Home buying is a critical financial decision in one’s life. First-time home buyer in Michigan often makes costly mistakes that derail their purpose of homeownership. If you wish to make your home buying journey seamless, adhere to the following checklist. This checklist serves as a thorough guide on how to buy a house in a hassle-free manner.
Figure out the budget
Plan your finances before starting your quest for house hunting. First-time home buyers in Michigan will need to apply for a loan to get a new house, which requires an ideal lender. The lack of financial planning could lead to the denial of mortgage requests. Therefore, be clear on your fiscal standing before initiating the house hunt. You can take advantage of a mortgage calculator to gain clarity over critical facts including estimated property tax, monthly mortgage payment, down payment, etc.
Check your credit score
Your credit score will play a vital role in qualifying for a loan and estimating the interest rate on your mortgage. Even if you have a healthy credit score, re-check your credit report and address any errors.
It is a good idea to address all the previous liabilities before applying for a mortgage. This will help in improving the credit score and reduce the debt-to-income ratio. Once you have estimated how much budget you can manage, the next step is finding the amount of down payment.
The down payment size is primarily evaluated by the type of mortgage you get. Down payments on a general mortgage start around 3-5 percent of the home’s purchase cost. But, if you wish to avert private mortgage insurance, you will need 20 percent down. Irrespective of the down payment’s size, it is ideal to have some buffer amount to address closing costs and any repairs expenses that appear after the home inspection
Get in touch with the certified lender and avail pre-approval
Most home seekers consume ample time for finalizing their dream home. During the search phase, you might come across various home options that fit your price range. But the price cannot be a sole factor in ending the home hunt quest. You will have to dig deeper and consider other factors like road connectivity, basic amenities, and so on for making the best purchase. Once you are done with that, proceed to engage with the certified lender for much-needed credit. The lender will examine your credit application and accordingly probe the finance to determine how much amount they can lend. Once satisfied, the lender will grant the pre-approval letter.
Find a real estate agent
A real estate agent can help you find the best deals in your price range. Their in-depth expertise in the real estate market will prevent you from stumbling upon options that aren’t viable and deal-breaker. To find out an ideal agent, you will have to do some legwork, which involves getting recommendations for colleagues and family members. Also, you can do some online drills to ascertain their credibility. The ideal realtor is good at all kinds of property dealings, even if you intend to sell a home fast in Michigan.
