Your First Home in Michigan: From Dreaming to Closing

Before you look at a single listing, get clear on what you can save, what you earn, and what you spend. Buying a home costs more than the down payment: there are closing costs, prepaid items like insurance and property-tax escrow, moving costs, and the repairs every home eventually needs.

A few months of steady saving and organized paperwork make every later step easier, and they help a lender see a clear, documented picture of your finances.

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Your credit history and your debt-to-income ratio (DTI) are two of the biggest factors in what you can borrow. DTI is your total monthly debt payments, including the new house payment, divided by your gross (pre-tax) monthly income.

Here is the key idea: the amount a lender may approve is not the same as the payment that feels comfortable. Build your budget around the full monthly payment (principal, interest, property taxes, homeowners insurance, mortgage insurance, and any HOA dues), measured against your take-home pay.

See the price vs. payment example →

You may not need 20% down. Depending on the loan type and your eligibility, conventional loans can allow as little as 3% down, FHA loans 3.5%, and VA and USDA loans may require no down payment. You can also ask about down-payment assistance options that may be available; eligibility varies.

Lower down payments usually mean mortgage insurance and a larger loan, so compare both the cash you need up front and the monthly payment.

Compare down payment options → Down payment & closing costs, with a cash-to-close calculator → Compare loan programs side by side → Run the mortgage calculators →

A preapproval means a loan officer has reviewed your credit, income, assets, and debts and believes you can likely qualify for a certain loan amount, subject to final underwriting. It is much stronger than a quick prequalification based on numbers you provide.

A preapproval letter shows sellers and Realtors that you are a serious buyer, and it tells you the maximum you might borrow. That maximum is a ceiling, not a target.

Get preapproved: what to expect → Book a preapproval conversation →

A buyer's agent helps you find homes, understand local values, write competitive offers, and manage deadlines through closing. Look for someone who knows the communities you're considering and communicates the way you like.

Expect to sign a written agreement with your agent before touring homes. Read it carefully so you understand the services and how your agent will be paid.

For Realtors: partner resources →

Now the fun part. Tour homes with your budget and priorities in front of you, and estimate the full monthly cost of each home, not just the list price.

In Michigan, the seller's current property tax bill can be much lower than what you will pay after you buy, because taxable value "uncaps" the year after a sale. Estimate your own future taxes for every home you're serious about.

Estimate Michigan property taxes →

Your Realtor will help you choose an offer price based on recent comparable sales, and decide on earnest money, contingencies (such as inspection, appraisal, and financing), the closing date, and whether to ask the seller for help with closing costs.

Once the seller accepts, the clock starts. Inspection and other deadlines move quickly, so have your inspector and insurance agent ready.

Guide: Seller concessions explained →

Underwriting is where the lender verifies everything: income, assets, credit, the appraisal, and title. You may receive "conditions": requests for updated documents or explanations. Fast, complete responses help keep your closing on schedule.

This is also when you'll choose homeowners insurance and the appraisal confirms the home's value for the loan.

Lenders are required to provide your Closing Disclosure three business days before your scheduled closing. Compare it line by line with your Loan Estimate and ask about anything that changed.

Wire fraud is a real risk. Criminals send fake wiring instructions by email. Always verify instructions by phone using a number you already know is legitimate, never one from the email.

Offer accepted: what happens before you get your keys →

Congratulations! A few Michigan-specific steps after closing protect you from paying more in property taxes than you should.

File a Property Transfer Affidavit (Form 2766) with your city or township assessor within 45 days, and file a Principal Residence Exemption (PRE) Affidavit (Form 2368) so your home is exempt from up to 18 mills of local school operating taxes. Ask your title company whether they will file either form for you.

What's your home worth? →