How Much Will Your Mortgage Be in Michigan?
The Great Lakes State of Michigan has a population of 10 million people and has seen consistent growth in the number of residents. It is ranked the tenth most-populous state in the U.S. and boasts an affordable housing market. In fact, the market has seen rapid growth over the years.
The average home experienced a surge in value of 9.3% in 2018 alone, and homes are averaging only a month on the market before they are purchased. Also, see FHA Loan in Michigan for details and requirements for a home in the state.
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Factors That Can Affect Your Michigan Mortgage Calculations
Home Prices in Michigan
The average home in Michigan sells for $170,100 with a median list price of $175,000 based on information collated in March 2020. However, prices throughout the state vary significantly. To live in Ann Harbor, buyers can expect to pay $355,900 on average for a home with a median list price of $399,900, compared to the neighboring city of Detroit where the typical home value is valued at $36,293.
Slightly north of Detroit is the town of Warren. The median home price here is $127,300 with an average listing of $115,000.
To the west of the state is the city of Grand Rapids. The market here is currently very hot with home values soaring 7.1% over the past year. The median price of homes is $185,000 with a close average list price of $184,400.
Property Taxes in Michigan
Property taxes will vary between counties. The median tax rate is 1.62% of a property’s assessed fair market value. Most Michigan residents pay property taxes of $2,145 per year.
Michigan Job Stats to Consider
Michigan's economy is quite diverse. However, the state is known for being the center of the automotive industry in the U.S., home to Renault, Peugeot, and Citroen. The upper peninsula receives a lot of tourism for its natural resources while the rest of the state boasts a healthy economy focusing on agriculture, services, manufacturing, and high-tech industries.
The median personal income in Michigan is $27,549 and per household, $56,697. Michigan’s income per capita is significantly less than the national average of $54,420. The unemployment rate is roughly the same as the national average of 3.7%, according to information gathered by U.S. Bureau of Labor Statistics.
Michigan has a flat income tax rate across the state, although some cities do charge an additional rate. The marginal tax rate in 2019 for single filers was 4.25% with an effective rate of 3.98%. Sales tax for the state sits at 6%.
Job Stats (Civilian Labor Force, Employment, Unemployment)
Other Michigan Costs That Can Affect Michigan Mortgage Calculations
Homeowners Insurance in Michigan
Homeowner’s insurance in Michigan is slightly less than the national average with a median cost of $1,073 per annum. Most insurance policies will cover theft, fire, smoke damage and more. Flood damage is not usually covered and can be purchased at an additional cost through the National Flood Insurance Program (NFIP) by FEMA. Flooding is America’s most common natural hazard and a policy to cover potential flood damage is an asset in Michigan due to the heavy rain the state can sometimes experience.
A few closing costs will be incurred when buying property in Michigan. While the amount will depend on location and the lender’s agreement, the average closing costs are between 2% to 5% of the home’s value.
A one-time title insurance purchase is typically paid for by the seller, but your lender will also require you to obtain a policy to protect the loan they are giving you. The cost is based on the purchase price of the home and protects your lender’s interest in the event of any future disputes with your title.
Real Estate Transfer Tax
Real estate transfer tax is charged by both the state of Michigan and the individual county at a percentage of the sale price of a home. It is customary for the seller to a pay real estate transfer tax unless negotiated with the buyer. The rate is $3.75 per every $500 of the home’s purchase price to the state, and an additional $0.55 for every $500 to the county. However, if the population of the county exceeds 2 million, the rate is set at $0.75 per $500.
A home inspection is a crucial step in the buying process. The average cost of an inspection in Michigan is between $289 and $350 for homes 2,000 square feet or greater. Prices will fluctuate depending on home size. Most general inspections assess the structure, plumbing, and electrical aspects of the home. For additional tests such as mold, radon or termite tests, expect to pay additional charges.