Mortgage rates are a hot topic for homebuyers, whether you’re in West Michigan, metro Detroit, or across the U.S. These rates shape your monthly payments and the total cost of your home, making how mortgage rates work a must-know topic. At Priority Home Mortgage, we serve clients nationwide, and we’re here to simplify understanding mortgage rates so you can buy with confidence, from Traverse City to beyond.

What Determines Mortgage Rates?

Mortgage rates are driven by:

• Economic Factors: Federal Reserve policies, inflation, and bond markets set the foundation. Strong economies often push rates up.
• Credit Score: Scores above 740 typically secure lower rates.
• Loan Type and Term: Conventional, FHA, or 15-year vs. 30-year loans carry different rates.
• Down Payment: Larger down payments often yield better rates.

A strong credit score could save you 0.5% on a Michigan loan, cutting costs significantly.

Fixed vs. Adjustable-Rate Mortgages

You’ll choose between fixed vs. adjustable mortgage rates:

• Fixed-Rate Mortgages: Rates stay constant, offering stability. Great for long-term owners in steady markets like West Michigan.
• Adjustable-Rate Mortgages (ARMs): Lower initial rates that adjust later, ideal for short-term owners.

For a $250,000 home, a 30-year fixed rate at 6.5% means $1,580/month (principal and interest). An ARM at 5.5% starts at $1,420 but could rise. Choose based on your plans.

How Rates Affect Your Mortgage

How are mortgage rates determined impacts your finances:

• Monthly Payments: A 1% rate hike on a $300,000 loan adds $180/month.
• Total Interest: That 1% could add $65,000 over 30 years.
• Affordability: Higher rates may limit your loan size.

In Michigan, where median prices range from $275,000 in West Michigan to higher in Ann Arbor, rates are critical.

Timing the Market: Should You Wait?

With current mortgage rate trends shifting, waiting for lower rates is tempting but risky:

• Unpredictable Rates: No one can predict significant drops.
• Rising Prices: Michigan home prices could climb, offsetting rate savings.
• Rate Locks: Priority Home Mortgage offers locks to protect against rises.

Refinancing later is an option if rates drop.

Tips for the Best Rate

• Improve Credit: Pay down debt to boost your score.
• Shop Around: Compare lenders—Priority Home Mortgage finds competitive rates.
• Buy Points: Pay upfront to lower your rate.
• Choose Wisely: Shorter terms often have lower rates.

Why Rates Matter

Michigan’s market varies, from West Michigan’s growth to Detroit’s revival. A good mortgage rate can:

• Make homes affordable.
• Free up funds for renovations.
• Strengthen offers in competitive areas.

Nationwide, rates shape every homebuying journey.

Ready to Find Your Best Rate?

Understanding mortgage rates empowers you, whether in West Michigan, across Michigan, or beyond. Priority Home Mortgage helps you secure the best terms for your dream home.

Contact us at by email or call (616) 951-1561 to explore your options. Your home is within reach!

Disclaimer: Information provided is for educational purposes. Consult a mortgage professional for personalized advice.