Buying a Home Is a

Buying a home is a major step in the lives of most Americans. A home is typically the largest purchase most of us will ever make. There are many websites dedicated to the home buying process.

This paper will examine three of them with an eye to answering two questions: when should one buy a home and what upfront costs can be expected? The Motley Fool website, which has an orientation to investing and personal finance, focuses less attention on when to buy a home as how much home one should buy. Fool outlines the criteria lenders use to evaluate potential mortgagees, and places this in the context of the homebuyer.

The homebuyer is instructed to examine his or her personal finances carefully prior to entering the housing market. A home, for example, should not be bought if the intent is only to stay for a couple of years. The home would not likely appreciate in value rapidly enough to cover all of the fees involved in buying and selling the home. Fool also advises that a home should not be bought unless the buyer can truly afford the payments.

The mortgage application process is, in part, a proxy for the buyer's ability to make the payments. If the bank believes the buyer can make the payments, the buyer probably can. Fool advises that the amount of money the bank is willing to lend form the baseline assumption with respect to when to buy a house -- when the house you want is within your means.

The Fool site also posits that one must approach home buying like any other investment and carefully research the home first, before making an offer. A buyer should not bid on a home he or she knows little about, as there are many pitfalls that can occur if the buyer does not do their due diligence.

The final piece of advice from the Fool site is to treat the home like any investment -- do not buy if you cannot afford to have the value go down for a few years. Fannie Mae's website illustrates the basic home buying process. The tone is more informational that advisory. The Fannie Mae site covers the home buying basics -- mortgage applications. Also covered are areas of concern to Fannie Mae's constituency -- predatory lending practices and mortgage fraud.

Whereas Fool provided some information regarding the up front costs of buying a home -- or least indicated that they need to be taken into consideration for buyers viewing the home as an investment -- Fannie Mae does not take this approach. There is little discussion about insurance, fees and other up front costs, all of which are detailed on the Fool site. The Fannie Mae site instead focuses on the provision of information to help buyers avoid scams and other unethical practices.

There is little information with respect to the fees that the buyer might face. The Fannie Mae site also offers very little advice with respect to when to buy a home. From this, one can interpret that Fannie Mae's constituents do not view home ownership as an investment. The financial ramifications of home ownership, therefore, are less a concern since the home will be owned long-term.

The underlying assumption appears to be that everybody should own a home, since no effort is taken to discuss the issue of when to buy. The Freddie Mac site, in contrast, provides good advice to the house hunter. It begins with the assumption that you have spoken to a banker and know how much you can spend. Freddie Mac advises caution at that point. While the temptation is to go out and spend the money right away, this is not the right move.

Instead, Freddie urges prospective buyers to buy when they find a home that meets their needs and remains in their budget. The site specifically cautions against buying too much home, or paying more than you can afford for it. Freddie Mac also hints at the fees that can be a part of the home buying process. The ones listed by Freddie are homeowner association fees and maintenance and upgrades to the building or property.

Freddie focuses on the practical nature of the decision, including hidden costs such as commuting, utility and maintenance costs. The site does not expend much detail outlining other up-front fees, however. Only the Motley Fool website, with its investor orientation, gives hints as to when the best.