Making Your Dream Home a Reality in Metro Detroit

By Nash Arabo

Michigan Area Lending Manager for Bank of America

If you find yourself daydreaming about your ideal space or shopping online for a home, you’re not alone. Bank of America’s Homebuyer Insights found that nine-in-ten buyers (89%) are motivated to buy a home and are looking at real estate listings (49%) and touring homes virtually (29%).

While a lot has changed over the last few months, over four-in-five (85%) prospective homebuyers said saving for a home remains a priority. Although everyone has their own homeownership timeline, it’s always a good time to take the first steps toward preparing to be a homeowner.

Some would-be buyers self-select out of homeownership, assuming they can’t afford a monthly mortgage payment or the upfront costs. Others simply don’t know where to start. To help future buyers better understand what’s possible, we’re debunking some of the most common misconceptions:

Myth: There is a right time to buy

First-time homebuyers in Metro Detroit may be holding off for the “right time,” but there is no such thing because homebuying is such a personal decision. While there is no secret formula to assessing emotional and financial readiness, answering a few questions can help you determine how close you are to becoming a homeowner and equip you with the resources you need to move forward with your homebuying goals. After all, the more informed you are about the homebuying process, the better prepared you are to find the best options.

Additionally, as you’re likely binge-watching more TV right now, switch your lineup and include some productive programming about homebuying. Bank of America’s First-Time Homebuyer Online Edu-Series provides an easy-to-understand roadmap to buying a home and allows you to go at your own pace as experts provide guidance and tips to prepare your finances, make an offer, apply for a mortgage and more.

Myth: I need to have a 20 percent down payment

Many mistakenly believe you need a 20 percent down payment when, in reality, the median amount was 6 percent for first-time buyers in 2019. Still, 71% of prospective homebuyers believe they will need assistance to save for a down payment. Luckily, there are lots of solutions to help prospective buyers overcome this hurdle. For example, Bank of America offers innovative low down payment mortgages, as well as down payment and closing cost grants, to help creditworthy borrowers in Metro Detroit who are struggling to save for a home.

Myth: Find a place you want before applying for a loan

A common misstep is window shopping for houses before understanding how much you can afford. While 44% of prospective homebuyers will apply for mortgage preapproval, more than half (56%) don’t think it’s necessary or don’t know what loan preapproval is. Prequalification can help you set realistic expectations when it comes to buying a house by providing an estimate of how much you could afford. Taking it a step further, you can request preapproval by providing more extensive information, which your lender will confirm. You’ll then receive conditional approval for the loan type and amount you qualify for and can begin your house hunt with confidence.

Some people avoid prequalification and preapproval out of fear they won’t measure up, but it’s important to know where you stand – and easier than ever to find out. Interactive digital tools allow prospective homebuyers to answer questions online or via their mobile banking app and get their prequalification or preapproval quickly.

Purchasing a home is a major decision, and it’s never too early to start building wealth while you enjoy the benefits of a home of your own. As a homeowner, you learn savings discipline, enjoy tax benefits and are protected from rising rental rates. This, combined with home values that historically appreciate over time, often leads to increased wealth for homeowners. That can mean building equity for future uses like college tuition or even retirement.

While homebuying may feel overwhelming, taking the first steps can help you understand your readiness for homeownership and ensure that you’re planning is on track. If you’re close to buying, a specialist can also review assistance programs you may be eligible for. With a little bit of guidance, the house of your dreams is within your reach.