A Place to Call Home; No. 3; Home at Last

<v announcer>A place to call home is made possible by a grant from G.E. <v announcer>Capital Mortgage Corporation. <v Speaker>[wedding march plays] <v actor: minister>We are gathered here today to join this couple in a holy union, do you? <v actor: minister>Michael and Jennifer promise to love, honor and maintain your exteriors? <v actor: minister>Do you promise to stay together through sickness, health and dry rot through <v actor: minister>foul weather and fair? Will you protect the foundation of this marriage and promise <v actor: minister>to build additions and multiply. <v actor: minister>Remember, there is no shame in seeking comfort and information from knowledgeable <v actor: minister>exterminators in times of infestation. <v actor: minister>Michael and Jennifer, will you be good neighbors, curb your dog <v actor: minister>and attend all block party celebrations? <v actor: Michael and Jennifer>We will. <v actor: minister>If no loan officer objects to this union. <v actor: minister>I now pronounce you homeowners. <v actor: minister>You may now mow the lawn. Congratulations. <v actor: Jennifer>Oh thank you.

<v actor: Michael>Thank you very much. <v Speaker>[intro music plays] <v Linda Benzel>Buying a home is a major personal and financial commitment, but for most of us, the <v Linda Benzel>benefits far outweigh any drawbacks. <v Linda Benzel>Hello, I'm Linda Benzal. Last time we met some real estate professionals and <v Linda Benzel>went house shopping with their three families. <v Linda Benzel>We also learned about some low interest loan programs for first time homebuyers. <v Linda Benzel>Well, on this, our final edition of A Place to Call Home, we'll make the leap to <v Linda Benzel>homeownership. We will go on a home inspection and appraisal. <v Linda Benzel>Then sit in on a closing. We'll also learn about life after homeownership.

<v Linda Benzel>But first, our friends, the Baxters. <v Linda Benzel>They found a home they like in the South Chicago neighborhood where they both grew up. <v Linda Benzel>Like most first time homebuyers, the leap to homeownership is a financial stretch <v Linda Benzel>for them. Costly, unexpected house repairs could mean financial trouble down the road. <v Linda Benzel>So the Baxters made an appointment with Robin Lawson, a local home inspector, to help <v Linda Benzel>them uncover any hidden surprises before they make an offer. <v Robin Lawson>Good, good, John. How you been, young man? <v John Baxter>Very well <v Robin Lawson>Great. Lisa, how are you? <v Lisa Baxter>Fine, fine. <v Robin Lawson>Great. <v Lisa Baxter>How long you been here? <v Robin Lawson>Been here about 15 minutes. Been doing a little writing, did a walk around the exterior. <v Robin Lawson>All right. Walked on the roof. Roof looks great. <v Robin Lawson>Don't worry about it- <v Lisa Baxter>That's good to know. <v Robin Lawson>-at all. <v Lisa Baxter>OK. <v Robin Lawson>OK. Noticed several little other things that I'm going to show you and point out to <v Robin Lawson>you a little bit of lintle damage on this corner of the house. <v John Baxter>Lintel? <v Robin Lawson>The lintel above the window. I'll show it to you when we get over there. <v Robin Lawson>It's minor. Don't worry about it. Sometime down the road in the future. <v Robin Lawson>You'll want to take care of it.

<v Lisa Baxter>OK. <v Robin Lawson>OK. <v Lisa Baxter>That sounds good. <v Robin Lawson>Really, any other major points of concern? <v Robin Lawson>Any worries at all about anything you've seen when you've been through the house? <v Lisa Baxter>No, I just want to make sure that the plumbing is OK and that the heat and the air <v Lisa Baxter>conditioning is fine. <v Robin Lawson>All of the systems are basically functioning as they should function. <v Lisa Baxter>Right, right. <v John Baxter>That's good to know. <v Robin Lawson>OK? <v Lisa Baxter>OK. <v Robin Lawson>OK, let's take a little walk. I want to show you several little minor things-. <v Robin Lawson>A nonbiased opinion I think is the best thing that you could have. <v Robin Lawson>Absolutely. And a home inspector, he's seen it all. <v Everett Prewitt>In older homes, a lot of times you might have hidden defects, but older <v Everett Prewitt>homes, again, are very popular now, especially in some of the areas I've been familiar <v Everett Prewitt>with, because there's so much latitude to do so many things with them. <v Everett Prewitt>And a lot of times you do get a good bargain. <v Robin Lawson>saying, the masonry looks fantastic. <v Robin Lawson>No mortering to be done whatsoever. <v Robin Lawson>Pull's bib probably needs a washer. <v Robin Lawson>Simple fix. <v Lisa Baxter>OK. <v Robin Lawson>OK. <v Lisa Baxter>That's good <v Robin Lawson>com-ed really ought to be notified about the meter. <v Robin Lawson>OK. The seal's been broke. <v Lisa Baxter>yea... <v Robin Lawson>A little bit of a safety concern there. Ok? <v Lisa Baxter>OK. All right.

<v Robin Lawson>Let them know about it. <v Lisa Baxter>Definitely. <v John Baxter>You find anything else Robin? <v Robin Lawson> Little other safety concern here on the corner. <v Robin Lawson>John got a receptacle cover missing. <v Robin Lawson>You have live wiring in there. Again, a safety concern. <v Lisa Baxter>Ah! OK. <v Robin Lawson>Ok? Minor fix. Safety concern. <v Lisa Baxter>What about the air conditioning unit? <v Robin Lawson>Central air condenser unit. About 15 to 17 years old. <v Lisa Baxter>What's the average age on those? <v Robin Lawson>Average age is at least about 15 to 17 years. <v Lisa Baxter>So we're gonna need to replace this then? <v Robin Lawson>You may need to replace it within five years. <v Robin Lawson>Yeah. That's a distinct possibility. <v Robin Lawson>One thing I see you may be able to do is rewrap the refrigerant line here. <v Robin Lawson>OK. So just make it just a little bit more efficient for you. <v Robin Lawson>May make this thing live just a little bit longer, too. <v John Baxter>You mentioned that we might have to replace this in five years. <v John Baxter>How much is that going cost for the whole unit? <v Robin Lawson>Ballpark figure. John and Lisa, you're looking at about twelve hundred dollars. <v John Baxter>12 hundred dollars-. <v Linda Benzel>The cost of a home inspection varies from region to region, but normally runs from <v Linda Benzel>between 150 to 300 dollars. <v Linda Benzel>It's money well spent. It may keep you from buying a home that needs costly repairs. <v Linda Benzel>And of course, you should keep the cost of any repairs in mind when negotiating the sales

<v Linda Benzel>price. <v Robin Lawson>A lot of heavy duty things going on in here. <v Robin Lawson>OK, Main Foundation Wall looks great. <v Robin Lawson>OK, masonry walls. <v Robin Lawson>I see a little chalky material coming through. <v Robin Lawson>Not a lot. That's a little bit of moisture migrating through the wall. <v Robin Lawson>OK. Don't worry too much about that. <v Robin Lawson>What I do see that you may want to worry about a little bit is <v Robin Lawson>we do have an old led supply line coming in. <v Robin Lawson>This is your water main coming in from the street. <v Robin Lawson>All of your water is coming in from here. <v John Baxter>You said lead? <v Lisa Baxter>Lead? <v Robin Lawson>Lead pipe. OK. <v Robin Lawson>What you may want to do is have the city do a water test on this thing <v Robin Lawson>just to see if there is any lead leaching out into that water. <v John Baxter>Robin, how much would it be to change the entire piping system for that? <v Robin Lawson>John and Lisa, you're looking at replacing this line from the street to the home <v Robin Lawson>and a tune of about twenty five hundred to three thousand dollars. <v Lisa Baxter>It'll be worth it to me honey. <v Robin Lawson>OK. OK. This water does flow over into your water heater. <v Robin Lawson>It's about 15 years old.

<v Robin Lawson>And one of these days it may start leaking, you're looking at a replacement figure of <v Robin Lawson>about five hundred dollars. Should it ever start leaking, there is a valve <v Robin Lawson>up here that you would turn that water off that's flowing into the tank. <v Robin Lawson>OK. If you ever see it leaking, just shut that valve off. <v Lisa Baxter>And then replace it. <v Robin Lawson>And then replace the water. OK. Right. <v Robin Lawson>Furnace is over here. Let's take a look at the furnace. <v Lisa Baxter>OK. <v Robin Lawson>Your heating plant for the building is a Forestier furnace, and <v Robin Lawson>this unit is approximately 15 to 17 years of age. <v Robin Lawson>It looks great. <v Lisa Baxter>It looks really clean. <v Robin Lawson>I'm going to take a mirror and a flashlight and I'm going to look at a little bit closer. <v Robin Lawson>But with maintenance, you should get about 20 to 30 years on this unit. <v Lisa Baxter>So we could use this twice as long. <v Robin Lawson>You you should probably get some more lifetime usage out of this, without a doubt. <v Robin Lawson>Yeah. <v Lisa Baxter>What about the insulation in the attic? <v Robin Lawson>Insulation in the attic, you're going to need about R30. <v Robin Lawson>You're a little short as of now, probably about two to three hundred dollars, <v Robin Lawson>you know, for the insulation retrofit up there.

<v John Baxter>Robin, did you find anything else going on in the house that needs to be done? <v Robin Lawson>By and large. <v Robin Lawson>The role of the home inspector is testing to determine the <v Robin Lawson>condition of a home the day of the home inspection. <v Robin Lawson>And one has to realize that a lot of things can change between <v Robin Lawson>the first time that you do a home inspection. <v Robin Lawson>And by the time you close or you have your final walkthrough. <v Linda Benzel>If the home inspection uncovers major structural problems, the lender may require <v Linda Benzel>that they be fixed before purchasing the house. <v Linda Benzel>There are several ways to pay for these improvements. <v Linda Benzel>You can pay cash or negotiate with the seller to help pay for certain improvements before <v Linda Benzel>closing on the house. Many lenders offer programs that combine your mortgage and rehab <v Linda Benzel>into one loan. These programs are often targeted to First-Time Homebuyers, <v Linda Benzel>but they aren't available everywhere. So check with your lender. <v Linda Benzel>At the Baxter's perspective home, the inspector uncovered a few costly repairs, <v Linda Benzel>but the house is structurally sound.

<v Linda Benzel>Now it's time for the tough decision. Should they make an offer? <v Lisa Baxter>So you think the House on Prairie is the one? <v John Baxter>Yeah, I mean, we can afford it to some degree, but there's a lot of work that needs to be <v John Baxter>done on that house. Lisa, you're talking about six thousand dollars with repairs. <v Lisa Baxter>Its not all repairs. I mean, you're incorporating the paneling and the carpeting and the <v Lisa Baxter>fireplace-. <v John Baxter>Marble fireplace, yes <v Lisa Baxter>Marbling and all that's decorative stuff. <v John Baxter>It had a lot of work to do, though Lisa. We've got to take care of the lead pipe. <v Lisa Baxter>Now the lead pipe from the street worries. Yeah, that does worry me. <v John Baxter>It's going to be a lot of money. And I don't want to drown. I don't want to be in debt <v John Baxter>for the rest of our lives because we want this house. <v Lisa Baxter>Think about the neighborhood. Honey, we grew up there. <v Lisa Baxter>That was one of our criteria. We said we wanted to be in the neighborhood where we grew <v Lisa Baxter>up. <v John Baxter>I just don't want us to be over our heads. <v Lisa Baxter>The university is nearby. <v John Baxter>I don't want us to be over our heads. <v Lisa Baxter>we can send our children to the programs over there, it's four blocks away. <v John Baxter>I don't know babe. It's like if we do this. <v John Baxter>We've got to make sure we got enough money in the bank for after moving into

<v John Baxter>the house. We want to buy furniture. You want to make sure we got the room for the <v John Baxter>nursery. <v Lisa Baxter>I mean, you make a lot of good points, honey. <v Lisa Baxter>Realistically, our rent is higher than a mortgage would be. <v John Baxter>That's true. <v Lisa Baxter>Our insurance would go down. I don't know. <v John Baxter>We can offer a bit. <v John Baxter>It's not gonna hurt to offer a bit. <v Lisa Baxter>Well, I mean, what if they accept it? <v John Baxter>We'll figure something out. Well, we'll just do it. <v John Baxter>[exhasperated sigh] I don't <v John Baxter>know. <v Lisa Baxter>That's crazy isn't it? <v John Baxter>Yeah. <v Linda Benzel>Once the Baxters and the seller have negotiated a price, it's time to apply for the loan. <v Linda Benzel>But before the loan amount can be finalized, your lender will require a professional <v Linda Benzel>appraisal of the property. An appraisal ensures that you are paying a fair price for <v Linda Benzel>the house. And it also protects the lender. <v Linda Benzel>You see, if you stop making payments, the lender has the right to take possession of your <v Linda Benzel>home and sell it to pay off the loan.

<v Linda Benzel>This is known as foreclosure. <v Linda Benzel>The value of the property is the lender's best assurance of recovering his money. <v Linda Benzel>If the appraisal comes in too low, the lender may elect not to grant the loan. <v Linda Benzel>The cost of the appraisal will be included in your closing costs. <v Linda Benzel>The appraiser looks at several factors to determine the value of your prospective home. <v Linda Benzel>First, he compares it to other homes sold in the area. <v Linda Benzel>He may also inquire about the condition and features of these homes. <v Linda Benzel>Next, he'll visit the house and assess the neighborhood. <v Everett Prewitt>We pay a lot of attention to things such as the dynamics of the neighborhood <v Everett Prewitt>and the desirability of certain areas based on what the market <v Everett Prewitt>feels that that area provides. <v Linda Benzel>He notes the proximity of the house to shopping, schools, and parks.

<v Linda Benzel>He looks at the desirability of the neighborhood and how well your prospective home <v Linda Benzel>blends in. He'll also look out for features that detract from the value of <v Linda Benzel>the house. <v Everett Prewitt>Maybe there is an airport and the sound of that particular airport may have some <v Everett Prewitt>negative influence on the value and it may be across from a factory. <v Everett Prewitt>We look at things that might impact on the value of the property that is substantial. <v Everett Prewitt>Nothing that may be a 50 or 100 dollar type of item. <v Everett Prewitt>But we look at things that maybe five hundred a thousand dollars in excess of <v Everett Prewitt>that that might have some impact on the value. <v Everett Prewitt>Also functional things, floor plans. <v Everett Prewitt>How large are the rooms? How well are the utility fixtures <v Everett Prewitt>supply the room- supply the property. <v Everett Prewitt>Is it well heated? Is plumbing supplying water adequately and things of that sort. <v Everett Prewitt>Then of course, we look at physical things such as the condition of the property. <v Everett Prewitt>Age is not a factor so much as the condition of the property itself. <v Everett Prewitt>So all those things go on to the analysis and by comparing that property

<v Everett Prewitt>with other properties that are similar coming up with a value. <v Linda Benzel>Well, the Valdez's have applied for their loan and they're anxiously awaiting a response. <v Linda Benzel>But the lender has just called and asked them to come in to clarify a few items on their <v Linda Benzel>credit report. <v Lender>We need a few letters of explanation on some situations. <v Lender>First one would be your mother and her mattress money? <v Maggie Valdez>Right? Yeah, well, we finally talked her into putting that into a bank account. <v Lender>Great. Tell you what, if you could just have her write a little letter that basically <v Lender>mentions she really never used a bank and that she's saved this over the years. <v Lender>The reason we need that is to just ease the underwriter's so they'll <v Lender>know that there are no outstanding debts that we didn't pick up on. <v Lender>OK. And then if she could also write another letter that <v Lender>says that that was a gift to you to help you with your down payment, and then we'll need <v Lender>a letter from you on the those late payments. <v Lender>A couple of them you had a long time ago at that department store. <v Jeff Valdez>Yeah. We don't understand that. We always pay our bills on time.

<v Jeff Valdez>And, you know, we don't know what happened with that, but we've paid it since then. <v Maggie Valdez>We think it was when we between addresses, we are moving. <v Maggie Valdez>It must have gotten lost. <v Lender>All right, great. If you could just write that, that'll be great. <v Lender>And then as far as the medical bills, you had a couple of outstanding collection items <v Lender>there. <v Jeff Valdez>That's another thing. You know, we thought the insurance was taken care of it and the <v Jeff Valdez>hospital never billed it. And, you know, when we when we finally got the bill, we paid it <v Jeff Valdez>right away. <v Lender>Why don't you just write that and we'll get an updated credit reports and those have been <v Lender>paid. Oh, OK. And then it should be okay with that. <v Lender>So with those letters, your ratios look good. <v Lender>We should have a decision real soon. <v Jeff Valdez>Great. <v Maggie Valdez>Ok Great, thank you very much. <v Linda Benzel>After your loan is approved, the lender will set a closing date. <v Linda Benzel>The culmination of your home buying efforts. <v Linda Benzel>For some, the paperwork can be confusing and intimidating. <v Linda Benzel>So it's important to find out what you'll be signing before you close. <v Richard Raymer>I think a purchaser should in preparing for a closing.

<v Richard Raymer>Number one ask for a copy of the closing documents 24 hours in advance. <v Richard Raymer>They are entitled to that as a matter of law. <v Richard Raymer>The Real Estate Settlement Procedures Act allows a purchaser to have the documents one <v Richard Raymer>day in advance. And it's important, I think, to do that in your own home or to take <v Richard Raymer>it to someone who can help you with those documents, because it's not something you do <v Richard Raymer>every day and you can't possibly read all this material. <v Richard Raymer>At the closing and understand it. <v Richard Raymer>Secondly, it would be nice to know how much money you're going to need before you get <v Richard Raymer>there. And if you've got the closing statement ahead, you can look at all those figures <v Richard Raymer>and you're going to have to have a cashier's check for that amount in virtually every <v Richard Raymer>place in the United States to close. <v Linda Benzel>A little preparation will mean peace of mind at the closing. <v Linda Benzel>Now, let's sit in on a closing with a couple who didn't prepare and a lender <v Linda Benzel>who had other things on his mind. <v actor: Lender>So that's when I made the move into real estate. <v actor: Lender>Yes, as a hedge. So my long term investments are taken care of. <v actor: Lender>And then in the short term, I can speculate more.

<v actor 1>Excuse me. <v actor: Lender>That's right. Excuse me, Joe. <v actor 1>I hate to bother you, but what is this? <v actor: Lender>Oh, that that's the part that you sign. <v actor 1>Well, I know that. But what am I signing? <v actor: Lender>Oh, that's my fault. You should understand everything about this transaction because <v actor: Lender>buying your first home is the most important investment you'll make in your lifetime. <v actor 1>But you still haven't told me what I'm signing. <v actor: Lender>I didn't? Oh. Sorry that's my fault. <v actor: Lender>I should explain these things to you because buying your first home is the most... <v Actor 2>Most important investment you can make in your life. Yes, you've said that and we've <v Actor 2>heard it. But what what are we signing? <v actor: Lender>Oh, these. Yes, these are the important forms. <v actor: Lender>They're so important, in fact, that I need you to sign this form as well. <v actor: Lender>This verifies that I've explained the importance of the important forms. <v actor: Lender>Just sign in triplicate in the bottom and then initial. <v actor: Lender>Unless, of course, you use your initials as your signature, in which case I'm going to <v actor: Lender>need a thumbprint on the stamp pad and illiterate on the tissue. <v actor: Lender>Thank you. Eh Joe oh it's nothing. <v actor: Lender>Just clients. Yeah.

<v actor: Lender>Yeah. They're that way, aren't they? <v actor: Lender>Certainly I'd love to hear that. <v actor: Lender>A 64 get out of here. <v actor: Lender>I thought he was the caddy. <v actor: Lender>Yes. Yes. I've got to get back to them now. <v actor: Lender>Thanks for calling, Joe. Bye. <v actor: Lender>Now, now, now. That wasn't too bad, was it? <v actor: Lender>Told you can get through that stuff. Now, you two lovebirds enjoy your little love nest. <v actor: Lender>Thanks for coming in. Enjoy your lives. <v Actor 2>What have we done? <v actor 1>According to this, we just bought a Ford Pinto. <v Actor 2>I signed the Declaration of Independence. <v actor 1>I signed a petition to annex Canada. <v Actor 2>The Magna Carta. <v actor 1>For Canada. <v Linda Benzel>Now, the closing doesn't need to be scary or confusing. <v Linda Benzel>It's simply the formal process of transferring the property title from the seller to you. <v Linda Benzel>The processing of the loan and transferring of the title costs money, of course.

<v Linda Benzel>And as the buyer, you'll be obligated to pay a variety of fees at the closing. <v Linda Benzel>They include origination fees charged by the lender to cover the administrative <v Linda Benzel>cost of processing the loan, escrow payments, which include <v Linda Benzel>hazard and mortgage insurance premiums when necessary, and real estate taxes paid <v Linda Benzel>in advance for the year. <v Linda Benzel>And title Charges. The title shows that you own the property. <v Linda Benzel>Fees for legal examination of the title, as well as insurance against future claims on <v Linda Benzel>your property, are included in the title insurance costs. <v Linda Benzel>In addition, you'll pay recording and transfer charges which make the ownership of your <v Linda Benzel>home a matter of public record. <v Linda Benzel>And you'll pay an attorneys fee, a payment to the closing attorney for preparing <v Linda Benzel>and reviewing the documents needed to close the loan. <v Linda Benzel>Now, not all closing costs are paid at the closing your credit report and appraisal <v Linda Benzel>fees, for example, must be paid when you apply for the loan. <v Linda Benzel>Closing costs can run into the thousands of dollars. <v Linda Benzel>It varies across the country, but ranges from as low as two to three percent of the loan

<v Linda Benzel>amount to as high as four to six percent. <v Linda Benzel>You may wish to negotiate with the seller to contribute to these costs. <v Linda Benzel>You might also negotiate something called a temporary buy down, where the seller <v Linda Benzel>contributes to the temporary reduction of the interest rate to make your loan payments <v Linda Benzel>more affordable. During the first couple of years. <v Linda Benzel>Well, for the Baxters, the big day has finally arrived. <v Linda Benzel>Let's sit in as the Baxters close on their new home. <v Mike Lapore>The bad news is at the end of all this, you might have writer's cramp. <v Mike Lapore>The good news is at the end of all this, you will be homeowners. <v Linda Benzel>At the closing are John and Lisa, realtist Barb Johnson. <v Linda Benzel>And the closing attorney, Mike Lapore. <v Linda Benzel>The sellers also typically attend. <v Linda Benzel>But in this case, were unable to. <v Linda Benzel>So they signed the appropriate papers in advance. <v Linda Benzel>One of the first papers you'll sign is the truth and Lending Form. <v Linda Benzel>Lenders are required to provide a full disclosure of all costs associated with <v Linda Benzel>the mortgage. This includes the annual interest rate on the loan, including all

<v Linda Benzel>points and application fees. <v Linda Benzel>The finance charges and total loan cost over the life of the loan. <v Linda Benzel>The amount financed and the total number of years you will pay on the loan. <v Mike Lapore>And another important item is the late charge provision. <v Mike Lapore>You Will note that you do get a 15 day grace period every month in which to make <v Mike Lapore>your payments. However, if you go beyond the 15th day, they may assess <v Mike Lapore>you a five percent late charge penalty that's five percent of this principal <v Mike Lapore>and interest amount. <v Linda Benzel> next, you'll sign the mortgage loan commitment, which summarizes the lender's loan <v Linda Benzel>commitment to you, including the amount of the loan origination fees and interest <v Linda Benzel>rate information. <v Lisa Baxter>Would we be locked into this or will we have the option to refinance at some later day? <v Mike Lapore>That's a good question, Lisa. No, you would not be locked into this. <v Mike Lapore>There is no prepayment penalty associated with this loan. <v Linda Benzel>One of the most important papers you'll sign is the note. <v Linda Benzel>It's the legal agreement to repay the amount you've borrowed from the lender. <v Linda Benzel>It contains the loan amount and interest rate, property address, your promise

<v Linda Benzel>to repay the loan as well as your first payment due date. <v Mike Lapore>Review the back. Just said that you are both obligated under the snow equally jointly. <v Mike Lapore>And I need your signatures on the bottom. <v Linda Benzel>Next, you'll sign the mortgage. This document gives the lender a security interest <v Linda Benzel>in your property, obligating you to the payments. <v Linda Benzel>It contains your name. The loan amount. <v Linda Benzel>The property address and legal description. <v Linda Benzel>And a listing of any covenants or restrictions on the property. <v Mike Lapore>One thing that isn't here that I will point out to you that you not allowed to transfer <v Mike Lapore>the title to the house. No transfer title can occur unless you get their permission. <v Mike Lapore>Now, that goes along with the fact that this is not an assumable mortgage. <v Linda Benzel>You will also need to review the title insurance, which ensures that the property is free <v Linda Benzel>of any liens or encumbrances that could keep the present owner from transferring the <v Linda Benzel>title to you. Also, the deed, which transfers the seller's legal interest <v Linda Benzel>in the property to you. The deed is your proof that the house is yours.

<v Linda Benzel>The bill of sale transfers other personal property like the refrigerator washer <v Linda Benzel>and dryer from the seller to you after signing these and other papers. <v Linda Benzel>The Baxters then give the closing attorney a cashier's check to cover the remainder <v Linda Benzel>of their down payment and the agreed upon closing costs. <v Linda Benzel>They must also show proof of hazard insurance, which ensures the house against fire and <v Linda Benzel>water damage. The closing should take around an hour to complete. <v Linda Benzel>One of the last orders of business is the disbursement of fees to the seller and <v Linda Benzel>real estate agent. Finally, the house is yours. <v Barbara Johnson>Lisa and John, I'm so happy for you. Congratulations. <v Barbara Johnson>Here are your keys. <v John Baxter>Oh wow. hey that wasn't so bad. Thank you, Barbara. <v Linda Benzel>Well, now that you're a homeowner, there is no landlord to fix things when they break. <v Linda Benzel>So you'll have to do it yourself. <v Linda Benzel>A good home fix-it book will be indispensable. <v Linda Benzel>It can show you how to install a light fixture, change your furnace filter or patch the <v Linda Benzel>drywall. To do the job right you'll need the right tools.

<v Linda Benzel>So count on buying some. You can also expect to invest in a lawnmower, garden supplies <v Linda Benzel>and other equipment to keep your investment in good shape. <v Linda Benzel>It's all part of the cost and fun of home ownership. <v Linda Benzel>Budgeting for supplies and repairs will prevent financial surprises down the road. <v Linda Benzel>And there'll be other monthly expenses, like the utility bill. <v Linda Benzel>You can ask the seller to supply a summary of utility expenses for the past year to <v Linda Benzel>help with your budget planning. Now, the most important monthly bill you pay is the <v Linda Benzel>mortgage. It should be paid promptly every month. <v Linda Benzel>If you find yourself with additional cash and can afford, say, an extra 50 to 100 <v Linda Benzel>dollars a month, you can make a supplemental payment that's applied directly to your loan <v Linda Benzel>principal. It's a great way to build equity in your home quickly. <v Linda Benzel>So what if the worst happens, what if even after careful planning and budgeting, you lose <v Linda Benzel>your job or become financially strapped? <v Linda Benzel>Well, the first thing to do is to talk to your creditors.

<v Linda Benzel>Honesty and good communication are key to maintaining good credit. <v Linda Benzel>If your financial problem is short term, your lender may extend payment terms until <v Linda Benzel>you're on your feet again. If your debts are more serious, your best option might <v Linda Benzel>be to work with your lender to sell the house and avoid foreclosure. <v Linda Benzel>You can also seek professional help. <v Linda Benzel>The Consumer Credit Counseling Service is a nationwide nonprofit group that offers <v Linda Benzel>inexpensive financial counseling. <v Jeff Valdez>Good it's your turn, too. OK. <v Linda Benzel>Well, the Valdez's Johnson's and Baxter's have had their ups and downs, but they've <v Linda Benzel>finally become homeowners, though the process felt slow and painful at times. <v Linda Benzel>The results were worth it. There's a special pride in home ownership that's hard <v Linda Benzel>to describe, though. It comes with risks and responsibilities. <v Linda Benzel>It's an opportunity to make your own personal statement, to set roots in the community, <v Linda Benzel>to raise a family in a very personal environment. <v Linda Benzel>For most of us, there's nothing quite like a place to call home.

<v announcer>A place to call home is made possible by a grant from G.E.

<v announcer>Capital Mortgage Corporation.