Mortgage Rates in Michigan
Compare today's average mortgage rates in the state of Michigan. Bankrate aggregates mortgage rates from multiple sources to provide averages for Michigan.
Michigan mortgage overview
The state of Michigan offers mortgage options and first-time homebuyer assistance programs to help make becoming a homeowner more affordable.
Michigan conventional mortgages: To qualify for a conventional mortgage, you generally must meet the following requirements.
- Credit score of at least 620
- Debt-to-income ratio (DTI) of no more than 45 percent
- Down payment of at least 10 percent of the loan amount
- Pay private mortgage insurance (PMI) if down payment is less than 20 percent
Michigan FHA loans: If you don’t meet conventional loan requirements, you may qualify for an FHA loan. These are backed by the Federal Housing Administration, and the requirements include:
- Credit score of at least 500
- 10 percent down payment if credit score is between 500-579
- 3.5 percent down payment if credit score is 580 or higher
- DTI between 31 percent and 41 percent
Michigan VA loans: Insured by the Department of Veterans Affairs, VA loans are offered to qualifying veterans and active duty members of the armed forces. VA loans don’t require a down payment or PMI, and can be obtained through a VA-approved lender.
First-time homebuyer programs in Michigan
The Michigan State Housing Development Authority (MSHDA) provides first-time homebuyers, or those who haven’t owned a home in the past three years, options to help purchase a home.
MI Home Loan
The MI Home Loan, also known as the Michigan Down Payment loan, is available to both first-time homebuyers throughout the state and repeat buyers in targeted areas, provides down payment assistance up to $7,500. To qualify, borrowers are required to:
- Apply through an eligible lender, found on the MSHDA website
- Complete a homebuyer education course
- Have a minimum credit of 640 (660 for multiple-section manufactured homes)
- Meet household income limits, which vary based on household size and location, and the sales price limit ($224,500 as of June 2020)
Also offered by the MSHDA is the MI Home Loan Flex, another down payment assistance loan with similar requirements, but available to first-time homebuyers and repeat buyers throughout the state.
With the MI Home Loan Flex, borrowers “do not necessarily need” to have paid off collections or judgement against them to qualify, but their credit score does need to meet a minimum of 660.
Michigan Mortgage Credit Certificate (MCC)
The Michigan Mortgage Credit Certificate (MCC) allows first-time homebuyers throughout the state and repeat buyers in targeted areas to claim a federal tax credit for the interest on their mortgage. The credit is worth up to 20 percent of the interest paid yearly, and can be claimed each year for up to 30 years.
Michigan mortgage refinancing
With interest rates at record lows, Michigan borrowers may be interested in refinancing their mortgage into a new one with a lower rate. Use Bankrate’s mortgage refinance calculator to see how much you can save by lowering your rate.