As a first time buyer, it's incredibly important for you to understand how the home buying process works. You'll also need to become familiar with your financing options to determine which program is best for your first purchase. Regardless of your credit score, a good lender will be able to thoroughly explain your options first and then help you choose the program that best suits your specific home buying needs.
First Time Buying a Home in Michigan? Consider this...
Buying your first house can be very exciting but it can also turn into a nightmare within an instant. The main catalyst for this nightmare scenario is not getting an accurate estimate on the costs associated with the financing.
Most programs will require some form of down payment. However, some first time buyer programs provide assistance for buyers using grants. Even if a deposit isn't required, you will still have fees associated with the transaction. Depending on the property and the time it is purchased, these fees can total thousands of dollars.
Unfortunately, a lot of lenders use estimates for common costs like property taxes, homeowners insurance, and tax prorations. These estimates can be off by thousands and can cause two potential problem scenarios.
The first being if the lender estimates these too high and you don't have enough verified funds to close. This will cause issues with your time line and potentially get you a denial letter. This may prevent you from buying the home you want for no good reason other then the broker being lazy and using estimates to do bad math.
The second scenario is if the broker estimates too low causing you to bring more money to close than you anticipated. This scenario is more common and can really make things hard on a first time buyer.
The worst part about this second scenario is that it happens at the worst time for the buyer. You don't really find out if your lender used estimates until maybe a week before closing. Imagine finding out four days prior to buying your home that you need an additional $1,000 or $2,000 dollars to close. This causes a lot of unnecessary stress about where this extra money will come and forces the buyer to wonder why it wasn't disclosed before.
Both of these home buyer scenarios can be avoided by working with, and getting pre-approved by, a good reputable company. Fortunately, if you're reading this, you've found one in Michigan Mortgage Solutions as we've been providing help for home buyers in Michigan since 1998.