Buy Your First Home—Even If You Don’t Know Where to Start!
Don’t be daunted by the leap into unknown waters! Buying a home for the first time may seem like an overwhelming process, especially when you have no idea where to start, but that's why we're here for you. Learn more about the process of obtaining a mortgage, finding the perfect home, and making an offer, and you’ll be on your way to owning your very own home in Southeastern Michigan!
Understanding Your Mortgage
First and foremost, let’s talk about mortgages. Most buyers need one, and there are a lot of options that vary greatly from lender to lender and from buyer to buyer. This means it’s important to understand what you’re looking for and talk to a lot of different lenders to ensure you’re getting the best deal possible.
Calculating Your Monthly Budget
Now that you know what loan options are available to you, what you can expect to pay as a down payment, and what your likely interest rates will be, it’s time to determine how much you can afford to pay every month, which will then be used to calculate the price range of your home.
Keep in mind that your mortgage costs will be based both on the price of the home and the CURRENT interest rates. A home’s affordability can vary from one day to the next based on the current rates.
Finding a Realtor in Southeast Michigan
You don’t have to work with an agent—but it is extremely recommended unless you are a highly experienced buyer or lawyer. Your agent should be someone you know you can trust, an expert on real estate in your area and neighborhood, and very proficient in working with buyers of your experience.
Shopping Homes for Sale in Southeast Michigan
Now it’s time for the fun part! You get to start shopping! This is where you get to decide exactly what you want and need in a home, from the type of house or townhouse to the location of the neighborhood to all the exciting interior and exterior amenities you just have to have! Make sure you keep detailed records of the homes you visit, noting things you liked, didn’t like, pros and cons, etc. Taking pictures can also help keep your memory fresh.
Tip: Before you start touring homes, determine the actual selling price of homes in your preferred neighborhoods—not just their listing price—to get a better idea of the actual affordability of the location.
Making an Offer
You found the perfect house, and now it’s time for your and your Realtor to sit down and discuss your offer. It’s important to work together to determine a price you can comfortably afford but will also be a realistic offer for the seller to accept and will not be dismissed against any competing offers the seller might receive.
What Will I Pay Upfront?
Earnest money: Think of this as your “security deposit”. It's paid when you submit your offer to show the seller that you are serious. When your offer is accepted, it is applied to your down payment or closing costs.
Down Payment: This is determined by your loan, or possibly any government programs or assistance you have requested.
Closing Costs: These are typically low for buyers and represent the fees associated with paperwork and lender charges.
Requesting a Home Inspection
If the seller accepts your offer, it’s time for a home inspection. Before you close, you’ll want to have an experienced professional walk the house to ensure that there aren’t any lingering problems or maintenance issues that might not be visible at first glance. You don’t want to be hit with a serious maintenance or structural issue right after you move in. If necessary, you can request that the seller repair any issues you find.
If everything looks good, it's time to sign the paperwork, make final negotiations and payments, and get your keys!
Reviewing Your Contract
Before you sign any paperwork, it’s important that you carefully read over the contract with your agent or lawyer to ensure there are contingencies—that is, if something falls through with your mortgage, you aren’t still obligated to buy the home.
Finalizing Your Mortgage Approval
Work with your chosen lender to submit your mortgage application, have your home appraised, and review predicted closing costs. There are many costs commonly associated with closing, including attorney fees, title insurance, appraisal fees, home inspection fees, courier fees, government recording fees, and taxes.
Paying, Closing & Getting Your Keys!
It’s time to close! Meet with your agent, lender, and the seller to finalize the paperwork, sign your contracts, and pay your down payment and closing costs. Finally—the keys to your new home!
Still Have Questions About Buying Your First Home in Southeastern Michigan?
I bet you do! Buying your first home is no simple process, and though we have tried to provide as many important details as possible, there's still much to ask and learn. So don't wait—contact us today and ask away!