8 Big-time Buyer Mistakes #3

Hello real estate savvy readers,

The third Big-time Mistake to Avoid when buying property in Michigan is:

#3 - Failing to be financially pre-approved, and having an interest rate guarantee before looking at homes

This is more important today than it has ever been. Especially with the tumult in todayís residential lending market, you really need to know what monies are available before proceeding further down the path of buying a home.

Contact some local lenders, assess your current situation with them, learn about your options and what you can and want to afford. Do not be afraid to shop around, but avoid out-of-town (particularly Internet) sources of financing except as a very last resort. Choose the best local lender to work with and ask them for a Pre-Approval Letter and Good Faith Estimate before you begin searching for property in earnest.

You already have a financial relationship with your local bank or credit union ó thatís one place you can start. You can also reference TEAM MIKEís recommended lender list on our Web site for a list of local lenders that have done outstanding jobs for clients of ours in the past.

This process similarly will not cost you anything except 30 - 60 minutes of your time with each lender. You will need a recent pay stub, current yearís tax return or W-2 form, and recent monthsí statements from all of your asset accounts (checking, savings, IRA, securities, etc.).

This process doesnít sound as sexy as falling in love with a home and then trying to figure out if thereís any possible way to pay for it, but believe me, nothing is more frustrating and trying on relationships (personal and agent-client) than searching through properties beyond your financial capabilities and intentions, while all the choicest properties in your ìrealî area of interest are scooped up by more savvy client/agent teams who have already done their homework and are successfully purchasing the homes of their dreams.

Last Updated: November 10, 2007