Becoming a home buyer is exciting. It can be one of the biggest assets you will purchase in a lifetime. There are many steps to go from wanting to become a home buyer to unlocking the door to your NEW home.
The first step to planning to become a homeowner, is knowing your credit. There are many resources for this that you can get copies of your credit, without having to pay or paying a small fee. Here are just a couple.
- Credit Karma
- Mortgage broker
- Your bank
When you get your credit report, you should review it for accuracy. Review all the debts currently reporting and those from the past. It is not just your current debts that determine your credit score, but the reporting history from the past. Common things that can cause a lower credit score or are errors on your report:
- Late payments
- Debt that is not yours
- Liens that are not yours
- Medical bills
- Things not reporting
If any of the items on the credit report are wrong, you have a few ways in which to dispute.
- Login to Experian, Equifax and Transunion and follow their dispute process. Provide any information you can to show that the information is incorrect and what it should be.
- Write a letter to Experian, Equifax and Transunion disputing the items. Again include any information that you can show to correct the information.
- Talk with the mortgage lender about getting some help correcting the issues. Many of them have programs in place to help. They want your business, so they have these tools to keep you with them.
If you do not have information as backup for your dispute, still dispute it. Do not let it sit on your credit incorrectly. It can take multiple times, but the higher you can get your credit, the cheaper your mortgage will be in regard to the interest rate.
The second part about getting ready to buy a home is to know what you can afford. You may already be working with a mortgage company with your credit report, so you are ahead of the game. Make sure you research your mortgage company and the person you are working with. You have all the tool at your fingertips. Do a google search, look on LinkedIn, and check out social media like Facebook and Instagram. You will want to be comfortable with whoever you work with as you will be with them for 30 -60 days. You can also ask friends and family if they have any suggestions, or a Realtor if you already know one. Realtors work with many lenders on a consistent basis. They should be able to give you 2 or 3 they trust.
The mortgage company will review a variety of documents to make sure you can get approved and close a mortgage. Some of these documents to gather up before getting together with your mortgage person are:
- 2 years tax returns – w-2’s or 1099’s as well
- 6 months of bank statements
- Last 2 months paystubs
- Other asset statements
- Contact information for the department that can do a verification of employment
If you prepare before meeting with your mortgage company, the quicker they can start processing your approval. Once you are approved the lender will provide an approval letter that you will give to your Realtor. This letter will have the amount you can get qualified for and some other information the Realtor will use when writing up your offer once you find a home.
Just a little information on the process after the offer is accepted – you will decide if you want a home inspection (always recommended) and the mortgage company will get an appraisal. Depending on the location of the property there may be other inspections required by the city or county.
The Realtor will be your access to the homes you would like to see. Choosing the right Realtor is as important as choosing the right mortgage company. You will be with them the duration of the process – which can be 30 – 60 days or longer depending on how fast you find the home you want to make an offer on.
To find a Realtor, you can ask the mortgage company. Much like Realtors know mortgage people, mortgage people know Realtors. Talk to a couple of them. You can also do your research in the same way you did the mortgage company online and social media. Personality matters when it comes to Realtors and mortgage companies. You want to feel comfortable with them on a personal level, as well as know they understand their industries and what it will take to get you the home you want.
When you finally pick out the Realtor you want to work with, your Realtor should ask you some questions to help start the home search process:
- Location, Location, Location – where do you want to live?
- You should have cities you prefer (the Realtor may suggest other areas as well)
- Think about how far this is from your work, your family, schools if you need them, shopping, and things you like to do.
- What type of home do you want?
- Do you want a ranch, 2 story, bungalow, etc.
- Do you prefer brick, vinyl, or some other exterior material?
- How many beds and bathrooms do you want?
- Do you want a finished basement?
- Do you want a fenced yard?
- Do you prefer neighborhoods or land?
- What other features and amenities do you want in your new home?
- Do you want to use your entire approval or is there a budget you want to stay in?
Talk openly about what you want and need in a home. Do not feel pressure from your Realtor to settle for what they are showing you. Most Realtors should be able to send you a phone app that you can do some of your own searching on. As a professional, I tell people not to put much effort into Zillow and other websites. These are just marketing sites. Use the tools the Realtor provides.
The Realtor should also set up AUTO emails that will show up each day with new homes that match your criteria. This will help narrow down what you like and do not like, so the Realtor can set up to show the homes that capture your attention.
One of the biggest things to make clear…..NEVER, NEVER, NEVER and I will say it again, NEVER feel rushed to choose a home and make an offer. See as many houses as you need to, until you know which one is right for you. Your Realtor works for you. Your Realtor is going to receive a good commission when your home closes. Your Realtor is NOT going to live in the home, YOU ARE.
Conclusion: Home buying is a process. It will be stressful, it will be fun, and in the end the home of your dreams will be yours. We hope this helps give you an overview of three of the major points of home buying and getting prepared. There are many more steps involved, some you will be part of, some are behind the scenes. We wish you the best of luck in your home buying journey. If you have any questions about real estate, please e-mail us at firstname.lastname@example.org or call 248-294-7850.
Scott Fader and Gary Brincat
Mitten Realty Group, LLC
Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success, and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.