Zero Down Loan Programs For First Time Buyers in Michigan
The Michigan first time home buyer programs have seen a few changes recently that can affect your pocketbook. Rates have increased by almost one full percentage point in the last twelve months. This has many first time home buyers perplexed about whether it makes more sense to rent a house now that they have less purchasing power.
The housing market is currently filled with way more buyers than homes for sale which creates serious competition for first timers. This low inventory drives a sellers market and it makes creating a good offer super important for buyers that are serious about owning a home.
Is It Better To Buy a Home Or Should I Rent?
These dramatic market changes could scare prospective buyers into thinking a rental makes better financial sense. The problem with this line of thinking is that rental rates have also gone up due to inflation. In most cases, owning a home is still just as affordable as renting a home when you compare monthly payments. Keep in mind that it does depend on which city you want to live in.
Also, even though rates have increased, they are still far below 5 % which is a historically low interest. In fact, we are still seeing rates below 4% on 15 year and 30 year fixed loans.
When it comes down to the numbers and solid mathematical data, owning a house will be the better financial choice until rates climb well above 6%. This is because the monthly payment for owning a home is almost always at or below the amount to rent the same home. Plus, with each mortgage payment you are building equity for yourself instead of the landlord with a rent payment.
You May Need More Cash Up Front To Buy But Its a Far Better Investment
However, buying a house typically requires more cash up front than renting which could create a barrier for entry for many Michigan first time home buyers. When renting you will typically need first months rent and a security deposit which can equal several thousand dollars depending on the rent.
A home purchase will require a minimum 3% down payment with good credit and 3.5% if you have marginal credit. However, this up front investment will pay a return as each mortgage payment you make builds a little more equity.
Most home buyers can recoup their initial investment within a couple years. Currently homes are appreciating by over 3% per year which will help accelerate the return on investment.
A Gift May Pave Your Way To Homeownership
One way to get around the up-front costs of a home purchase would be to get a gift for your down payment. While this choice isn’t offered to every person, we’ve helped lots of first time buyers obtain their dream home by utilizing gift funds from a friend or relative for the down payment and closing costs.
Another popular strategy for finding down payment funds is to use an income tax return. Beyond that, there are a few reliable grant programs that can help.
Michigan Mortgage Solutions Has a Full Team of First Time Home Buying Experts
If you are a Michigan first time home buyer looking for a local mortgage lender, call Michigan Mortgage Solutions at (248) 674-6450. We carry an A+ score with the Better Business Bureau and we have hundreds of current 5 Star Reviews on Google, Yahoo, Yelp, and several other online business directories.
Nevertheless, if you happen to have any questions relating to Michigan first time home buyer programs or FHA loans, do not hesitate calling (248) 674-6450 and we will get you on your way to owning your first home.
Your 5-Star First Time Buyer Experience Includes…
- A no-cost/no-obligation pre-approval…
- Find out how much you can borrow…
- Start house shopping today…
- Answers to all your questions 24/7…
- Access to the lowest rates possible…
- We help buyers with credit issues…
Call (248) 674-6450 For an Instant Pre Approval
Michigan Mortgage Solutions is Dedicated to Making Your Home Purchase as Easy & Stress Free as Possible! Take our 45 second First Time Buyer Quiz to find out what mortgage program will work best for you. Find out if you can qualify for a $0 down program today!