Michigan Mortgage Rates

Last week, the Bureau of Labor Statistics announced that unemployment had finally fallen below 8% after months of flirting with the resistance barrier. As a result of falling unemployment, the stock market jumped and mortgage rates stayed at record low levels. In Michigan, 30-year fixed rate mortgages are being offered at a low rate as lenders continue to borrow cheaply from the Federal Reserve.

The 30-year rates on offer are only marginally above the Federal Reserve’s inflation target of 3%, while 15-year fixed mortgages are being offered below the target rate of inflation. These rates apply not only to conventional mortgages but also to FHA mortgages, for both new loans and refinances.

More and more homeowners in Michigan are refinancing their FHA loans to take advantage of these low rates. In 2005 and 2006, interest rates were double today’s rate, with many lenders offering loans at 7% or higher. Today, lower interest rates are attracting interest to an FHA streamline refinance, because homeowners in Michigan can save hundreds of dollars on their monthly mortgage payments while paying less interest, thanks to these historically low interest rates.

In 2011, many homeowners could not take advantage of low rates because FHA streamline loans were limited to homeowners who were not severely underwater on their loans. Since June 11th, new rules on who can qualify for an FHA streamline refinance mean that homeowners can qualify for a loan, no matter how much they owe on their house and no matter how much their house is worth. Even someone with a $500,000 mortgage on a house worth only $50,000 could theoretically qualify.

The new rules on an FHA streamline refinance also cut the closing costs. Upfront mortgage insurance premiums cost only 0.01%, so a $200,000 loan would only pay a premium at closing of $20. Monthly insurance premiums have also been lowered to 0.55%, so that same mortgage would include monthly insurance costs of only $91.66.

The lower closing costs and lower monthly payments are already causing a spike in FHA streamline refinance activity in Michigan, which is set to continue as homeowners across the state look for options to lower their monthly mortgage payments.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.