Conventional Mortgage Michigan

Ready for a home loan with flexibility and no strings attached? It’s attainable.

With a Conventional Mortgage, you can structure your home loan to your needs.

You’ve worked hard to maintain your credit score—make it pay off with a Conventional Mortgage and low interest rates.

If you have a respectable credit score and are ready to buy a home in Michigan, you can take advantage of the phenomenal benefits of conventional home loans. Opting for a conventional loan through Homesite Mortgage gives you access to a highly professional team of Michigan mortgage experts ready to help you realize your property ownership goals.

Conventional Loan Overview

Conventional loans fall into one of two categories: conforming and non-conforming mortgages.

Conforming mortgages align with Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) underwriting standards and limits.

Non-conforming mortgages fall outside the parameters of the Fannie Mae and Freddie Mac guidelines and often relate to significantly higher loan amounts.

Michigan Conventional Loan Limits

Conventional loan limits are calculated annually according to the number of dwelling units on the property, with a limit of four units. The current limits set out by Fannie Mae and Freddie Mac for Michigan are as follows:

  • Properties with one dwelling: $726,200
  • Properties with two dwellings: $829,850
  • Properties with three dwellings: $1,123,900
  • Properties with four dwellings: $1,396,800

Conventional Loan Requirements in Michigan

Prospective Michigan homeowners must meet specific requirements to qualify for a conventional loan. There may be some exceptions, but your chances of securing a mortgage loan are far better when you meet the following criteria.

Down Payment Requirements for a Conventional Loan

The type of property, loan variety and your financial standing all play a part in determining your required down payment value. While down payments as low as 3% are possible, homebuyers can typically expect the following down payment percentages in these situations:

  • 5% down payment: This 5% minimum down payment value applies to mortgage applicants opting for an adjustable-rate mortgage, those buying their first home or homebuyers with an income lower than 80% of the average in the area.
  • 10% down payment: Borrowers seeking financing for a second property must provide a 10% down payment.
  • 15% down payment: Homebuyers who wish to purchase property comprising two or more dwelling units can expect to provide a 15% down payment.

Private Mortgage Insurance for Smaller Down Payments

Borrowers opting for a down payment lower than 20% must pay an additional monthly fee with their mortgage repayments, known as private mortgage insurance (PMI). This insurance protects the lender against financial loss if the borrower defaults on their payments. Once you accumulate 20% in equity, you can ask us to remove the PMI from your deductions.

Minimum Credit Score Requirements

To qualify for a conventional mortgage in Michigan, applicants must undergo a credit check and have a score of 620 or more.

Income vs. Debt Ratio

When applying for a conventional loan, we will calculate your debt-to-income (DTI) ratio to determine whether you can afford the loan given your current debt. This figure is determined using the sum of your expenses each month and dividing it by your total monthly household income. A DTI of 50% or less is ideal.

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Features of Conventional Loans

Some of the integral features you can expect when you choose a conventional mortgage loan include:

  • Interest rate lock: The interest rate stipulated in your loan offer will remain unchanged until the loan is closed.
  • Flexible terms: Choose from 15 to 30 years to pay back your loan, with longer terms resulting in lower monthly repayments and shorter terms garnering equity faster.
  • Fixed payments: Opting for a fixed-rate conventional loan makes it easier to calculate your monthly budget.
  • No insurance premiums: There's no need for monthly PMI payments if you provide a down payment of 20% or more.

How to Calculate Your Mortgage in Michigan

Know what to expect month-to-month before you secure your conventional loan by using our handy Mortgage Payment Calculator tool to determine your estimated monthly repayment amounts. Because several factors affect your monthly repayment total, working it out can become complex, which is why it's best to use our calculator and leave the math to the experts.

Simply input your total home loan amount, annual interest rate and preferred loan term, and click "Calculate." Our calculator will provide an accurate monthly repayment amount based on this information, helping you plan for your loan.

Contact Homesite Mortgage for Michigan Conventional Loan Pre-Approval

At Homesite Mortgage, we believe buying a home should be an exciting and joyful life event. That's why we make every effort to ensure a hassle-free experience, providing industry-leading advice and guiding you through the process one step at a time. Speak to our team about your Michigan conventional loan today by calling our hotline or scheduling your call online.

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