Michigan mortgage rates continue to fall throughout the state. Because of the variety of different areas, towns, big cities and small rural areas, prices are found throughout the state in a very wide range.
General Real Estate Prices
In the Detroit area, the median price today is $89,900 which is down 5.3 percent from last month, 19.5 percent for the year. As prices are falling, so are the number of available units with only 33,013 available in December of 2010, down 2.5 percent from the previous month and 14.8 percent for the year. As a comparison, current median real estate prices in Columbus, Ohio for December was $148,500 for housing, down 1.1 percent from the previous month and 7 percent for the year. However, one notices that by comparison Ohio real estate prices are nearly double that of Michigan real estate prices.
Popular Cities and Growing Cities
Some cities throughout Michigan are experiencing rapid growth while others are experiencing rapid decreases in size. The main reason for this is due to expanding businesses in the growing areas and other businesses reducing their size or leaving the area all together in the shrinking areas.
Plymouth Township
Plymouth Township in Wayne County, Michigan has experienced an incredible come back due to the industrial expansion and automotive technology. From 2000 until 2010, they have experienced a population growth of 12 percent and an annual household median income growth of 33 percent. Other cities and towns in Michigan experience seasonal growth as well as increased population for university and college students. These population growth trends are seen on a yearly basis.
More importantly regarding Michigan, two of the top ten cities that are rapidly shrinking are in Michigan. These include Detroit and Flint. With the economic downturn of late, as well as the automotive industry’s difficulties, Detroit and Flint have both experienced and continue to experience double digit unemployment rates and people leaving the area in search of better prospects. As the automotive industry begins to make its come back, it is anticipated that these areas too will begin to prosper once again.
Types of Mortgages in Michigan
There are several types of mortgages available in Michigan. Those include FHA loans, government insured mortgages that allow you to buy a home with only 3% down payment; VA loans, if you are a veteran, you may buy a home with no money down; conventional Loans, any mortgage loan that requires 5% down payment and is less than $417,000 for a single family home; and jumbo loans, any mortgages where the loan amount is higher than $417,000 for a single family home.
FHA Home Loans
FHA loans are intended to assist buyers who have less than perfect credit buy a home. These loans can be used for any home buyer, not just first time buyers. Also, an FHA loan can be obtained a repeated number of times, provided that the home buyer does not have more than one FHA loan at any given time. FHA loans are also available for refinancing purposes. These loans are normally applied for by people who have low credit scores or who lack the ability to supply an adequate down payment to secure a conventional loan.
VA Loans
VA Loans are intended to assist veterans in buying a home. These loans are similar to FHA loans and provide the ability to refinance and streamline mortgages that are already in existence. These loans are secured by the Veteran’s Administration. Veterans are given much consideration in the finance world as they are in other areas due to the service that they have provided to the country.
Conventional Loans
These are typical mortgages requiring a 5 percent down payment on a single family home costing less that $417,000. Generally, these loans are applied for first prior to applying for FHA or VA loans. FHA loans are usually applied for when one cannot acquire a necessary down payment or their credit score is not high enough.
Jumbo Loans
Jumbo loans are conventional loans for a single family housing unit that requires a mortgage of more than $417,000. While these are available in Michigan, there are not many housing units available requiring this type of a loan.
Fannie Mae and Freddie Mac Loans
These loans fall into the conventional loan category. Recently both of these companies have run into severe financial difficulties due to the real estate market crash. Other programs have been instituted to take over for these companies.
Foreclosure Process
For many Americans today, foreclosure has become a matter of when rather than if. For all of these mortgage types, most will work with you to try to keep you out of the foreclosure area. If the attempts are unsuccessful, then foreclosure proceedings are started. Generally, this will involve a posting in the local newspaper stating that the property is being foreclosed upon, followed by a court hearing in most cases. Following the court hearing, there will be a sale of the property. The current owners are then given a period of time to vacate the property. In general, the foreclosure process is stated in the loan document that is signed at closing. This will give the amount of time as well that the current owners will have to relocate after the sale of the property has been completed. Normally, if there is any chance at recovery, working with the mortgage company is recommended.
Current Interest Rates
As the interest rates are remaining steady at a relatively low percent, many people have chosen to refinance mortgages in order to get a lower interest rate. In addition, the interest rates for those with bad credit are lower as well. Currently, for a 30 year FHA mortgage, interest rates are sitting at 4.75 percent. For a conventional 30 year mortgage, interest rates are at about 5 percent. When reviewing interest rates, it is important to understand that these rates can — and do — change very quickly. This is available December 2010 data.
Additional Housing Programs
Habitat for Humanity is also another option for people looking to buy a home. It is thought that Habitat for Humanity is a program for those people with bad credit. In actuality, in Michigan, Habitat for Humanity requires a good credit score, a relationship with a banking institution and what is known as sweat equity to qualify for a home loan through them. In addition, you are applying to purchase a Habitat for Humanity home, not just any home. The homes available through Habitat for Humanity are built by them on donated or purchased land. The assistance that they supply is lower payments. Family members of those applying for a Habitat House are required to work a specific number of hours either on the building of the home itself or in some other way contributing to the work.
HUD offers housing assistance through rental programs and home buying assistance. In the waves of financial problems and foreclosures in Michigan lately, HUD has available housing for those wishing to purchase it. However, it is important to note that many of the houses that have been financed by HUD are in bad shape when they are foreclosed upon and require a large amount of work to make acceptable again.