3 Things Michigan Home Shoppers Should do First
Deidre Davis, MSU Federal Credit Union’s Chief Marketing Officer, says you should take a hard look at your finances before even surfing over to Realtor.com.
“The excitement and emotions of house hunting can make you forget about the math,” says Deidre.
I did not do the math and had all the stars in my eyes for a nice Heritage Hill beauty in Grand Rapids. A sweet little fixer upper. It was a big let down when my paycheck said, “You can buy a fifth of that house.”
Here’s how to get your ducks in a row for house shopping:
1) Determine How Much House You Can Afford
Buying a house is one of the most important financial decisions you will make,” says Deidre. “It’s important to have your budget in order to know exactly how much house you can afford – before you start looking.”
Take into account a few primary items, such as your household income, monthly debts (car loan, student loan payments) and other payments (gym memberships, subscriptions) and the amount of available savings for a down payment.
“A good rule of thumb is to keep your mortgage payment, including taxes and insurance, below 28% of your take-home pay,” advises Deidre.
Quick, do the math: what’s your maximum monthly payment?
If you’re looking to buy a home, I think this is the number one thing to keep in mind.
2) Make Sure Your Credit Score is Solid
“Having a higher credit score will typically mean that you will receive a lower interest rate from potential lenders, saving you money,” explains Deidre.
Good credit scores are usually 700 or higher; 800 or higher is excellent.
Ways to Improve your Credit Score:
- Pay all bills on time
- Reduce debt
- Do not open more credit cards, other loans or lines of credit unless absolutely necessary.
- Do not close existing credit cards. (This seems counterintuitive, but it’s true.)
- Review your credit report from one of the three national credit bureaus — Equifax, Experian and TransUnion — about four months apart so you can regularly review your report, and quickly identify any discrepancies or identity theft and report it.
Consumers can access free credit reports once a year from each of the three credit bureaus by going to AnnualCreditReport.com.
3) Save Time by Applying for Your Mortgage via the MSUFCU Mobile App
In our fast paced world, it’s really nice to be able to apply for a mortgage anytime, night or day. It is fast, easy, secure, and available when you are. Apply for your new mortgage with just a few taps of your finger.
On the MSUFCU Mobile app, log in, tap the icon in the upper left corner, then tap Apply for a Mortgage.
You can talk to a real person anytime, but updates are sent via email, making it easy to receive information any time of day.
Once you apply for a home loan via the MSUFCU Mobile app, a mortgage loan officer will review the application and reach out to you within one to three business days. While not needed at the time of application, certain income verification documents, such as pay stubs, will be needed and requested by the loan officer.
Depending on an applicant’s qualifications, they may be pre-approved at that time or after the loan officer reviews the application.
The approval timeline will vary depending on the applicant’s qualifications and documentation needed, but many applicants are pre-approved within a few days of application. Once the loan is approved, the applicant will receive approval information via email.