Michigan Mortgage Rates | Compare today’s rates

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Buying a home in Michigan can save you a substantial amount of money compared to the average US buyer. Since July, the state average sale price of $273,661 was significantly lower than the national average of $520,500.

Keep in mind that these are just averages and home prices can change drastically depending on location. For example, the Emmett Association of Realtors on the northern end of the Lower Peninsula reported an average sale price of $552,945 for the month of July, while the Detroit Board of Realtors reported an average of $118. $798.

No matter where you decide to buy a home, you may be able to afford more than you think. Choosing the right mortgage or taking advantage of available down payment and closing cost assistance programs can help you get the most out of your budget.

What are today’s mortgage rates in Michigan?

For Tuesday, September 13, 2022, here are the current mortgage rates in Michigan. The average 30-year fixed mortgage rate is 6.160%. The average 30-year fixed mortgage refinance rate is 6.130%. Today, the average 15-year fixed mortgage rate is 5.480%.

When it comes to variable rate loans, the average 5/1 variable rate mortgage (ARM) rate is 4.630%.

This information comes from Bankrate’s latest survey of the nation’s largest mortgage lenders.

Current Mortgage Rates in Michigan

Type of loan Assess
Fixed 30 years 6.160%
Fixed 15 years 5.480%
ARM 5/1 4.630%
30 year refi 6.130%

How much mortgage do you need to buy a house in Michigan

The amount you’ll need for a down payment largely depends on the type of loan you choose. Some mortgages, such as VA loans, may require no down payment, while other types of home loans may require up to 20%.

Conventional loans allow as little as 3% for a down payment, although 20% is required to avoid the additional monthly expense of private mortgage insurance. FHA loans require a slightly higher down payment of 3.5%, but can be a good option if you can’t get approved for a conventional loan.

If you have enough cash, you can opt for a larger down payment to reduce your monthly payments. However, you’ll need to consider your personal circumstances and goals to determine if you’re comfortable parting with that money in exchange for a lower mortgage payment.

Subway station Median house price 3.5% ten% 20%
Detroit $224,300 $7,850.50 $22,430 $44,860
Great Rapids $276,700 $9,684.50 $27,670 $55,340
Lansing $187,100 $6,548.50 $18,710 $37,420
Ann Arbor $340,500 $11,917.50 $34,050 $68,100
Source: National Association of Realtors data for the first quarter of 2022

Types of Home Loans Available in Michigan

It’s important to weigh the pros and cons of different lenders and loan programs to make sure you’re making the best financial decision, says Dina Maweather, realtor at Keller Williams. “While many buyers believe that seeking the lowest possible interest rate is the best way to research a mortgage, the type and terms of the loan you choose can often save you the most money.”

Common loans available in Michigan include conventional loans, FHA loans, and VA loans. As well as having a combination of different rates and fees, you can also choose the length of your loan and whether you want a fixed or variable rate mortgage, so it’s a good idea to consider multiple mortgage lenders before deciding. make a final decision. .

Conventional

Conventional loans are a popular choice for many borrowers, as these types of mortgages can offer very competitive interest rates. It is possible to qualify with only a 3% down payment, a credit score of at least 620 and a debt ratio below 45%. However, many lenders use an automated system to assess your loan as a whole, so you may not qualify even if you meet these conditions.

While conventional loans may only require a 3% down payment, 20% is necessary if you wish to avoid the additional monthly expense of private mortgage insurance (PMI). However, if you are unable to provide a 20% down payment up front, be aware that you can ask your lender to get rid of the PMI at a later date once you have 20% net worth. in the House.

FHA

If you don’t qualify for a conventional loan, consider considering an FHA loan. FHA loans are insured by the Federal Housing Administration and offer more flexibility on things like credit score and debt-to-income requirements. If you can get a 3.5% down payment, you can qualify for a credit score of 580. But with a 10% down payment, you can qualify for an FHA loan with a credit score as low as 500.

If you’re considering an FHA loan because of issues that qualify for a conventional mortgage, be aware that these types of loans can be more expensive. FHA loans require upfront mortgage insurance in addition to monthly mortgage insurance premiums, and removing mortgage insurance from an FHA loan can be more difficult than removing it from a conventional loan.

Virginia

Insured by the Department of Veterans Affairs, VA loans are generally only available to borrowers with qualifying military service. However, those who qualify can use a VA loan to move into a home with no down payment and no monthly mortgage insurance requirement.

When it comes to qualifying for a VA loan, lenders may each have their own requirements when it comes to things like debt-to-income ratio and credit scores. So if you’re turned down for a VA loan, it’s worth trying another lender who might have more flexible criteria.

Michigan Homeownership Programs

When deciding how much home you can afford, don’t forget to look into homeownership programs. Several of these programs exist for the state of Michigan and can provide you with the funds needed to cover down payment requirements or closing costs.

  • MI home loan: Offered by the MI State Housing Development Authority (MSHDA), first-time homebuyers and repeat buyers can work with a participating lender to take advantage of this program. A minimum credit score of 640 is required and household income limits apply based on family size and property location.
  • MI DPA loan: MSHDA also offers programs that provide down payment assistance up to $10,000. Borrowers must complete an approved housing education course to be eligible.
  • Home Ownership Assistance Fund: Available to those located in Grand Rapids, the Homebuyer Relief Fund provides up to $7,500 to cover down payment requirements, closing costs and prepaid expenses. You must meet income and asset limits, not have owned a home in the past three years, and agree to occupy the property for at least five years.
  • Mortgage credit certificate: A Mortgage Credit Certificate (MCC) can provide a federal tax credit, minimizing your total outgoings. Household income limits apply, but if you qualify, you can get a credit of 20% of your annual mortgage interest paid against your year-end tax liability.

Pro tip

First-time homebuyer assistance programs can help you keep more money in your pocket by covering closing costs, down payment requirements and even reducing your year-end taxes.

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