Depending on which publications or websites the buyer may trust for information, there will be mixed opinions on where the Real Estate market is heading for the first time home buyer in Michigan. While there are still great deals to be had on homes for sale in Michigan, first time buyers are facing fierce competition from repeat buyers as well as investors.
In fact, for the past five years, the percentage of homes purchased by first time buyers has been steadily declining. Four years ago, first timers were responsible for more than 50% of the homes purchased whereas, today, they account for less than 35%. While this statistic is based on nationwide data, similar declines are represented in the Michigan housing market as well.
“Michigan Mortgage Solutions speaks with, and pre-approves, a lot of first time buyers and one of the most common issues they face is competition. With a lower inventory of homes for sale, it’s extremely important for the first time buyer to know where they stand so they can craft a solid offer. Getting pre-approved by a knowledgeable lender will put a first time home buyer in the best position possible to bid aggressively on their dream home” says Jason Nolan, President of Michigan Mortgage Solutions.
Since the average Michigan home offered for sale is usually under contract within the first two weeks of being listed, knowing what you can afford is imperative. This is why the first step in the home buying process should always be to get pre-approved.
A pre-approval letter is often needed prior to putting an offer on a home anyway, so starting there only makes sense. To complete the pre-approval process, the lender will review a borrower’s income, credit, and assets to determine which mortgage programs they are eligible for, how much home can they afford and also how much money they will need at close to cover down payment and costs.
Knowing the total costs prior to putting in an offer will allow the first time buyer to know their financial limits. If they determine they will be short money to close, they can request a seller’s concession to cover some if not all of the costs. In Michigan, the average purchase transaction has a seller’s concession of 2% of the loan amount which can be used to cover the buyers closing costs and pre-paid expenses.
A good mortgage lender should be able to break these costs down for the buyer prior to them offering on a property. However, some lenders take short cuts and use estimates which can be misleading and cause huge problems as the transaction proceeds. Make sure to question the lender on whether they are using estimates or real numbers for items like property taxes, tax pro-rations, title fees, and homeowners insurance since these will be the majority of the costs.
“Numbers are extremely important in a mortgage transaction and taking the time to dial things in as accurately as possible is imperative. Doing this allows buyers to know exactly what they are getting themselves into and what will be due at closing. This eliminates the nightmare closing scenarios you read about online” says Jason Nolan, President of Michigan Mortgage Solutions.
Michigan Mortgage Solutions is a licensed mortgage lender and broker specializing in first time home buyer programs in Michigan. They offer a wide range of mortgage products including conventional financing, FHA loans, and also 100% financing with the VA and USDA Rural Development Loans. Make sure to call 248 630-3489 for more info on getting qualified to purchase your first home.
Trevor Sines, Marketing Director, Michigan Mortgage Solutions, 248 630-3489, email@example.com
Visit http://michiganmortgagesolutions.com for more information.
Name: Trevor Sines
Organization: Michigan Mortgage Solutions
Phone: (248) 630-3489
Address: 91 N Saginaw St #206, Pontiac, MI 48342