Things to Consider When Buying a Home
Things to Consider when Buying a Home
Most financial experts are saying it’s a good time to buy a home, provided you are going to live in the house for five years or more. If you are making a commitment to homeownership in Charlevoix, here are some things to consider.
Before you even start shopping, get prequalified with a lender. Even if you have a long-standing relationship with a certain bank, this can be a good time to shop around. While your own bank may be your best bet if you don’t get the results you want when you talk to their mortgage department, you still may have options. (Your Realtor may also be able to recommend lenders)
You will typically need:
- A full month of paycheck stubs
- Two years’ federal tax returns (be prepared to explain any deductions)
- 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%
Hold off on anything that would require someone to run a credit report on you, such as:
- Increasing limits on existing credit cards
- Shopping for a car
- Looking into life insurance
- Applying for a new credit card/canceling an existing card
Choose Local to Northern Michigan
We highly recommend working with a local lender. Lenders local to Charlevoix are familiar with the real estate market in the area and communicate much better with your real estate agent because they are tied to the community.
Benefits of choosing Pat O’Brien & Associates
When you work with a local realtor, we can help you through all the bumps that purchasing a home presents. We are aware of market values, which is helpful to maneuver potential appraisal pitfalls. Let’s say you have made an offer on a home, and the seller has accepted your offer. Now it’s time to have an appraisal – and there are a couple of potential snags. The appraiser may not be familiar with the local market and/or the appraisal may come in below the accepted offer. These are not necessarily deal-breakers, but you should be aware of all potential setbacks.
If the property you want needs third party approval (IE: a short sale), we will be here to provide extra support. It can often be a long process fraught with frustration, but if you have a good Realtor and keep your end goal in mind, it is often well worth the effort.
While inspections seem like another added expense, they are worth the investment. A licensed inspector will check the roof, wiring, plumbing, heating and cooling systems, insulation, well and septic looking for mold, etc. The average homebuyer is unqualified to identify associated problems. Building in a clause that has your home sale contingent upon inspection is a wise idea, and your Realtor should recommend it.
Having said that – an inspection is not a win/lose proposition. A buyer may elect to still purchase the home and may negotiate with the seller to make repairs or reduce the cost of the home. Or you may take advantage of the contingency clause, retain the earnest money deposit, and resume shopping.
We understand that buying a home in Northern Michigan can seem overwhelming and that's exactly why we are here to help. It's our job and we love it!