Refinance rates in MichiganCurrent 30-year fixed mortgage refinance rates are averaging: 7.31%
The current average rate for a 15-year fixed mortgage refinance is: 6.76%
See whether refinancing makes sense for you using our mortgage refinance calculator.
What is the current mortgage rates forecast for 2024?The current mortgage rates forecast isn’t all sunshine and rainbows, but it does call for cautious optimism. That’s because rates aren’t expected to rise significantly in the near future, and our market expert thinks that 30-year rates could end the year closer to 6% — and perhaps even lower.
Although home affordability is still an ongoing problem across the country, if inflation continues to ease and interest rates remain where they are (or go even lower), the housing market may have a chance to pick up steam.
There are many factors determining mortgage rates that are out of your control, but don’t worry — there are a few steps you can take today to get the best mortgage rate:
Read more about our picks for the best mortgage lenders.
When should I lock in my mortgage rate?Once you’ve applied for a mortgage and received a loan estimate with an offer you want to take advantage of, you should request that the lender give you a mortgage rate lock. This ensures that your interest rate won’t increase before you make it to the closing table.
If you want to own a home in Michigan and need some assistance, your first stop should be the Michigan State Housing Development Authority (MSHDA). They offer a variety of programs that help first-time homebuyers cover closing costs and down payments. However, MSHDA also allows repeat buyers to participate as long as they live in certain neighborhoods known as “targeted areas.”
Who qualifies as a first-time homebuyer? People who have never owned a home
People who haven’t owned real estate in the last three years
Qualifying counties, cities and townships are compiled in this list of Michigan targeted areas.
This MSHDA program offers 30-year conventional, FHA, VA and USDA mortgages that come with discounted interest rates. These loans can also be paired with MSHDA’s down payment assistance program, which we’ll cover below.
Who qualifies?All adult household members must:
Be a first-time homebuyer or purchasing in a targeted area
Have at least a 640 credit score (minimum may be higher depending on housing type)
Purchase a house worth no more than $224,500
Earn within the program’s income limits
Worried about meeting the credit requirement?
If you can’t meet that 640 credit requirement as a household, don’t despair. As long as one person in the household has at least a 640, that person can apply for the loan alone using MSHDA’s “flex” option. The only drawback is that a “flex” loan can’t be used with MSHDA’s down payment assistance program.
This is a generous down payment assistance program, which offers Michiganders up to $10,000 in the form of a second mortgage. The funds can also be used to pay for closing costs, escrow deposits or prepaids (like taxes, insurance or special assessments). The money does have to be repaid, but only when you sell or refinance the home — there are no interest charges or monthly payments along the way.
Who qualifies?Borrowers must:
Use the program in conjunction with a MI Home Loan program (described above)
Complete a homebuyer education course
Be prepared to contribute at least 1% of the home’s price
Funded by the American Rescue Plan Act (ARPA), this program offers up to $25,000 to low- and middle-income Detroiters who need help coming up with a down payment. The funds can also be used to cover closing costs, prepaids, mortgage points and to pay down the first mortgage’s principal balance. As long as you stay in the home for three years, this money — which comes in the form of a grant — doesn’t have to be repaid. If you leave before three years, you’ll have to repay some or all of the funds.
Who qualifies?Borrowers must:
Meet the program’s income limits, which range from $43,740 per year for a one-person household to $151,680 for an eight-person household.
Be a Detroit resident who has lived in the state for at least 12 months or a former Detroit homeowner who lost a home to property tax foreclosure between 2010 and 2016
→ Michigan conventional loans. Conventional loans offer good options for borrowers who may not want to make a huge down payment but can meet fairly stringent credit score and other minimum requirements.
→ Michigan FHA loans. For those struggling to meet the 620 credit score requirement that typically come with conventional loans, FHA loan requirements offer an alternative. You can qualify with a score as low as 500 if you make a 10% down payment. And if you can only afford to put down between 3.5% and 10% of the home’s purchase price, you can still qualify for an FHA loan, as long as you have at least a 580 credit score.
→ Michigan VA loans. VA loan requirements are even more forgiving, and there’s no minimum credit score or down payment requirement set by the VA (as long as you have full VA entitlement).
→ Michigan streamline refinances are FHA streamline refinance loans or VA interest rate reduction refinance loans(IRRRLs). They’re called “streamline” because you can move through the refinance process quicker and with less paperwork than other refinance programs allow. The only big drawback is that you have to refinance from an FHA loan into an FHA loan, or from a VA loan into a VA loan. If you want to switch programs, or refinance into a conventional loan, you won’t be able to use a streamline refinance.
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