Pat Leavy's Blog

Buying a home is a major decision. House hunting, mortgages, realtors, and inspections—all these sound scary to first-time homebuyers. However, if you know what to expect and look for in the process, then it does not have to be such a daunting task. This guide serves as a basis for all homebuyers from beginning the process to scoping out potential homes.

1) Check Your Credit and Decide on a Realistic Budget

If you have a low credit score, you may pay thousands of dollars more in interest than someone with a higher credit score who’s looking to buy a home in Walloon Lake MI. This is why, before you start the home buying process, you should check your credit score and decide what to do.

Make sure to use a FICO score, since that is what mostly every lender sees. If you need to work on your credit score, check your credit well before starting the homebuying process. It will buy you some time to boost your score.

It is possible to obtain a loan that requires you to pay a large percentage of your income. However, this is not a financially sound idea. You would be spending way too much if you selected such a large loan. Make sure any loan you take out leaves you money for other expenses.

2) Look Up Mortgage Options

There are several different types of mortgages available, so do a little research before making a decision. Conventional loans are the most common. They require a three percent to 20 percent down payment.

Some FHA loans have lower down payment requirements. VA loans are for qualifying former and current military personnel. USDA loans are popular among buyers in rural parts. Make sure to learn about every type of loan and choose the most appropriate one for your situation.

3) Organize Your Documentation

When applying for a mortgage, you'll need to submit a lot of information to the lender. By finding, organizing, and knowing your documents ahead of time, you can expedite the loan approval process.

Some items that the lender will ask for include:

• Income verification (W-2s, 1099s, recent paystubs)
• IDs (driver licenses, social security cards)
• Proof of financial standing (bank and brokerage statements from your accounts)

Different lenders require different information. Make sure to gather it early on and speed up this lengthy process.

4) Get a Pre-Approval

When you get a mortgage pre-approval, it is nearly the same thing as applying for a mortgage. The difference is that with a mortgage pre-approval, you have not yet found the specific house you are trying to buy.

A pre-approval is not an approval for a loan. The lender must check your credit, verify employment, and other relevant information. However, a pre-approval is a good sign for your application. It indicates to the seller that you are a serious buyer because you already have committed to seeking a loan.

5) Find an Agent and Look for Houses

You can buy a house without hiring a real estate agent, but it makes the process a lot harder. Your agent will do the research, draw up contracts, and manage other painstaking parts of the process for you. This leaves you more time and less hassle, whether you’re buying condos in Bay Harbor or waterfront homes in Burt Lake.

Good real estate agents will help you navigate the market and the entire process. Looking for homes is the fun part, so make a list of everything you want and your preferred locations and start searching!

Your Perfect Home

It is nearly impossible to buy a home in a day, so make sure to be patient throughout the process. Ensure your credit is good before starting the process and be smart with your loan. Stay organized throughout the home search and find a real estate agent to guide you through the process. You are sure to find your favorite home for sale in Petoskey or another area if you stay calm, organized, and serious during the property-searching period.