Michigan Mortgage Rates

April 26, 2015 08:16 PM Eastern

Refinance rates now in DETROIT, MI [Change this]

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Home Price (Purchase)
When you get a mortgage to purchase a home, the lender uses the lower of the agreed-upon purchase price or the property's appraised value to determine your maximum loan amount. The loan amount divided by the property home price equals your loan-to-value ratio, or LTV. That ratio is one of the major factors that lenders use to set your mortgage rate. If your LTV exceeds 80 percent, you'll probably be required to pay mortgage insurance, which increases your monthly payment. If the property appraises for less than the agreed-on purchase price, you are not usually required to complete the purchase.
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Home Value (Refinance)
This is your estimate of the current value of your property. When you refinance, your home is almost always evaluated by a licensed appraiser. The refinance loan amount divided by the property's appraised value equals your loan-to-value ratio (LTV), and that number is one of the major factors that determine your mortgage rate. To get an accurate refinance rate quote, your home value estimate must be reasonably accurate.
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Down Payment
The down payment is the amount you pay upfront when you finance property. Your purchase price minus your down payment equals your mortgage amount. The higher your down payment, the more likely you are to be approved for a home loan. If your down payment is less than 20 percent of the purchase price, you'll probably be required to pay for mortgage insurance, which increases your monthly payment.
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Credit Score
Your credit score is a number designed to measure your credit-worthiness. It's based on a formula that combines many factors, including your payment history, amount of credit used and number of accounts. This number is used by lenders to calculate the probability that you'll default on your mortgage. Most lenders won't approve mortgages to applicants with credit scores lower than 620. Your credit score is one of the most important factors that determines your mortgage rate - applicants with higher scores are offered better mortgage rates.

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Mortgage rate quotes displayed on LendingTree LoanExplorer℠, including loan pricing data, rates and fees, are provided by third party data providers including, but not limited to, Mortech®, a registered trademark of Zillow®, LoanXEngine, a product of Mortgage Builder Software, Inc., and LoanTek, Inc.

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Looking for a mortgage in the Wolverine State? You're on the right page! If you have questions about lending practices in Michigan, the Department of Insurance and Financial Services, Office of Consumer Finance regulates lenders within the state.

Michigan Mortgage Rates

When looking at Michigan mortgage rates, don’t try to compare them to those in other states. Factors such as the state economy, the degree of competition among lenders and the state’s lending laws all vary from one state to another and affect mortgage rates.

Buying a Home in Michigan

Housing prices appear to be on the rise again in Michigan after taking an almost 26% plunge that started at the end of 2005.

At $180,000—the median sale price of a home in Ann Arbor--housing prices there are among the highest in the state, according to the Housing Opportunity Index (HOI). The good news is that if you earn the median income of $84,200, more than 82% of homes in Ann Arbor are affordable.

The picture is similar in other parts of the state where the HOI reports that 85% or more homes are affordable to median income households.

Closing costs are also reasonable at $2,203, some of the lowest in the country ranking Michigan 48th out of 50 states and the District of Columbia.

For households who need financial assistance to buy a home, there are a number of programs offering help with down payments and closing costs:

Individual cities and towns also offer similar types of assistance.

FHA Mortgages

FHA mortgage rates are not regulated by the government, even though the loans are government-backed. The maximum amount you can borrow is determined by the property location. In most counties the limit is $271,050, but there are some notable exceptions: in Niles-Benton Harbor the cap is $298,750; Warren-Troy-Farmington Hills, $297,500; and in Kalamazoo-Portage, $286,250.

 VA Home Loans

The Department of Veterans Affairs does NOT put caps on loan amounts; however, most lenders limit loan amounts to four times the VA guarantee, and that amount varies by property location. Most lenders cap mortgages at $417,000 in all Michigan counties.