Michigan Mortgage Calculator

Best mortgage lenders in Michigan

The most popular mortgage lenders in Michigan operate nationwide. These include such recognizable names as Northpointe Bank, Change Home Mortgage, AmeriSave.

How to calculate mortgage payment in Michigan

Use our mortgage calculator MI to evaluate your future monthly expenses. A detailed step-by-step instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Michigan for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Michigan parameters.

The initial piece of the puzzle pertains to the cost of your prospective home, often referred to as the home price. The down payment represents the portion of this price that you intend to pay upfront. To avoid incurring costly insurance premiums, it's advisable to come up with a down payment of at least 20%, particularly in the case of a conventional loan. The remaining sum constitutes the principal amount, which equates to 80% of the home price when a 20% down payment is applied.

The loan term signifies the duration over which you will fully repay your mortgage through scheduled payments. Fixed-rate conforming loans typically extend for a maximum of 30 years, while adjustable-rate alternatives usually come with shorter terms.

An interest rate is a fixed or variable percentage of the principal that you are required to repay throughout the loan's duration. It's important to note that you are actually subject to an annual percentage rate (APR), often abbreviated as APR, which isn't precisely identical to the interest rate. While the interest rate constitutes the majority of the APR, the latter also encompasses various additional charges, such as origination fees, closing costs, and insurance payments.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in Michigan, given a $400,000 home price and a 10% down payment.

Median property taxes in Michigan counties

Property tax is another crucial factor to take into account when choosing your prospective home. A number of lenders require the establishment of a mortgage escrow account to ensure that the borrower remains current with their tax and insurance expenses.

Source: American Communities Survey 2016, U.S. Census

Michigan Housing Market 2024

Over the past year, there has been a significant surge in the housing market value in Michigan, further accentuating a longstanding trend that was intensified by the COVID pandemic. However, it's worth noting that the rate of growth has slowed compared to the previous year. Additionally, both purchase and refinance rates have been steadily rising for some time, and it is anticipated that they will continue to increase in the near future.

How do I calculate my mortgage payment?

The most convenient way to do this is to make use of our calculator. It's powered by a simple formula, which you can also use to calculate the amount to be paid by hand:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Consider a scenario in which you are seeking a 15-year mortgage loan with a fixed annual percentage rate (APR) of 6.99%, which can be expressed as a unit fraction as 0.0699. The total cost of the house is $500,000, and you plan to make a down payment of 10%, amounting to $50,000. Consequently, the principal amount (P) will be equivalent to 90% of the initial home cost, calculated as follows: $500,000 - $50,000 = $450,000.

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in Michigan

First, there are several federal agencies (USDA, FHA and VA) that guarantee loans for selected borrowers. Many first-time homebuyers can find options which most fit their budget.

Besides these government-guaranteed programs, it is worth considering some offers from UHC (Michigan Housing Corporation) available to Michiganns. In particular, first-time home buyers can apply for FirstHome – down payment and closing costs assistance program, if they qualify for a FHA loan and their FICO score is at least 660. This option covers up to 6% of the loan amount toward down payment and/or the closing costs. It is important to note that this option comes in the form of a 30-year-fixed-rate second loan only. If you do not qualify for the FirstHome program, do not despair. Michigan Housing Score Loan is an alternative program that covers up to 4%. The minimum satisfactory credit score is 620.

Here are some valuable tips for first-timers:

1. Obtain pre-approval in advance to boost your credibility with home sellers. It's advisable to obtain pre-approval letters from not just one, but ideally two or three different lenders.
2. Compare mortgage rates from multiple sources. Aim to evaluate offers from at least three different lenders to ensure you get the most favorable terms.
3. Conduct preliminary financial planning based on the amount you've been pre-approved for. This will help you prepare for your future expenses and budget accordingly.
4. Start saving for a down payment as early as possible and contribute as much as you can. A larger down payment reduces the principal amount, which can lead to lower overall expenses. Early savings planning is crucial.
5. If you're eligible for a VA loan, consider this option as a priority, as it can offer favorable terms for eligible veterans.
6. Explore government-backed mortgage plans and local assistance programs. These programs may have enticing offers that can provide valuable financial assistance, so it's important not to overlook them.
7. If feasible, work on paying off any existing debts. Reducing your outstanding debts can improve your financial standing and increase your eligibility for favorable mortgage terms.