Buying a home is exciting, but it can also be a little – or a lot – overwhelming.
You probably have questions like: What should I look for in a new home? How much can I afford? How am I going to coordinate the sale of my current home with the purchase of a new one?
At Mitten Made Properties, we’ve been working with homeowners in Metro Detroit for a long time, and we’ve learned a few tips and tricks to help take the guesswork out of the process. Here goes!
Save Up for a Down Payment
Getting a home loan will require a decent chunk of money as a down payment. Although lenders will sometimes approve mortgages requiring as low as 3% upfront cash, the bigger the down payment, the less your monthly mortgage payments will be. Aim for about 20% of the cost of the home – this greatly increases your chances of being approved for a mortgage and at a lower rate.
Calculate Monthly Mortgage Payment
It’s important to know how much the mortgage payment is going to be before making a commitment. Finding out is super easy! Just Google search for “Mortgage calculator,” enter the price of the home, your down payment amount, and potential interest rate, and let the internet do the rest. These calculators are great for showing you how down payment amount affects your monthly mortgage cost.
Check Your Credit
Getting a loan on a home will require at least decent credit. Conventional loans typically require at least a 620. If you have less-than-great credit, you may be able to repair it by taking a break from credit cards and handling any outstanding debts you may have in collections – many collections agencies will let you negotiate a lower dollar amount to clear it from reports. A lower credit score may not preclude you from getting a mortgage, but it can drastically affect your interest rate and your bottom-line price over the life of the loan.
Coordinate the Home Sale
If you currently own a home, of course you will also need to sell it. It’s a good idea to coordinate this with a real estate agent to make sure that your old home sale and your new home buy close around the same time. Otherwise, you can end up moving twice – once into a temporary living space and storage units, and again when you finally get the keys to your new home.
Mitten Made Properties offers a simple way to solve this. We can buy your old home quickly for cash in as little as two weeks and on your ideal closing date, freeing you up to plan your new home closing with no logistical worries. Give us a call at (248) 883-3340 to find out more about our process and how we can help.