Securing a residential property can be a daunting affair for first-timers. After all, there are various processes, requirements, and tasks, and you may be afraid of committing a costly error. But first-time home buyers in Michigan have access to several incentives created to motivate consumers into the real estate market. The legwork required to buy a house could be unprecedented for first-timers. Therefore, it is better to ascertain underlying legalities around home-buying. This will help you avoid legal complications in different stages of the home-buying process.
Qualifications of First-Time Home Buyers
A first-timer, as per the HUD i.e. Department of Housing and Urban Development, refers to an individual who fulfills any of the given conditions:
- A person who doesn’t own property within three years before purchasing a residence. If you have a residence, but your wife has not, you can collectively buy a property as a first-time homebuyer
- A single parent having a residential property with a former spouse while married,
- A displaced homemaker has a residential property with a spouse.
- A person has a principal property that lacks a permanent foundation as per the applicable norms.
- A person who possesses a residential property that was not in conformity with the model building codes -and that cannot comply with the said codes for less than the valuation of constructing a permanent residence.
Mortgage Approval for first-time home buyers in Michigan
Don’t be too impressed by the authenticity of your current lender when searching for a mortgage or seeking a pre-approval. Try performing more searches, even if only one type of loan is available to you. Processing charges can be varied significantly. For instance, an FHA loan may have varied charges based on whether you are applying for a loan via a credit union, a local bank, a large bank, a mortgage banker, or a mortgage broker. Mortgage interest rates have a significant impact on the overall valuation that you pay for your house- can also differ.
Once you have chosen an ideal lender and applied, the lender will conduct an in-depth check of the financial details provided. After successful inspection, the lender can grant pre-approval for a certain amount. It’s noteworthy that the pre-approval doesn’t always ensure the grant loan-especially in case of an altered credit score. Therefore, keep your credit score intact no matter what till the grant of the loan.
Role of a backup lender for first-time home buyers in Michigan
Some government institutions also suggest buyers have a backup lender. Being qualified for a loan does not give a surety that the requested credit will be transferred to your account. The factors like altered underwriting norms, lender risk analysis, and compromised investor market can lessen the chances of loan approval. And since it is not uncommon to have last-minute loan rejections, it does make sense to leverage backup lenders just to play safe.
Significance of real-estate agents for first-timers
The real estate agent will assist you to discover how much funds you wish to offer to buy a house, along with the terms you intend to ask for. After this, the agent will put forth an offer to the agent of the seller. The seller will either accept or make a counter offer. The process will continue to remain in process till the parties reach a concrete decision.
After furnishing your offer, recheck your budget. This time, consider factors like projected closing costs, commuting expenses, repair costs, etc. Plan wisely; there is no way you can skip unexpected or hidden expenses-especially if you are moving from a rental home to a larger property.
