Education & Guidance
Consumer Resources
Everything you need to make confident, informed decisions on your home buying journey — from first steps to closing day.
Home Buying Guide
Buying a home is one of the biggest financial decisions you'll ever make. These steps will help you navigate the process with confidence.
Check Your Credit Score
Your credit score directly impacts your mortgage rate. Aim for 620+ for conventional loans, 580+ for FHA. Request your free report at AnnualCreditReport.com.
Get Pre-Approved
A pre-approval letter shows sellers you're serious and tells you exactly how much home you can afford. Work with a lender before you start shopping.
Determine Your Budget
Factor in down payment, closing costs (2–5% of loan), moving expenses, and reserves. Your monthly payment should stay under 28% of gross income.
Find a Trusted Realtor
A buyer's agent represents your interests at no cost to you — their commission is paid by the seller. Interview at least two agents before choosing.
Shop for Homes
Create a must-have vs. nice-to-have list. Visit homes in person when possible. Consider resale value, neighborhood trends, and school districts.
Make an Offer
Your agent will help you craft a competitive offer. Include contingencies for inspection and financing to protect yourself.
Home Inspection
Never skip the inspection. A licensed inspector will identify issues that could cost thousands. Use findings to negotiate repairs or credits.
Close on Your Home
Review your Closing Disclosure 3 days before closing. Bring a cashier's check or wire funds for closing costs. Sign, get keys, celebrate!
Financial Planning
Understanding the financial side of homeownership helps you avoid surprises and build long-term wealth.
Down Payment Options
Conventional loans require as little as 3% down. FHA loans start at 3.5%. VA and USDA loans offer 0% down for eligible buyers. Down payment assistance programs may be available in your area.
Building Home Equity
Equity grows as you pay down your mortgage and as your home appreciates. You can tap equity through a HELOC or cash-out refinance for renovations or emergencies.
Understanding PMI
Private Mortgage Insurance is required when your down payment is less than 20%. It typically costs 0.5–1.5% of the loan annually. PMI can be removed once you reach 20% equity.
Closing Costs Breakdown
Expect to pay 2–5% of the purchase price in closing costs. This includes lender fees, title insurance, appraisal, prepaid taxes and insurance, and attorney fees.
Ongoing Homeownership Costs
Budget 1–2% of your home's value annually for maintenance and repairs. Don't forget property taxes, homeowner's insurance, HOA fees if applicable, and utilities.
When to Refinance
Refinancing makes sense when rates drop 0.75–1% below your current rate, when you want to shorten your loan term, or when you need to access equity. Factor in closing costs and break-even timeline.
Quick Mortgage Estimate
Monthly Payment
$1,707
Principal & Interest only
Loan Amount
$270,000
Total Interest
$344,370
Total Cost over 30 years
$614,370
Principal vs Interest
Homeownership Tips
Once you have the keys, these tips will help you protect your investment and enjoy your home.
Create a Home Maintenance Calendar
Schedule seasonal tasks: HVAC filter changes, gutter cleaning, roof inspection, caulking windows and doors. Preventive maintenance saves thousands in repairs.
Know Your Home Systems
Locate your main water shutoff, electrical panel, and gas shutoff. Know how to reset your GFCI outlets. Keep appliance manuals and warranties organized.
Review Your Insurance Annually
Make sure your coverage reflects your home's current replacement cost, not market value. Add riders for jewelry, electronics, or home office equipment if needed.
Homestead Exemption
Many states offer a homestead exemption that reduces your property tax bill. In Michigan, file with your local assessor's office by June 1 of the year you move in.
Track Home Improvements
Keep receipts for all capital improvements — they increase your cost basis and reduce capital gains taxes when you sell. This includes additions, new roof, HVAC, and kitchen remodels.
Make Extra Principal Payments
Even one extra mortgage payment per year can shave years off your loan and save tens of thousands in interest. Apply extra payments directly to principal.
Key Terms Glossary
Real estate and mortgage jargon can be confusing. Here are the most important terms explained in plain language.
- APR
- Annual Percentage Rate — the true cost of borrowing, including interest rate plus fees, expressed as a yearly rate. Always compare APRs, not just interest rates.
- Amortization
- The process of paying off your loan through regular payments over time. Early payments are mostly interest; later payments are mostly principal.
- Appraisal
- An independent assessment of a home's market value by a licensed appraiser. Required by lenders to ensure the home is worth the loan amount.
- Contingency
- A condition that must be met for the sale to proceed. Common contingencies include financing, inspection, and appraisal. Protects buyers from losing their earnest money.
- DTI Ratio
- Debt-to-Income Ratio — your monthly debt payments divided by gross monthly income. Most lenders prefer a DTI below 43%. Lower is better.
- Earnest Money
- A deposit (typically 1–3% of purchase price) made when your offer is accepted. Shows good faith. Applied to closing costs or returned if contingencies aren't met.
- Escrow
- A neutral third party that holds funds during the transaction. After closing, your lender may hold property taxes and insurance in an escrow account and pay them on your behalf.
- LTV Ratio
- Loan-to-Value Ratio — the loan amount divided by the home's appraised value. An LTV above 80% typically requires PMI. Lower LTV means better rates.
- Title Insurance
- Protects against claims on the property's ownership history. Lender's title insurance is required; owner's title insurance is optional but recommended.
- Underwriting
- The lender's process of verifying your income, assets, credit, and the property before approving your loan. This is why they ask for so many documents.
CFPB Home Buying Guide
Step-by-step guidance from the Consumer Financial Protection Bureau.
HUD Approved Housing Counselors
Free or low-cost housing counseling from HUD-approved agencies.
Michigan MSHDA Programs
Down payment assistance and first-time buyer programs in Michigan.
Freddie Mac Learning Center
Free homebuyer education courses and resources from Freddie Mac.
Fannie Mae HomeView
Free homeownership education course that satisfies lender requirements.
Annual Credit Report
Get your free credit reports from Equifax, Experian, and TransUnion.
Ready to Explore Your Loan Options?
Now that you know the basics, dive into the loan programs available to Michigan buyers.