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First-Time Home Buyer in 2022? | FAQs Answered by Your Michigan Bank

Posted on: February 24, 2022

Home_Buyer1Buying a house is one of life’s critical milestones. You’re making a significant financial investment that solidifies your independence and creates a sense of stability for you and your family. A home purchase is an exciting and challenging step, but you have support from your Michigan bank.

We talked with our banks in Ann Arbor, Detroit, Farmington Hills and Grand Rapids, MI, to answer frequently asked questions from first-time homebuyers. If you have a question you don’t see on this list, connect with the Level One Bank team. We’re here to help.

FAQs Answered by Your Michigan Bank

  1. Are there homes available for first-time buyers in Michigan? Yes! The real estate market across the nation and in Michigan is still a 'sellers-market', meaning there are more buyers than sellers. But at the time of writing this, Zillow.com lists almost 1,000 homes for sale in Detroit, roughly 200 in Ann Arbor, and about 100 each in the Farmington and Grand Rapids markets. With home inventory tight, buyers will face other people bidding on the same house. Patience, persistence, and partnership with the right mortgage lender are essential to success.
  2. Home_Buyer1What kind of financial support can I get as a first-time homebuyer? The U.S. government has several programs to support homeownership for first-time buyers. Federal Housing Administration (FHA) loans have a lower down payment and are available to qualified buyers with credit scores that may be less-than-stellar. If you’re a military veteran, you may be eligible for a VA loan that requires little to no down payment. Additionally, if you’re a first responder, teacher, nurse, or work for a non-profit or government organization, you could be eligible for Level One Bank’s Community One mortgage program that offers a lower down payment without private mortgage insurance (PMI).
  3. Can I get a mortgage if I have student loan debt? Yes! The team at Level One Bank recently offered guidance about managing your debt and building financial strength. Government-backed FHA and VA loans are available mortgage solutions. In addition, Level One Bank offers unique programs like the Community One Mortgage Program for first responders and teachers, Physician mortgage loans for medical residents and doctors, and the Welcome Home loan for buyers who need affordable housing based on income.
  4. How do I apply for down payment assistance (DPA)? The FHA offers grants to first-time homebuyers in Michigan. Level One Bank offers a Homeownership Opportunities Program (HOP) grant for first-time homebuyers. You can also use gifts from friends or family as a down payment with many mortgage programs. Check with the Level One Bank mortgage team to determine the types of DPA you can pursue.
  5. Does getting pre-qualified help me buy a home? Yes! Getting pre-qualified for a mortgage helps you, as the buyer, understand how much you can afford to spend on a house. The pre-qualification letter assures the seller that you have the financial strength to enter a contract with them.
  6. How does pre-approval differ from pre-qualification for a mortgage? Pre-qualification measures your creditworthiness as a buyer and includes an estimated amount you could borrow to purchase a house. The pre-approval process takes you through the complete mortgage application process and results in the lender providing a specific amount for a home purchase. Getting pre-approved lets sellers know that you're ready to head to the negotiating table!
  7. How much do I need to save for closing costs? Closing costs are the expenses or fees you need to pay to complete your home purchase. In Michigan, closing costs average between 2% and 4% of the home’s selling price. Check with your lender to get a more precise figure on the final amount.

Let's talk about your journey to your new home! Visit one of Level One Bank’s local branch offices to discuss your plans and find the right financial support to transform your dream of homeownership into a reality.

“You can’t have everything you want, but you can have the things that really matter to you.”
— Marissa Mayer, American Businesswoman

Posted in: Your Home, Your Money

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