Michigan Mortgage Payment Estimator

Your property taxes are set by the millage rates voted in your city or township and school district, applied to your home's taxable value. Most lenders collect one-twelfth of the estimated annual tax bill each month as part of your mortgage payment, hold it in an escrow account, and pay the tax bills from that account when they come due. So your monthly payment is principal and interest, plus one-twelfth of your annual property taxes, plus one-twelfth of your homeowner's insurance — plus mortgage insurance or HOA dues if they apply to your loan.

Because of Proposal A. While a seller owns a Michigan home, Proposal A caps how much the home's taxable value can grow each year. When the home sells, that cap comes off: in the year after the transfer, the taxable value "uncaps" up to the state equalized value, which reflects current market value. Your first-year tax bill is therefore often higher than the seller's last bill — even at the same millage rates — and budgeting from the seller's old tax bill is one of the most common Michigan homebuying mistakes. Ask for the property's state equalized value and confirm the picture with the local assessor before you buy.

The Principal Residence Exemption (PRE) exempts a home you own and occupy as your principal residence from the school operating millage — up to 18 mills. You claim it by filing a Principal Residence Exemption affidavit with your local assessor, typically right after you buy and move in. Because second homes and investment properties do not qualify, they are taxed more than an owner-occupied home on the same street — one reason the estimator on this page asks you to enter the tax figure for the specific property and occupancy rather than assuming a rate.

It depends on the loan program, not the state. As typical guidelines that vary by lender and borrower profile: conventional loans can start as low as 3% down for qualified buyers, FHA loans at 3.5% down, and VA loans at 0% down for eligible veterans and service members. Larger down payments lower the loan amount and the monthly payment, and putting 20% down on a conventional loan avoids private mortgage insurance. Michigan also has homebuyer assistance programs, including state housing programs, whose terms change over time. Adam DeCraene shops 175 wholesale lenders and can check which programs and assistance options you qualify for.

Both, in a sense. Many Michigan communities issue property tax bills in two cycles — a summer bill and a winter bill — with due dates that vary by community. But if you have a mortgage with an escrow account, you do not write those checks yourself: your lender or loan servicer collects one-twelfth of the estimated annual taxes with each monthly mortgage payment and pays the summer and winter bills from your escrow account when they come due. That is why your monthly payment already has taxes built in even though the bills themselves arrive twice a year.