By Amy Persyn
Saving money for a down payment can be a challenge, especially if you just saved up for a wedding. But there are many first time home buyer programs out there that can help low to moderate-income buyers become homeowners.
In Michigan, the Michigan State Housing Development Authority (MSHDA) offers down payment assistance with the Michigan Down Payment program. This includes that up to $10,000 can be used for a down payment, closing costs and applicable prepaid expenses. A minimum down payment could also be gifted from a family member. Income and loan amount limits may apply in certain areas unless the property is located in a targeted area. A minimum down payment of 1 percent of the purchase price and completion of a homebuyer education class is required.
WHAT NOT TO DO.
Don’t – Change jobs. Stable employment is a critical component of getting qualified.
Don’t – Take on any additional debt or make any major purchases. This will reduce the amount of a mortgage you could qualify for.
Don’t – Make any late payments on your obligations.
Don’t – Forget to check your credit. Order a free copy of your credit report.
Don’t – Carry high balances on your credit cards.
Don’t – Close a credit card. This could reduce your credit score because it erases part of your credit history.
Don’t – Co-sign a loan for someone else. That debt will be counted against you.
Don’t – Make large deposits into your bank account. Any large deposits will have to be explained and the source of funds will be required.
BE READY
Having all the right documents ready is important and will help to move the process along. Here is a list of the following documents to have when ready to apply for a mortgage.
Have – W2 forms for the previous two years, if you collect a paycheck. Plus at least two paycheck stubs. OR the last two years tax returns, if self-employed.
Have – Proof of any other income, such as tips, investment income, social security etc.
Have – A list of all assets including bank accounts, mutual funds, brokerage accounts, etc., and the last two statements for all accounts.
Have – A meeting with your mortgage professional before signing a purchase agreement.
Amy Persyn, Chief Marketing Officer at First State Bank, is a lifelong Macomb County resident. She is passionate about connecting families and entrepreneurs with information that can help them become empowered and financially literate.
