Understanding Your Mortgage Options in Troy, Michigan, in 2024

Mortgages can seem complex, but educating yourself puts you in control. This extensive guide will outline what you need to know about getting a home loan from Towne Mortgage in Troy, Michigan, in 2024.

A Brief History of Towne Mortgage

Founded in 1986, Towne Mortgage is a full-service independent mortgage banker with offices throughout Michigan. Over the past 38 years, they have helped thousands of homebuyers and homeowners secure financing. Towne Mortgage works with a variety of lending programs and has knowledgeable loan officers who can guide you through the process.


In the late 2010s, low-interest rates led to a booming housing market. Towne Mortgage’s business grew as more people took advantage of affordable home loans. However, the COVID-19 pandemic caused economic uncertainty in 2020. Mortgage rates dipped to record lows as the Federal Reserve took action to stimulate the economy. This created a surge in refinances as many homeowners looked to save on their monthly payments.

Towne Mortgage was well-positioned to help clients during this volatile period. Their local presence and experienced staff helped many navigate challenges like payment deferrals. By 2022, the economy was rebounding as vaccines became widely available. Housing demand remained strong while inventory remained low, putting upward pressure on home prices. Towne Mortgage continues adapting to changing market conditions to best serve southeast Michigan’s home buyers and owners.

Understanding the Mortgage Process

Now let’s review the basic steps for obtaining a home loan through Towne Mortgage:

  1. Get pre-approved. Speak to a loan officer who will check your credit, income, and debts and assess how much you can borrow.
  2. Shop for a home. A pre-approval letter gives you an edge as a buyer. Search within your approved loan amount.
  3. Make an offer. Your realtor will submit your signed purchase agreement, and the seller will review any counteroffers.
  4. Complete the application. Provide additional documentation for underwriting, like pay stubs, tax returns, and bank statements.
  5. Appraisal. An appraiser assesses the home’s fair market value, and it must match the purchase price.
  6. Underwriting approval. Loan documents are reviewed, and you may need to clear up any red flags.
  7. Closing. Sign papers, pay fees, and receive the keys to your new home!

Throughout this process, Towne Mortgage guarantees communication and quick responses to paperwork requests. Their goal is a smooth closing, typically within 30-45 days of applying. Now, let’s explore your financing options in more detail.

Types of Home Loans Available in 2024

There are several popular loan programs Towne Mortgage can consider based on your unique situation:


Conventional Loans – Not accredited by any government agency but have loosened requirements in recent years. Up to 20% down payment is common.

FHA Loans – Insured by the Federal Housing Administration, allowing 3.5% down on homes up to $548,250 in 2024. Slightly higher monthly mortgage insurance cost.

VA Loans – For qualified veterans and active military with no down payment required. VA funding fee varies from 0.5-3.6% of the loan amount.

USDA Loans – For rural and suburban homes with up to 100% financing available to qualified low/moderate buyers. Limited areas qualify.

Fixed-Rate Mortgages – Interest rate locked in for 15-30-year terms. Predictable payments but higher rates than adjustable.

Adjustable-Rate Mortgages – They often offer lower intro rates, but payments can increase sharply later if rates rise. Caps limit annual/lifetime increases.

Towne Mortgage can explore the home loan program that offers the best value for each customer’s long-term goals. The loan officer and processing team will guide you to a smart, affordable solution.

Comparing Mortgage Costs and Fees

To truly understand your monthly costs, it’s important to account for fees in addition to the interest rate:

Origination Fee – Up to 1% of the loan amount charged by a lender to cover administrative processing. Typically rolled into loan.

Discount Points – Voluntary extra fees are paid upfront to lower the interest rate in 0.125% increments. Each point % of the loan.

Appraisal Fee – $400-500 depending on the home’s value. Ensures property is worth what you’re paying.

Title Insurance – Protects lender and homeowner against legal issues with property ownership/liens. Varies by location.

** homeowners insurance, property taxes. Private mortgage insurance (PMI) also applies on conventional loans with less than 20% down until you reach 80% equity. Non-recurring closing costs typically range from 2-5% of the loan amount. When considering loan options, remember to factor in not just the monthly payment but all expenses to truly compare costs. Towne Mortgage provides clear estimates upfront.

Refinancing vs Purchasing

By 2024, rates will likely be higher than the historical lows seen in 2020-2021. So, for current homeowners, it’s worthwhile to see if refinancing makes financial sense. Some benefits of refinancing include:

  • Lower monthly payments by obtaining a better rate
  • Shortening loan term to pay off early
  • Consolidating high-interest debts onto mortgage
  • Removing private mortgage insurance
  • Accessing tax-deductible home equity

On the other hand, refinancing costs around 2-5% of the loan amount in fees all over again. So it only pays off if planning to stay put at least 2-3 years. Otherwise, transaction fees eat into savings.

For prospective buyers, now may be a great time if you’ve locked in a pre-approval before rates rise too much. Just make sure purchasing the home makes financial sense in the long term once accounting for closing costs, maintenance, and property taxes, too. Towne Mortgage is there to help weigh these important factors.

Taking Steps Now to Improve Your Odds in 2024

While it’s impossible to predict the future, you can put yourself in a stronger position with prep work now:

  • Boost your credit scores by paying bills on time and keeping credit card balances low
  • Reduce other debts to qualify for a larger loan amount
  • Build savings for a larger down payment or cushion against rising rates
  • Obtain a pre-approval letter before actively house hunting next year
  • Speak with a lender about requirements and qualifications early

Taking some proactive steps sooner gives you insight and puts you ahead of the crowd if you need to move quickly on a home. Towne Mortgage also offers homebuyer education workshops teaching budgeting, credit, and the full homeownership overview. Knowledge is power when it comes to major financial decisions.

Navigating Changing Conditions

From global events to shifts in monetary policy, 2024 could bring surprises that impact the mortgage industry. Towne Mortgage stays on top of macro changes and tailors service accordingly:

Rising Rates – If inflation remains high, expect multiple rate hikes in 2023, followed by increased stabilization in 2024. Locking a rate may require a longer lead time.

Recession Risks – Slowing economic growth could put downward pressure on home prices and demand. It may create buying/refinancing opportunities if rates stay reasonable.

Supply Constraints – Material shortages and high construction costs may continue limiting new home builds. Could keep existing homes scarce and prices firm, barring broader economic weakness.

Regulatory Updates – Government agencies periodically refine lending rules to promote sustainable, equitable access to credit over time. Regulations adapt to circumstances.

No matter the circumstances, Towne Mortgage’s experienced officers are ready to advise clients on maximizing home financing options. Flexibility and personalized service remain key strengths through changing times.

FAQs About Home Loans in 2024

Here are answers to some common questions:

What credit score do I need for a home loan in 2024?

Most conventional lenders require minimum credit scores of around 620. However, you’ll likely get the best loan terms, rates, and costs with a score of 660 or higher. FHA/VA/USDA programs may accept lower scores. Building your score now sets you up for success.

How much money do I need for closing costs?

Typical non-recurring closing fees range from 2-5% of the loan amount. On a $200,000 loan, plan to bring $8,000-$10,000 to cover these one-time settlement charges. Towne Mortgage can provide customized estimates based on your specific situation.

What documentation do lenders require for underwriting?

You’ll need recent pay stubs, W-2 forms, or tax returns to verify income, bank statements to verify assets/reserves, and documentation for any debts/liabilities. You may also provide letters of explanation for any credit issues or large deposits. The underwriter reviews everything to fully assess your ability to pay.

Can I get pre-approved over the phone or online?

Yes, Towne Mortgage offers convenient remote options to start the pre-approval process. You’ll need to provide some basic information over the phone or via a secure online form, and a loan officer can give you a pre-approval letter within 1-2 business days once they review your credit report and back-end debt ratios. For a fully underwritten approval, you’ll need to submit financial documentation in person or electronically. But getting pre-approved remotely allows active house hunting without the need for an in-office appointment right away.

How far in advance should I apply for a home loan?

Most experts recommend applying for your home loan at least 30-45 days before your target closing date. This gives the lender sufficient time to process your entire loan file, order necessary checks like the appraisal, and handle any issues that could arise during underwriting. Communicating proactively with your loan officer is key if you have a tight timeframe.


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