consider these questions:
	How much money is available, either from cash reserves or through a home improvement loan, to remodel your current house?
	How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
	What do local zoning and building ordinances permit?
	How much equity already exists in the property?
	Are there affordable properties for sale that would satisfy your changing housing needs? Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value.

  What do all of those real estate acronyms in the ads mean?

If you find yourself stumbling over weird acronyms in a real estate listing, don't be alarmed. There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges).

Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section:   assum. fin. -- assumable financing dk -- deck gar -- garage (garden is usually abbreviated "gard") expansion pot'l -- may be extra space on the lot, or possibly vertical potential for a top floor or room addition. Verify actual potential by checking local zoning restrictions prior to purchase. fab pentrm -- fabulous pentroom, a room on top, underneath the roof, that sometimes has views FDR -- formal dining room (not the former president) frplc, fplc, FP -- fireplace grmet kit -- gourmet kitchen HDW, HWF, Hdwd -- hardwood floors hi ceils -- high ceilings In-law potential -- potential for a separate apartment. Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first. large E-2 plan -- this is one of several floor plans available in a specific building lsd pkg. -- leased parking area, may come with an additional cost lo dues -- find out just how low these homeowner's dues are, and in comparison to what? nr bst schls -- near the best schools pvt -- private pwdr rm -- powder room, or half-bath upr- upper floor vw, vu, vws, vus -- view(s) Wow! -- better check this one out.

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