Get Prequalified to Buy a Home in Northern Michigan
Before you start shopping for a home in northern Michigan, get prequalified or preapproved for a home loan by a lender. Even if you have a long-standing relationship with a certain bank, this can be a good time to shop around. We highly recommend working with a local lender. Local lenders are familiar with the local real estate market and often know your real estate agent because they are part of the same community. Getting prequalified for a loan means your lender has reviewed your credit to determine if you're likely to qualify for a mortgage when you officially apply.
Preapprovals require an in-depth look at your finances, and are regarded as serious proof of your ability to purchase a home. When you're preapproved, you receive a letter from the bank showing you are highly likely to be qualified for a mortgage for a certain amount. Then, you can share this letter with your realtor to show you are a serious buyer.
For a preapproval, you may need:
- A full month of paycheck stubs
- Two years’ federal tax returns
- Two months’ bank statements (be prepared to explain large deposits – it is a good idea to have documentation if you sold a vehicle or received a gift, etc.)
- At least 10% to put toward a down payment, sometimes 20%
- If you make income from tips or you're self-employed, you will typically need a two-year history of income.