erhaps the biggest, best, and most important investment of your life is buying your own home. Finding the house that's just right for you and your family can be an enjoyable experience or an ordeal, depending on how well you educate yourself on what to do, what not to do, and what to look for—before you begin your search.      For more information

It's smart
to have a
professional inspection
of the house
you're buying.
Where to begin
Begin your home buying expedition at your credit union. Your first move toward buying a home is to find out how much you can afford and have the credit union prequalify you for a mortgage. Usually, a credit union lending staff member completes an application then runs a credit report for members.

Sharon Saccone, vice president of mortgages at Suncoast Schools Federal Credit Union in Tampa, Fla., says, "We go the extra mile for our members. We want to help them get a home and really want to say yes when they apply for a mortgage loan." Saccone stresses the importance of prospective home buyers being prequalified before they begin shopping for a home so they know how much home they can afford.

Once you know how much house you can afford, itemize what you are looking for in a home. Of course, like most people, you probably have a dream home you'd like to build or buy when you win the lottery. In the meantime, determine what features you really need and what features you'd like to have. How many bedrooms and bathrooms does your family need? Do you need a large kitchen, a large yard, or space for pets?

Drive through neighborhoods you prefer. Look for nearby schools and convenient shopping areas. When you've settled on several neighborhoods, you're ready to start shopping for a house. This could take a few weeks or several months. You soon will discover that all your preparation saves time overall.

Shopping for your home
You may believe you can find a house without a real estate agent, and you may be right. However, few prospective buyers, especially first time home buyers, can compete with the knowledge and expertise of a truly professional real estate agent.

Driving around a neighborhood and calling every agent whose sign is posted in front of a house will result in far too many phone calls from agents all wanting to show you the house you saw as well as many others. If you know someone in real estate or if a friend or relative recommends an agent, contact the agent, explain that you are prequalified and that you're looking for a specific size house with certain features in a specific neighborhood—in a specific price range.

A qualified, prepared agent should contact you the next day with a stack of computer printouts of houses that come close to your specifications and price range. You can peruse these listings, many with pictures, and decide on those you'd like to see. The agent will make appointments for you to see those houses.

As you look, the agent will make notes about your likes and dislikes and continue to search to find the right home for you. If you drive by a house that interests you, call your agent to set up an appointment to see it. You also may find homes on the Internet. Your agent also can arrange for you to see these.
     The best place
     to begin a
     home buying expedition
     is at
     your credit union.

All your preparation
will save you
time overall.

Selecting the right house
In your tours, take time to inspect each house thoroughly. Walls that need painting; blinds, drapes, or curtains that need cleaning or replacing; carpeting that is dirty, worn, or faded; landscaping that needs trimming or a lawn that desperately needs watering and fertilizing should not be deterrents to a property that otherwise meets your needs.

Often, neglected items can help you make a lower offer than the asking price for a home. Remember, these repairs are not as costly as a new roof, a new kitchen, new wiring, or new plumbing.

If the overall house seems structurally sound and in good condition in a desirable neighborhood, remind yourself that you can do the cleaning, the painting, and the yard work if you can get a good price on the house. This challenge offers you the opportunity to paint the house and to install carpet in colors you prefer. You may find an excellent buy in an older home that just needs updating.

If buying a new home, you should take into account additional expenses that may not be included in the purchase price such as window treatments. And if you visit a newly developed subdivision, you'll most likely learn that these homes are assessed a monthly fee for community development.

Making an offer
Your agent can find out when the seller purchased the house you're interested in, how old the house is, and what the seller paid originally. A good agent can advise as to whether the house is fairly priced for the market. When you decide on a fair price to offer for the home, your agent will prepare a contract and suggest contingencies, such as the property passing a home inspection and termite inspection. These contracts usually stipulate that the homeowner will make required replacements or repairs or treat the home for termites with costs not to exceed a specified percentage of the selling price, usually one percentage point or two percentage points.

Your agent will present the contract to the sellers and secure their signatures and note any changes the sellers request. Of course, the sellers may not accept your offer if it is less than the asking price. They may insist on the full price or they may make a counter offer. Your agent then will return the contract to you for consideration. At this point, you can accept the terms, negotiate further, or find another house.

You'll be required to make a good faith or "binder" payment when you sign the contract. This amount, usually $1,000 to $5,000 depending on the purchase price, is held in escrow by the agent's office and is credited toward your down payment. If you cancel the contract without just cause, you will forfeit this deposit.

Next, take the signed contract to your credit union where a mortgage loan officer will work with a loan processor to order a termite inspection (where applicable), an appraisal, and verification of your employment.
     In touring properties,
     take time to
     inspect each house

Home inspection
Either someone at your credit union or your agent will recommend a qualified home inspector. Your lender may not require this step, but it's to your advantage to have a professional inspection of the home. Plan to be at the house when the inspector is checking it for needed repairs, and make notes of items he or she identifies for follow-up.

The home inspector should check from the basement to the roof, including all appliances; the plumbing, heating, cooling, and electrical systems; walls; floors; insulation; ceilings; doors; windows; wells; foundation; septic or sewer; and the overall structure. The seller is obligated to make the recommended repairs; however, if the recommended repairs cost more than the one percentage point or two percentage points specified in the contract, the sellers can cancel the contract or, depending on the contract wording, you may pay the difference or decide to make the repairs yourself.

Down payment
Traditionally, the down payment is 20% of the purchase price with a mortgage loan for 80%. But, today, mortgage programs are available at 100%, 95%, or 90% of the purchase price, or less. Or, you even may decide to make a larger down payment to reduce monthly payments.

Before the scheduled closing date, depending on your credit union's closing process, the loan processor may give you the name and location of a title insurance company and time for the closing. The processor also might send you a closing statement so you know what you are to pay at the closing, including your down payment if it�s not already in escrow at your credit union. Every lender handles closing differently. Some states require that attorneys handle real estate closings; others use title insurance companies.

Unless you and the sellers have agreed to a different arrangement, you will receive the keys to your new home at closing and can move in at any time.

For more information

© 2000 Credit Union National Association Inc.