Everything You Need to Know About Michigan FHA Loans
Getting an FHA loan in Michigan may provide you a way to get a home when you otherwise might not be able to. The FHA program is meant to help modest-income people afford homes at more reasonable rates and with more reasonable terms as opposed to traditional programs.
To get FHA loans in Michigan, you do have to qualify for the program. It’s actually pretty simple in most cases. You have to be 18 years of age, and you have to verify that you are going to live in a home that you purchase with FHA financing. You’ll also needÂ private mortgage insurance or PMI for short with an FHA home loan, and you may only have to put 3.5% down.
In order to qualify for FHA home loan in Michigan
You’ll need to submit to having your credit report checked. Your credit history, your current debt obligations, and your score all factor into whether or not you may qualify. In general, those with scores of the least 600 can potentially get for an FHA home loan. If you don’t have a history, FHA may consider alternate means of establishing your eligibility for a loan.
Michigan Calculator for FHA Home Loans
In Michigan, FHA requires that you also pay upfront and monthly PMI. The upfront PMI is 1.75% of the amount financed and is added into the new loan. The monthly FHA PMI is 0.85% of the amount financed and divided by 12 months.
Due to the fact that these calculations aren’t easy to remember, we’ve included them in our Mortgage Calculator App that you can download for free. This calculator will automatically calculate the FHA insurance for you without having to think about it. It also has up to date FHA rates to further assist you in your calculations. You can download the Calculator App by clicking the link below;
Click here >> Michigan Mortgage Calculator App
Using this calculator to determine the payment on your home loan couldn’t be any easier. You simply enter your purchase price into the calculator and it completes the calculation since the rates are already populated. This will allow you to find the most accurate FHA loan payment based on existing rates.
Important Debt Ratio Information for FHA Loans in Michigan
Another qualification for FHA in Michigan is that you need to prove that you can afford the house you’re going to buy. To that end, the FHA has established limits to determine just how much house you can afford based upon your debt to income ratio. The maximum housing ratio you can have for FHA is 33%. The debt ratio accounts for everything, including your mortgage payment (principal, interest, property taxes, homeowners insurance, and PMI premiums). This amount is divided by your gross monthly income. If the resulting percentage is no more than 33%, you can generally get approved.
Your total debt to income ratio can be no more than 45%. That’s the total of your mortgage payment (including all expenses as listed above), plus your total amount of recurring debt (student loans, car loans, credit cards, etc.), divided by your total monthly gross income. The resulting percentage can’t exceed 45%.
What about rates on FHA home loans in Michigan?
FHA rates in Michigan are dependent on a borrower’s credit score and mirror the current levels of interest rates (higher or lower), in general, depending on the health of the economy, and interest rates as set by the government. All of this information should be clearly explained by your broker when trying to qualify for an FHA loan in Michigan.
Michigan FHA Requirements
- Only 3.5% down
- 600 minimum credit score – restrictions apply
- Michigan max loans – $271,050
- Entire Down payment can be a gift, a government assistance program or grant funds
- Seller can pay 6% of purchase price toward closing costs