Buying your first home is one of the biggest financial moves you'll ever make, and the process trips up first-time buyers constantly. This video covers exactly what to know before you make an offer: the tips that get you in the door, the tricks most agents will not tell you about, and the red flags that can cost you thousands. After 25 years and 8,000+ closed transactions across Metro Detroit's Oakland, Wayne, Macomb, Washtenaw, and Livingston counties, here's how to buy your first house with complete confidence and zero surprises.
📌 QUICK ANSWERS
❓ Pre-qualification vs pre-approval, what's the difference? Pre-qual is a phone conversation where you share numbers and nothing is verified. Pre-approval is a verified, written commitment where the lender pulls your tax records and checks your income and employment. That letter is what sellers treat like cash in hand.
❓ What credit score do I need? You can buy with a score as low as 580 on some loans, though 740+ unlocks the best rates. As of 2026, Fannie Mae dropped its old credit score minimum, and some lenders now weigh alternative credit like on-time rent, utilities, and phone payments.
❓ How much for a down payment? Depends on the loan. VA and USDA are zero down. Conventional starts at 3% for many first-time buyers. FHA is 3.5% with a 580+ credit score. On a $400,000 home, FHA's 3.5% is $14,000, and sellers can cover up to 6% of the price in closing costs.
❓ Do I qualify for a USDA loan? USDA requires zero down, and a surprising number of Metro Detroit communities qualify. Most of Livingston County, parts of Washtenaw, plus outer Oakland and northern Macomb spots like Clarkston, Highland, Milford, South Lyon, and Macomb Township are eligible. Check the USDA property eligibility map for any specific address.
❓ What's the biggest red flag in real estate right now? Wire fraud. An agent or lender should NEVER email you the wiring instructions. One of my buyers had their $200,000 wire intercepted because the lender's email was hacked. Always confirm wiring details by phone using a number you already trust.
❓ What is PMI and when does it go away? On a conventional loan, you can request removal at 20% equity and it falls off automatically at 22%. On most low-down-payment FHA loans, mortgage insurance lasts the life of the loan unless you refinance. That's why many FHA buyers eventually move to conventional.
❓ What if the appraisal comes in low? Three things can happen. The seller lowers the price (most common), you cover the gap in cash, or you walk away and get your earnest money deposit back through a mortgage denial.
❓ Do I need flood insurance? Only if the home is in a designated floodplain. About 12% of Metro Detroit homes sit in a FEMA 100-year or 500-year zone. If yours does, the lender will require flood insurance ($1,000-$8,000 per year). Check the FEMA flood map for the exact address before writing an offer.
Michael Perna Michigan Real Estate Agent | Michigan Real Estate License: 6501309650 Brokered by eXp Realty 📲 Call/Text Direct at (248) 221-2777 💻 Email: [email protected]
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🏡 The Perna Team serves all of Metro Detroit including Oakland, Wayne, Macomb, Washtenaw, and Livingston counties. From Novi, Birmingham, Bloomfield Hills, Royal Oak, Northville, Plymouth, Farmington Hills, Rochester Hills, and Troy to every community in between, we've helped over 8,000 buyers and sellers close with confidence and have over 3,000 five-star Google reviews to back it up.
