Written By Jason West – Loan Officer in Evergreen
For most people, making the decision to purchase a home can seem like a monumental endeavor. Who should I use for a realtor? What price point? Where to buy? How are the schools? When..?
If your when is in the near future, the prospect of purchasing a home may seem even loftier. With rising interest rates and limited inventory spurring increased competition, buyers are understandably discouraged. To help, we’ve outlined a few basic principles that will serve you well in homebuying process, no matter the environment.
Interview Your Homebuying Team
Ask friends or colleagues for Realtor and Loan Officer referrals. Talk to several real estate agents and mortgage loan professionals, making sure to clearly state your goals and ask direct questions. Being direct ensures they have the experience and expertise required to meet your needs. Because buying a home is one of the largest purchases of your life, you should feel comfortable with each aspect of your homebuying team and the information they provide.
Get a Lender Pre-Approval
Pre-approvals and pre-qualifications may seem interchangeable, but there is a key difference. Unlike pre-qualifications, pre-approvals involve a more extensive verification process. Pre-qualifications rely solely on self-reported information while pre-approvals require lenders to verify your financial profile, including credit score, employment history, and financial documentation (pay stubs, bank statements, and tax returns). To ensure you’re shopping for a home that you can finance, obtain a bona fide pre-approval letter.
Be Diligent and Committed
When the realtor or loan officer asks you for documentation or needs you to take action, do it as soon as possible. The loan process typically takes 30-45 days, so it is important to stay on top of the loan process each day. If you miss deadlines for providing paperwork, contract contingencies, or rate locks, it will end up costing money and even possibly losing the deal.
Don’t Chase... Replace
When you finally throw your hat in the ring by making an offer, don’t get discouraged if you are getting outbid. Be prudent and stick to your best offer. If a bidding war is imminent, it’s okay to retreat and regroup. There will be another home out there that may better suit your wants and needs. No home is worth putting yourself in financial jeopardy.
Think Outside the Box
While demand is still higher than supply, be flexible and don’t become married to your plan. Be willing to make reasonable concessions if a home doesn’t check all your boxes. Be resourceful by asking your Loan Officer and Realtors for new trends or ideas and tricks that other people are using.
While there is no secret process to the homebuying experience, there are ways to make the process easier by hiring the right team, coming up with a plan, and being patient. These tips will give you a greater chance of getting the home you want, despite the market.
Want to learn more? Connect with a Michigan First Mortgage Loan Officer today.