Michiganders have been spending a lot of time at home lately. Whether it’s working from home or just trying to social distance, this leaves renters a lot of time to evaluate their surroundings and perhaps even putting a plan together to buy a home.
As an Oakland County home lender I’ve consulted with many first time homebuyers and have seen the things that are often overlooked. I’ve put together a brief checklist to help the new homebuyer know where to start and what they can expect throughout their pursuit of homeownership.
Get Savings and Credit in Order
- Check your credit: Your credit score is one gauge of your financial health and your lender will use this information to see how you have repaid previous debts. The minimum credit score needed will depend on the type of loan you are applying for. Michigan FHA loans can help borrowers with less than perfect credit while the minimum credit score for conventional loans is typically higher.
- Evaluate Your Income: Look at your income and bills to see if more money is coming in than going out. In addition to your credit score, lenders consider your Debt to Income Ratio (DTI) to be an indication of your financial picture and your ability to repay a loan.
- Increase Savings: If you haven’t already, set up Direct Deposit to automatically take part of your paycheck and put it into a savings account. Think of it just like any other bill.
Plan for Your Mortgage Application
- Prepare Documents: After you’ve evaluated your income, debts and have been contributing to a savings account, gather the documents needed that prove your earnings, savings, and current debt. This will help your lender identify your DTI we mentioned earlier.
- Talk with an Oakland County Lender: Consult a with a local mortgage expert to review loan options. A professional lender can also assist with determining what documents you might still need, or give direction on what debt needs to be paid off, if any.
- Calculate your Down Payment: After you’ve been pre-approved for a certain amount, use our mortgage calculator so you have an idea of how much you should put down and what your monthly payment will be. Also, consult with your mortgage lender about the different down payment options and the pros and cons of each for your specific situation.
Consider All Costs
- Real Estate Agent: Hire a real estate agent despite the cost — the agent looks out for your best interest and can be the difference between you winning or losing an offer.
- Home Inspector: You won’t want to skip this step when you’re making one of the biggest investments in your life.
- Other Costs You May Not Have Thought of: Determine final costs like movers, loan closing fees, tax, HOA fees, and insurance. Also, you may need to purchase furniture, appliances, and other move in essentials.
Continue Reading:
Improving and Maintaining Your Credit Score for a Michigan Home Loan
Michigan First Time Homebuyer Guide: Programs and Acronyms You Need to Know
Contact Oakland County Home Lender, Julie Krumholz
With 35 years of industry experience, Julie Krumholz has worked in nearly all aspects of mortgage banking.
Throughout the years she has worked in processing, closing and loan origination, underwriting, QC auditing and has even co-owned a mortgage brokerage firm.
If you are looking for an experienced Oakland County home lender, call Julie from Superior National Bank today at: 586-382-5482 and let her help you navigate through the loan process and answer any questions you may have.