Once you understand the principles for understanding and using wealth, have your priorities in order, decide what you want to accomplish in life, and learn to live on a budget, it will often be the case that one of your next goals is to own a house. I like how some people have defined the word “house”: “A house is a hole in the middle of land that you pour money into.”

How true that statement is. There are very different connotations of the word “home” and the word “house,” as illustrated by the following story:

A little boy was dutifully following his parents as they were looking at new houses. At the conclusion of a successful day where a decision was made to purchase the house, the real estate broker said to the little boy: “Young man, you are in luck. We are buying you a home today.” The little boy, somewhat taken aback, replied: “No you aren’t. You’re not buying me a home. We already have a home. You are just helping us buy a house to put it into.”

It is important to remember the difference between a home and a house as you look for and eventually purchase a house. A house is what you live in, while a home is what you bring to the house. The purpose of this section is to help you avoid some of the pitfalls that often present themselves when first-time house buyers make the important commitment of buying a house. For the purpose of the remainder of this section, I will use the words “home” and “house” interchangeably.

When you have completed this section, you should be able to do the following:

1. Understand how a house fits into your financial plan and our leaders’ council on home buying.
2. Understand your options in the housing decision.
3. Understand the process of buying a home.
4. Understand how to compare different types of loans with different fees and points.