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Teen Resources

Large Purchase: Home

Aside from purchasing a car, buying a home or a condo is probably one of the biggest decisions you will ever make. But, don’t let that scare you. There are lots of benefits to being a homeowner and you have a lot of resources at your disposal to make the actual process of buying the home seamless.

To purchase a home, you must come up with a portion (typically 20%) of the purchase price in cash - also known as a down payment. The remaining balance due is financed using a mortgage loan. This will be a lot of money due over a long period of time, but don’t worry! One of the benefits of being a homeowner is that all interest paid on your mortgage loan is tax-deductible.

Once you've decided that it’s the right time to buy a home, there are a few important steps to follow.

  1. Make a list of all the items that your new home must have and those that you would like for it to have. Consider the following:
    1. number of bedrooms and bathrooms reputation of the school district
    2. distance to freeways and your work
    3. necessary space required for pets
    4. does it fit the needs of all members in your household
  2. Hire a real estate agent that will search for homes that meet your criteria and arrange tours.
  3. Get pre-approved for a mortgage loan. This way, you know what you can afford and when you find the home you’ve been searching for, you are one step closer to purchasing.
  4. Make sure the home you are considering has a full inspection. Anything that goes unnoticed or undocumented will become your responsibility to fix down the road.
  5. Depending on when you make an offer, this is the best time to negotiate the sales price. Do not assume that you have to pay the asking price.

Over the course of owning a home, you will likely see the housing prices increase and decrease several times. Regardless of the momentary fluctuations, a mortgage is considered to be one of the best long-term investments you will ever make. The rate of return when you decide to sell is usually much higher than what you could have made with a general savings account or in the stock market.

As with any other financial decision, you will want to shop around for the best rate. Mortgage rates change daily, if not hourly, so be sure to pay attention when the time comes to lock in your rate. Aside from rates, you’ll want to compare the fees that mortgage lenders charge. Credit union rates and fees are typically some of the lowest around, but don’t take our word for it…shop around!