Your first assignment in school was to get a notebook, and that's good advice for home shopping too. Getting your thoughts together about what you are looking for in your future home will be easier if you can see it in black and white. Begin to research the areas that are of interest. Don't be shy! Ask the experts about neighborhoods, schools, and community activities. Reading available materials on homes in your area of interest is great preparation for finding your dream home.

To become a serious prospect you must speak to a lender about obtaining a mortgage. The sooner the better as this will allow you to focus on the right price range rather than wasting your time chasing a dream that cannot come true. With such a variety of lenders available, it's a good idea to interview a few to find the one that you are most comfortable with. You can contact a mortgage broker on the phone and be pre-qualified within hours by providing some basic information. By taking it a step further and meeting with your broker and filling out an application you will become a more secure prospect to a Seller when you make an offer, because you will be pre-approved.

Which type of loan fits your particular needs? If this will be your first home or a transitional home and you don't plan to be there long, an ARM may be the best type of loan. An ARM rate will be based on the Cost of Funds Index if rates are increasing, and Treasury Bills if they are decreasing. The COFI's are less volatile over time than T-Bills. If this is a home you've been dreaming of and you plan to stay put then you may be happier with the stability of a fixed rate mortgage. Wichever loan you choose, make sure that you scrutinize all the closing costs. You may be required to have a mortgage escrow account that will include your annual taxes and insurance. The lender may also require private mortgage insurance if your down payment is less than 20% of the value of the house. Be sure you understand the terms and cancellation procedures, and that there is no prepayment penalty so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan will allow you to add to the principal at your convenience and will shorten the life of your loan, but will make allowances for loss of jobs or illness, by reverting to the standard payments in your mortgage contract.

The classic rule of buying the worst house in the best neighborhood still applies today. If you are choosing a neighborhood for its school district, and you want to be on a cul-de-sac, chances are good that you may have to make some modifications to the home to customize it to fit your needs. Buying with an eye toward improvement can be your best investment in the right neighborhood. The saying "make money buying a home not selling one" should keep you focused on the long-term importance of the purchase price.

Get your notebook out again! When shopping for a home, decide which features are most important to you such as a fireplace, the type of heat you want, the type of flooring etc. This list of criteria will help when you begin to look at homes on the market, and will save you time by eliminating inappropriate homes right away. Of course you must realize that no existing home will have all the features you want, and that sometimes getting the better value will mean sacrificing some of your criteria.

When you locate the home that you would like to make an offer on be sure that your interests are protected in the offer by including the right to various inspections, such as a home inspection, pest inspection, and the proper inspection for drinking water from a well. Your offer should include a time frame to obtain a mortgage, and requirement for certification of the title V septic.

A standard home inspection is a visual examination of the physical structure and major interior systems of a residential building. An inspection can be compared to a doctors physical exam, however, it should be clearly understood that a home inspection is not a guarantee of any kind. Recent changes in home inspection regulation require Home Inspectors to be licensed with the state. During the home inspection, it is recommended that the buyer be present, as this allows the buyer to ask questions directly and obtain a better understanding of the condition of the home, how its systems work and how to maintain it. It will also make understanding the written report that much clearer.

One of the best programs that ensure peace of mind is a home warranty plan. These are generally purchased by the Seller and will protect the home during the listing agreement and then transfer to the Buyer for a specified period of time. If there is no home warranty in place it can be negotiated in the sale. Specifically a home warranty is a service contract that covers the cost of unexpected repairs or replacement on the major systems and appliances that break down due to normal wear and tear. This type of policy does not replace home insurance but rather overlaps what the insurance policy might not cover, for example if a hot water heater bursts, your insurance will cover the damage caused by the water to your floor and walls, the home warranty will repair/replace the water heater.