Tips on How to Buy Your First Home

You're in the market for your first house. It's so exciting but also really daunting. If you're feeling lost, check out this expert advice on how to buy your first home.

Woman hugging man in front of card boxes while holding keys

Getting ready to purchase your first home is quite the milestone. It can be an exciting, stressful and rewarding time for everyone in the family. But where do you start? In our current market, homes are selling fast but that doesn’t mean you and your family need to be in a rush. Here are a few tips that will help you along the way.

Do your research

Doing a little bit of homework before making a decision to purchase a home will help you feel prepared when the process is underway. Before you download all those home buying apps, take the time to make sure you have what you need.

  • Check your credit score. You can receive a free credit report three times a year. This will help determine what you can afford when getting pre-approved for a mortgage.
  • Create a budget. Write out what you spend each month so you can determine how much house you can buy. Don’t forget to include potential home expenses. This can include gas and electrical as well as home repairs.
  • Talk with multiple lenders and get pre-approved. Ciera Carter, realtor for New Michigan Realty in Troy, says, “The very first thing I tell clients that are ready to buy a home is to do their research and get pre-approved. It’s very important to know what type of loan you’re approved for and how much before going to see homes to give you a realistic perspective of what you can afford. It will save you a lot of time!”

Utilize resources

There are a lot of costs that go into purchasing a house as well as different types of loans that you might qualify for. Luckily, there are programs in Michigan that might help you. The Michigan State Housing Development Authority (MSHDA) has implemented these programs to give individuals and families the opportunity to own a home.

“I’ve had clients find programs that assist first time homebuyers with their closing costs but you see if you qualify. Start by speaking with your local bank, credit union or lender and weigh the pros and cons,” explains Carter.

A few of these programs include the MI Home Loan, which may allow you to receive up to $7,500 towards a down payment. This program requires the borrower to have a 640 credit score or better.

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For the Mortgage Credit Certificate program, first time homebuyers can receive a federal tax credit. The home must not exceed $224,500 and family household income requirements may vary.

The MSHDA down payment assistance program allows you to borrow up to $7,500 or 4 percent of the purchase price of the home (whichever is less). The catch with this one is that you must pay this loan back before you sell or refinance your house, but monthly payments are not required to do so. In order to qualify for this loan, you must go through a MSHDA approved lender and have to take an educational class.

If you are interested in any of these programs or need more information, your lender can help you navigate through the details and figure out what works best for you and your family.

Figure out what you want

After you’ve covered the basics of what you need to get the process started, you are ready to start your search. Do you want to live in a three-bedroom, two-bathroom home with hardwood floors and a finished basement? What area do you want to live in? What school district would you like your kids to go to? These are all things that need to be considered when purchasing a house.

Checking out homes online or on your phone can be a fun way to visualize where you want to settle.

Don’t forget to make your list of non-negotiables. This can include things like a garage, a deck, updated appliances, a new roof, and so on.

Find a realtor that is also knowledgeable on the type of loan you are approved, the area you’re looking in, and for or any programs that you have qualified for.

“It’s really exciting helping families who are buying their first home through the process and educating them every step of the way,” Cater says. “It’s so rewarding when we finally reach the end and I hand over the keys to their new home. Their energy and the smile on their face reminds me of why I love being a real estate agent and helping others find their dream home.”

Do you have any tips for first-time homebuyers? Drop them in the comments. 

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