Michigan Mortgage FAQ

Minimum credit scores vary by loan type:

• FHA Loans: 580+ (3.5% down) or 500–579 (10% down required)
• VA Loans: No official minimum, but most lenders require 580–620
• USDA Loans: 640+
• Conventional Loans: 620+ (minimum), 740+ (best rates)
• Jumbo Loans: 680–700+

• 0% Down: VA loans, USDA loans
• 3% Down: Conventional loans (HomeReady, Home Possible)
• 3.5% Down: FHA loans
• 5% Down: Standard conventional loans
• 10–20% Down: Jumbo loans

The 20% down myth: You do NOT need 20% down. Most first-time buyers put down 3–6%.

Pre-Qualification: Quick estimate based on self-reported info, no credit check, not meaningful to sellers.

Pre-Approval: Full application, credit pulled, income verified — strong negotiating tool with sellers.

• Purchase Mortgages: 30–45 days from accepted offer
• Refinances: 30–45 days from application
• FHA Streamline Refinance: 14–21 days
• VA Streamline (IRRRL): 21–30 days
• Cash Purchases: 7–14 days

• Access to 12+ lenders vs a bank’s single product line
• Shop for best rates and terms on your behalf
• Personalized service — not a call center
• Work for you, not the lender
• Often better rates through wholesale pricing

Learn why 500+ Michigan families have chosen to work with me.

• 500–579: FHA loan with 10% down
• 580–619: FHA loan with 3.5% down
• 620–639: FHA or Conventional (higher rates)
• 640+: All loan programs available

Yes! Student loan debt does NOT prevent homeownership in Michigan.

• Standard repayment: Lenders use the actual monthly payment
• Income-driven ($0 payment): Lenders use 0.5–1% of balance

Example: $40,000 in loans at $0 payment = $200–$400 counted in your DTI.

DTI = Total Monthly Debts ÷ Gross Monthly Income × 100

• FHA: Up to 57%
• VA: Up to 60%
• USDA: 41%
• Conventional: 45–50%
• Jumbo: 43–45%

Use our DTI calculator to estimate your ratio.

Absolutely! Requirements include 2 years self-employment history, 2 years personal and business tax returns, year-to-date P&L statement, and balance sheet.

Yes! Gift funds from family, employers, or charitable organizations are allowed. Requirements: gift letter, donor bank statements, and proof of transfer.

• FHA: 100% of down payment can be gifted
• VA/USDA: 100% (0% down anyway)
• Conventional: 100% if 20%+ down

• 401(k) Loan: Borrow up to $50,000, no taxes if repaid
• IRA Withdrawal: Up to $10,000 penalty-free for first-time buyers
• Roth IRA: Withdraw contributions tax and penalty-free

Closing costs typically range from 2–5% of the loan amount. On a $250,000 loan that’s $5,000–$12,500.

• Seller concessions: Seller pays 3–6% of costs
• Lender credits: Higher rate in exchange for lender paying costs
• VA loans: Seller can pay all closing costs

See our full Michigan closing costs guide for a complete breakdown.

*FHA with 10%+ down can drop MIP after 11 years

• Veterans: 90+ consecutive days wartime OR 181+ days peacetime
• Active Duty: 90+ consecutive days
• National Guard/Reserves: 6+ years of service
• Surviving Spouses: Of veterans who died in service

Benefits: 0% down, no PMI, competitive rates, seller can pay all closing costs. Get your Certificate of Eligibility at VA.gov.

Many Michigan suburbs qualify including Hudsonville, Jenison, Byron Center, Zeeland, Allendale, Sparta, Cedar Springs, Lowell, and most of Ottawa, Allegan, and Kent County suburbs.

Check the USDA Eligibility Map. Income limits: 1–4 person $103,350 • 5–8 person $136,400 (2025).

PMI protects lenders on conventional loans with less than 20% down.

• Automatic removal: At 22% equity based on original value
• Request removal: At 20% equity (may require appraisal)

FHA MIP: Required for life if less than 10% down. Only removal option: refinance to conventional.

All Borrowers: Photo ID, SSN, 2 years employment history

W-2 Employees: Last 2 years W-2s, 30 days pay stubs, 2 months bank statements

Self-Employed: 2 years personal and business tax returns, YTD P&L and balance sheet

Begin your application online.

Underwriting is when lenders verify all information and approve or deny your loan. Underwriters review credit, employment, income, down payment, DTI, appraisal, and title. Initial review takes 2–5 business days.

NO! Avoid until AFTER closing: buying a car, opening new credit cards, large purchases, changing jobs, moving large sums of money, or co-signing loans.

An appraisal is an independent property value evaluation ordered by the lender.

If appraisal comes in LOW: renegotiate the price, split the difference, bring more cash, challenge with additional comps, or walk away using the appraisal contingency.

Contact me if you’re facing an appraisal issue.

Discount points are upfront fees to lower your rate. 1 point = 1% of loan amount, typically lowering rate by 0.25%. Calculate break-even: cost ÷ monthly savings = months to recoup. Use our mortgage calculator to run the numbers.

Escrow accounts hold money for property taxes and insurance. You pay 1/12 monthly; the lender pays the bills when due. Required for FHA, VA, USDA, and Conventional loans with less than 20% down.

• Lender’s Policy: Required by all lenders, $800–$1,500
• Owner’s Policy: Optional but strongly recommended, $500–$1,000

1. Lower your rate by 0.5–1%+
2. Remove PMI at 20% equity
3. Shorten loan term (30 to 15 year)
4. Cash-out equity for renovations
5. Switch from ARM to fixed rate
6. Remove FHA MIP by refinancing to conventional

Calculate: Closing costs ÷ Monthly savings = Break-even months

• Conventional: No official wait but lenders want 6–12 months history
• FHA: 210 days + 6 payments made
• VA IRRRL: 210 days from closing
• Cash-out refinance: Usually 6–12 months on any loan type

Borrow more than you owe and receive the difference in cash. Example: $200,000 owed on a $300,000 home — borrow up to 80% ($240,000), receive $40,000 cash.

Common uses: Home improvements, debt consolidation, investment property down payment.

Requirements: 20% equity remaining, 620+ credit, DTI under 43–50%, appraisal required.

Learn more or contact me to discuss your options.