Getting the Best Mortgage Rates in Detroit (10-15-30-Year Fixed, 5/1, 7/1 ARM)
For Michigan residents, buying a home in Detroit is becoming increasingly difficult as the city continues to rebuild and rebrand itself.
As reported in Crain’s Detroit Business, Detroit home mortgages are struggling to compete with larger entities, like landlords, that can purchase homes quickly and in cash, rather than using the traditional lending model of a Detroit home mortgage.
In 2016, only 19 percent of home sales in Detroit were completed with Detroit home mortgages, marking a significant imbalance in the local housing market.
Thankfully, buying a home in Detroit should become easier as time goes on with the help of programs like the Detroit Home Mortgage program, which lessens lending barriers and provides Detroit home mortgages (including renovation and refinance loans).
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Detroit Home Mortgage Program
The Detroit Home Mortgage program was created in response to the discrepancy between homes purchased through mortgages and homes purchased with cash. Part of this issue stems from homes being listed at higher prices than they are appraised for, as explained by BLAC.
As a result, the Detroit Home Mortgage program helps qualified borrowers for up to $75,000 over the appraised value of a home. These Detroit mortgages are available for homeowners that want to purchase:
- A move-in ready home
- A fixer-upper home for renovations
Through the program, Detroit home mortgages are also available for homeowners that want to refinance an existing mortgage in order to make renovations.
Eligibility requirements for the Detroit Home Mortgage program include a credit score of at least 640, intent to purchase a home located within the city of Detroit, and “adequate” income.
There are currently five mortgage companies in Detroit providing affordable Detroit home mortgages:
- Flagstar Bank
- Independent Bank
- Huntington
- Liberty Bank
- Chemical Bank
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Saving for Down Payments on Detroit Home Mortgages
Along with finding great rates and the best mortgage companies in Detroit, many new homeowners struggle with saving enough money for a sizable down payment.
If you don’t have a savings already established, the thought of putting aside thousands of dollars to get better rates on Detroit mortgages can be daunting.
Below, we’ve compiled a few tips to help you save for a down payment and get the best rates for Detroit home loans:
Re-Examine Your Budget
While some expenses are non-negotiable, creating a monthly budget can help you identify and fix overspending in non-essential categories.
Free budgeting tools—like those from Mint and Personal Capital—will take your monthly expenditures and sort them into categories like food, restaurants, bars, and entertainment.
You can use budgeting tools to decrease spending and allocate those savings towards a Detroit home mortgage fund.
Pick Up Additional Income
Earning additional income is a great way to increase your financial stability and build your down payment savings to lock in great mortgage rates in Detroit.
There are plenty of options for stay-at-home jobs to consider, or you can pick up a part-time job to supplement full-time income.
Make a commitment to apply additional income to your Detroit home mortgage savings, and you will be in good shape to contribute a 20 percent down payment.
Detroit, MI
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Conclusion – Additional Considerations for Detroit Mortgages
When searching for the best rates and mortgage companies in Detroit, there are a few additional pieces of information to keep in mind.
If you have a good, great, or excellent credit history and you are seeking a Detroit home mortgage for a loan totaling over $424,100, some lenders may be able to provide more competitive terms and rates on Detroit mortgages.
For this reason, it’s important to confirm current Detroit home mortgage rates and terms for specific amounts before making a commitment.
Additionally, it’s also important to keep in mind that APR and payment estimates do not include state-specific taxes or required insurance premiums. As such, you should expect that monthly payments on a Detroit home mortgage will be greater when taxes and insurance products are added.
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