Buying a home in Troy, Michigan, or considering refinancing your current mortgage? Choosing the right financing can make a significant difference in your monthly payment, upfront costs, and long-term financial goals.

Troy is one of Oakland County’s established communities, offering a mix of residential neighborhoods, condominium developments, established homes, and newer construction. Its location, employment opportunities, shopping, and access to major roadways make it attractive to many home buyers.

But finding the right home is only part of the process.

Choosing the right mortgage is just as important.

Whether you’re a first-time home buyer, moving into a larger home, purchasing a condominium, relocating for work, or exploring your home’s equity, understanding your mortgage options can help you make a more informed decision.

At BrightSide Lending, we help Troy home buyers and homeowners compare financing options based on their actual financial situation rather than assuming one mortgage program is right for everyone.

This 2026 guide explains the mortgage programs available to qualified Troy buyers, how the approval process works, what costs to anticipate, and how working with a Michigan mortgage broker can help you navigate the process.

Why Choose a Local Mortgage Broker in Troy, Michigan?

One of the first decisions you’ll make when financing a home is whether to work with a bank, direct lender, or mortgage broker.

While each can provide mortgage financing, they don’t necessarily operate the same way.

A traditional bank generally offers mortgage products through its own lending operation.

A mortgage broker works with wholesale lending partners to help borrowers obtain financing based on their qualifications and available loan programs.

At BrightSide Lending, we take a personalized approach to mortgage financing.

Instead of treating every borrower as though they fit the same profile, we evaluate factors such as:

• Credit history and credit scores
• Income and employment
• Monthly debt obligations
• Available down payment
• Assets and financial reserves
• Property type
• Homeownership goals
• Expected length of ownership
• Current mortgage rates and available loan structures

For example, a Troy buyer with excellent credit and 20% down may benefit from a different mortgage structure than a first-time buyer purchasing with 3% down.

Likewise, a self-employed borrower may need a different approach than someone receiving a regular salary.

The goal isn’t simply to obtain a mortgage approval. It’s to find financing that makes sense for your situation.

If you’re comparing lenders, our guide to working with a mortgage broker versus a bank in Michigan explains the differences in greater detail.

What Types of Mortgage Loans Are Available in Troy, Michigan?

Troy home buyers may have several financing options depending on their qualifications, property, and intended occupancy.

Some of the most common include Conventional, FHA, and VA loans, along with specialized financing for certain borrowers and property types.

Mortgage Program	Potential Advantages	Common Buyer Profile
Conventional	Low-down-payment options, flexible property financing, potentially removable PMI	Buyers with qualifying credit and income
FHA	Low down payment and flexible underwriting	Buyers needing additional credit or qualification flexibility
VA	Potential zero down and no monthly mortgage insurance	Eligible veterans and service members
Jumbo	Financing for larger loan amounts	Buyers purchasing higher-priced homes
Bank Statement	Alternative income documentation	Eligible self-employed borrowers
Renovation	Financing for eligible improvements	Buyers purchasing homes needing repairs
Bridge Loan	Potential access to equity before selling	Homeowners buying their next property

Not every program is available to every borrower, and qualification requirements vary.

Let’s look at the major options Troy buyers should understand.

Conventional Loans in Troy, Michigan

Conventional mortgages are among the most widely used financing options for home purchases.

Many Conventional loans follow guidelines established by Fannie Mae or Freddie Mac.

One of the biggest misconceptions about Conventional financing is that buyers must have a 20% down payment.

That isn’t necessarily true.

Certain qualified borrowers may be eligible for Conventional financing with as little as 3% down.

Conventional loans can be particularly attractive for buyers who have:

• Strong credit profiles
• Stable qualifying income
• Manageable monthly debts
• Available savings
• Plans to purchase a primary residence, second home, or investment property

Another important advantage involves mortgage insurance.

When Conventional private mortgage insurance (PMI) is required, it may eventually be canceled or automatically terminate once applicable requirements are satisfied.

This differs from FHA mortgage insurance, which may remain for the life of the loan depending on the original loan structure.

For a more detailed explanation, explore our Conventional loan options in Michigan.

FHA Loans for Troy Home Buyers

FHA loans are insured by the Federal Housing Administration and can provide additional flexibility for qualifying borrowers.

They are often associated with first-time home buyers, but FHA financing isn’t limited to people purchasing their first home.

Qualified repeat buyers can also use FHA loans.

One of the program’s biggest advantages is the potential to purchase a primary residence with as little as 3.5% down.

FHA financing may be worth considering when:

• Credit scores are lower
• A borrower has experienced previous credit challenges
• Debt-to-income ratios are higher
• The buyer has limited funds available for a down payment
• Conventional loan pricing or underwriting is less favorable

However, FHA financing includes mortgage insurance costs that should be considered when comparing programs.

A borrower who qualifies for both FHA and Conventional financing shouldn’t automatically assume FHA is better simply because it offers flexible qualification guidelines.

Our Michigan FHA loan guide explains the program in greater detail.

We also published a comprehensive FHA vs. Conventional loan comparison to help Michigan buyers understand how the two programs differ.

VA Home Loans in Troy, Michigan

For eligible veterans, active-duty service members, and certain surviving spouses, VA financing can offer substantial advantages.

One of the most significant benefits is the possibility of purchasing a primary residence with no required down payment, assuming sufficient VA entitlement and other qualification requirements are met.

VA loans also do not require monthly mortgage insurance.

This can make VA financing especially attractive for eligible borrowers who want to preserve savings or minimize upfront expenses.

Additional potential benefits include:

• Competitive mortgage pricing
• Flexible underwriting characteristics
• No monthly PMI
• Reusable VA home loan benefits in qualifying circumstances
• Potential VA funding-fee exemptions for certain eligible borrowers

VA loans aren’t limited to first-time home buyers.

And being eligible for VA financing doesn’t necessarily mean it’s automatically the best choice.

A comparison of available mortgage programs can still be worthwhile.

Learn more in our VA home loan guide for Michigan or review our FHA vs. VA loan comparison.

Jumbo Loans for Higher-Priced Homes in Troy

Some Troy home buyers may need financing that exceeds the conforming loan limit applicable to their property.

These mortgages are commonly referred to as jumbo loans.

Jumbo financing can be relevant when purchasing higher-priced properties, particularly when the desired loan amount exceeds standard conforming limits.

Depending on the lender and loan structure, jumbo mortgages may involve different requirements for:

• Credit scores
• Down payment
• Debt-to-income ratio
• Cash reserves
• Income documentation
• Property appraisal

Not every higher-priced Troy home requires a jumbo loan. The determining factor is generally the loan amount relative to the applicable conforming limit, not simply the purchase price.

Before assuming you need jumbo financing, it’s worth comparing the available loan structures.

Mortgage Options for Self-Employed Buyers in Troy

Troy has a substantial business and professional community. The city’s economic profile includes corporate offices, engineering, technology, and other business activities.

City of Troy+1

For business owners, independent contractors, and self-employed professionals, mortgage qualification can be more complicated than it is for a traditional salaried employee.

That’s because lenders generally need to establish qualifying income, which isn’t always the same as gross business revenue.

For example, a self-employed borrower may earn substantial revenue but report a lower amount of qualifying income after business deductions.

Traditional mortgage programs may use tax returns and other financial documentation to determine eligibility.

In certain circumstances, alternative programs such as bank statement loans may provide another financing option for qualified borrowers.

These programs may evaluate eligible bank deposits rather than relying exclusively on traditional tax-return income calculations.

However, bank statement mortgages have their own underwriting, down payment, credit, and pricing requirements.

Being self-employed doesn’t automatically mean you need a nontraditional mortgage.

We should evaluate traditional financing first, then consider alternatives when appropriate.

Understanding Troy’s Housing Market and Property Types

One of the advantages of buying a home in Troy, Michigan, is the variety of housing options available.

Unlike communities dominated by one particular style of development, Troy offers a combination of established subdivisions, larger single-family homes, condominiums, townhomes, and newer residential construction.

For mortgage purposes, these differences matter.

The type of property you purchase can influence your financing options, appraisal requirements, down payment, and monthly housing expenses.

For example, financing a detached single-family residence is not always the same as financing a condominium.

Likewise, buying an older home that needs substantial improvements may require a different approach than purchasing a newly constructed property.

Before making an offer, buyers should understand how the property’s characteristics may affect their mortgage approval.

Established Neighborhoods and Older Homes

Many Troy neighborhoods feature homes built decades ago, including ranches, colonials, and other traditional suburban designs.

Established homes may offer mature landscaping, larger lots, and locations convenient to Troy’s major roads and business districts.

However, older properties sometimes come with additional considerations.

These may include:

• Aging roofs, heating systems, or other major components
• Previous additions or renovations
• Deferred maintenance
• Outdated electrical or plumbing systems
• Potential appraisal or property-condition concerns

Not every older home creates a mortgage issue.

However, significant safety, soundness, or structural concerns may need to be addressed before certain loans can close.

This is particularly important when using government-backed financing.

A home that needs cosmetic updates is very different from one with significant safety or structural problems.

Buyers considering an older Troy property should understand the difference between a mortgage appraisal and a professional home inspection.

Our guide to mortgage appraisals versus home inspections in Michigan explains why both can matter.

Buying a Condominium in Troy, Michigan

Condominiums can appeal to buyers who prefer reduced exterior maintenance, smaller properties, or a different ownership arrangement than a traditional single-family home.

But condominium financing involves some additional considerations.

When you purchase a condo, the lender may need to evaluate both your personal qualifications and the condominium project itself.

Depending on the mortgage program, the lender may review:

• Homeowners association financial information
• Association insurance coverage
• HOA dues
• Pending litigation
• Deferred maintenance
• Special assessments
• Owner-occupancy or other project characteristics
• Whether the project meets applicable agency or lender requirements

Some condominium projects qualify for Conventional financing but may not meet FHA or VA project requirements without additional review or approval.

Other projects may have financing options available through specific lenders.

How HOA Dues Affect Mortgage Qualification

One issue condo buyers sometimes overlook is the impact of homeowners association dues.

Even if an HOA covers exterior maintenance, landscaping, or certain utilities, the monthly dues generally count toward your housing expense when qualifying for a mortgage.

Consider this simplified example:

Monthly Expense	Single-Family Home	Condominium
Principal and interest	$2,000	$1,850
Property taxes	$500	$450
Homeowners insurance	$150	$75
HOA dues	$0	$350
Total monthly housing expense	$2,650	$2,725

Illustrative figures only. Actual expenses vary by property, financing, insurance coverage, and association.

Although the condominium has a lower principal and interest payment, its total monthly housing expense is higher in this example.

That doesn’t necessarily make it a worse purchase. HOA dues may cover expenses the single-family homeowner would otherwise pay separately.

But it demonstrates why buyers should compare the entire housing payment rather than looking only at the mortgage.

BrightSide Lending Tip: Before making an offer on a Troy condominium, ask your mortgage professional to review the project’s financing eligibility and anticipated HOA expenses.

This can help identify potential problems before you’re too far into the transaction.

Troy School District Boundaries: What Home Buyers Should Know

School district boundaries are an important consideration for many Troy home buyers.

One detail that surprises some buyers is that a Troy mailing address does not automatically mean the property is located within Troy School District.

The City of Troy includes properties served by multiple school districts, including Troy, Avondale, Birmingham, and others.

Troy School District specifically advises buyers to verify school district boundaries for individual properties rather than relying solely on an address or general map.

Troy School District+1

This distinction can matter for several reasons.

First, buyers who have a specific school district preference need to verify the property before purchasing.

Second, school district boundaries can affect property tax millage rates.

Third, school district assignments may be an important consideration when evaluating the property’s suitability for a buyer’s needs.

How to Verify a Troy Property’s School District

Before purchasing, buyers should confirm the assigned school district using official property records.

The Troy School District boundary maps are a useful starting point.

For confirmation of a specific property’s district, buyers can also contact the City of Troy Assessing Department.

Do not rely exclusively on a real estate listing’s school information.

The correct district should be verified using the property’s actual location and official records.

Property Taxes in Troy, Michigan: Why Your Payment May Change After Buying

Property taxes are one of the most important expenses to understand when purchasing a home in Troy.

And Michigan has a property tax system that can create surprises for buyers who rely on the seller’s current tax bill.

Michigan’s Property Tax Uncapping Rules

Michigan generally limits annual increases in a property’s taxable value while the same owner holds the property.

However, when a qualifying transfer of ownership occurs, the taxable value generally becomes uncapped in the calendar year following the transfer.

The new taxable value is then determined under Michigan’s property tax rules.

This means the property taxes paid by the current owner may not accurately represent what the next owner will pay.

Michigan

Example: Why the Seller’s Taxes Can Be Misleading

Imagine you’re purchasing a home in Troy for $450,000.

The seller has owned the property for 20 years, and the current taxable value is significantly below the property’s current market value.

After a qualifying sale, the property’s taxable value may increase substantially in the following calendar year.

For illustration:

	Current Owner	New Owner Estimate
Taxable value	$125,000	$225,000
Illustrative millage rate	30 mills	30 mills
Estimated annual property taxes	$3,750	$6,750
Monthly equivalent	$312.50	$562.50

These are hypothetical figures, not a tax estimate for a specific Troy property. The new taxable value is not automatically half the purchase price, and actual millage rates depend on the property’s taxing jurisdictions and exemptions.

In this example, the buyer’s annual property tax obligation increases by $3,000.

That’s an additional $250 per month.

For a buyer already working within a specific monthly budget, that difference matters.

Troy Property Taxes Vary by School District

The City of Troy publishes property tax millage information showing different rates based on school district and principal residence exemption status.

The total rate includes applicable school, city, county, and other authorized millages.

City of Troy, Michigan

That means two similarly priced homes in Troy may have different property tax obligations.

Before purchasing, buyers should review the property’s tax information and estimate what taxes could look like after the transfer.

What Is Michigan’s Principal Residence Exemption?

Michigan’s Principal Residence Exemption (PRE) can reduce certain school operating taxes for eligible homeowners who own and occupy a property as their principal residence.

The exemption does not eliminate all property taxes.

Eligibility depends on meeting applicable ownership, occupancy, and filing requirements.

Michigan

Buyers should verify that the appropriate exemption is in place and understand any filing obligations after purchasing.

Why This Matters for Your Mortgage

Mortgage lenders generally consider property taxes when calculating a borrower’s housing payment and debt-to-income ratio.

Even if your principal and interest payment is affordable, higher-than-anticipated taxes can change your overall budget.

At BrightSide Lending, we believe buyers should understand their anticipated total housing payment before committing to a purchase.

For additional information about how taxes and insurance affect your payment, read our Michigan mortgage escrow account guide.

First-Time Home Buyer Programs in Troy, Michigan

Buying your first home can feel overwhelming, especially when you’re trying to understand how much money you’ll need upfront.

One of the most common misconceptions is that purchasing a home requires a 20% down payment.

In reality, qualified first-time buyers may have several options.

Depending on the loan program and borrower qualifications, potential options include:

• Conventional financing with as little as 3% down
• FHA financing with as little as 3.5% down
• VA financing with no required down payment for eligible borrowers
• Certain down payment assistance programs
• Eligible gift funds from family members
• Seller concessions to help cover allowable closing costs

How Much Money Do You Need to Buy a Home in Troy?

Let’s use a hypothetical $350,000 home purchase.

Down Payment Option	Down Payment
Conventional at 3%	$10,500
FHA at 3.5%	$12,250
Conventional at 5%	$17,500
Conventional at 10%	$35,000
Conventional at 20%	$70,000

These figures represent only the down payment.

Buyers should also budget for closing costs, prepaid property taxes, homeowners insurance, initial escrow deposits, and other applicable expenses.

Some of these costs may be offset through eligible seller concessions, lender credits, gift funds, or assistance programs.

The important point is that you may not need as much money upfront as you think.

Down Payment Assistance for Troy Buyers

Some Michigan home buyers may qualify for down payment assistance based on their income, credit, purchase price, location, and the program’s specific requirements.

Assistance isn’t automatically available to every buyer, and funding or program guidelines can change.

At BrightSide Lending, we can review the assistance options available through our lending partners and help determine whether one fits your situation.

It’s also important to understand whether assistance is structured as a grant, forgivable loan, or repayable second mortgage.

For additional information, visit our Michigan down payment assistance guide.

Buying New Construction in Troy, Michigan

New construction can offer buyers modern floor plans, energy-efficient features, updated building materials, and the opportunity to personalize certain aspects of their home.

However, financing new construction can involve different considerations than purchasing an existing property.

For example, buyers should understand:

• Whether the home is already completed or still under construction
• The anticipated completion date
• Whether a construction-to-permanent loan is necessary
• How appraisal requirements will be handled
• What happens if construction is delayed
• Whether the builder offers financing incentives
• How property taxes may change after construction is completed

Should You Use the Builder’s Preferred Lender?

Some builders offer incentives when buyers use a preferred mortgage company.

These incentives might include contributions toward closing costs, upgrades, or temporary interest rate reductions.

They can be valuable, but buyers should compare the full financing package.

A builder incentive doesn’t automatically mean the preferred lender offers the best overall mortgage.

Compare the interest rate, annual percentage rate (APR), lender fees, discount points, cash required at closing, and long-term payment.

A larger upfront incentive isn’t always the better financial deal.

Our article on why the lowest mortgage rate isn’t always the best choice explains why the complete financing structure matters.

Understanding Mortgage Affordability in Troy

One of the biggest mistakes buyers can make is focusing exclusively on the maximum purchase price a lender approves.

Mortgage approval and comfortable homeownership aren’t necessarily the same thing.

A lender evaluates your ability to repay the mortgage based on qualifying income, debts, credit, assets, and other underwriting requirements.

But only you can determine how a monthly payment fits into your broader financial goals.

Before purchasing, consider:

• Your total anticipated housing payment
• Property taxes after purchase
• Homeowners insurance
• HOA dues, if applicable
• Maintenance and repair expenses
• Retirement savings
• Emergency reserves
• Other family and financial obligations

A buyer who qualifies for a $500,000 home may decide that purchasing a $425,000 property provides greater financial flexibility.

That’s not necessarily a missed opportunity.

It may be the smarter long-term decision.

Understanding your debt-to-income ratio when applying for a mortgage is an important part of that process.

Buying a Home in Troy Before Selling Your Current Home

For many Troy home buyers, purchasing a new property isn’t their first experience with homeownership.

They may already own a home in Rochester Hills, Sterling Heights, Shelby Township, Macomb Township, or another Metro Detroit community.

Perhaps they’re looking for a larger home, moving closer to work, downsizing, or simply finding a property that better fits their lifestyle.

One of the biggest challenges these buyers face is deciding whether to sell their current home before purchasing their next one.

What if you find the perfect home in Troy before your existing property sells?

Fortunately, selling first isn’t always your only option.

Depending on your financial situation, current mortgage, available equity, and qualifications, several financing strategies may be available.

Option 1: Sell Your Current Home Before Buying

Selling your existing home first is often the simplest approach financially.

Potential advantages include:

• Knowing exactly how much equity you’ll receive from the sale
• Eliminating the existing mortgage payment
• Having funds available for your next down payment
• Potentially simplifying mortgage qualification
• Reducing the risk of carrying two properties

However, selling first also creates challenges.

You may need temporary housing, additional moving arrangements, or a negotiated occupancy period after closing.

And if you haven’t found your next home, you could feel pressured to purchase something that isn’t your ideal fit.

Option 2: Buy Before Selling Your Existing Home

Some qualified borrowers can purchase their next home while continuing to own their current residence.

This may be possible when the borrower has sufficient income, assets, credit, and qualifying capacity.

For example, a homeowner might qualify to carry both mortgage payments temporarily.

In certain circumstances, agency guidelines may also permit the existing residence’s housing payment to be excluded or offset when specific requirements are met.

However, these exceptions are not automatic and depend on the loan program, documentation, and applicable underwriting rules.

Our guide explaining how to buy a home before selling your current home explores these strategies in greater detail.

Option 3: Use a Bridge Loan

A bridge loan may help certain homeowners access equity in their existing property before it sells.

This can be particularly useful when a homeowner has substantial equity but needs funds for the next purchase.

For example, imagine you own a home worth approximately $400,000 with a remaining mortgage balance of $150,000.

You have roughly $250,000 in gross equity.

However, that doesn’t mean all $250,000 is immediately available.

The amount you could potentially access depends on the property’s value, existing liens, lender requirements, financing structure, and associated costs.

A bridge loan may provide access to a portion of that equity to help facilitate your next purchase.

Bridge financing can involve additional fees, interest expense, repayment obligations, and risks if your existing home takes longer than expected to sell.

It isn’t appropriate for every borrower.

For a detailed explanation, read our complete guide to bridge loans in Michigan.

Option 4: Consider a HELOC or Home Equity Loan

Another possibility is accessing equity through a home equity line of credit (HELOC) or home equity loan.

A HELOC generally provides a revolving credit line secured by your home, while a home equity loan typically provides a lump sum with a defined repayment structure.

Depending on the lender and circumstances, these funds may be used toward an eligible down payment or other purchase-related expenses.

However, borrowing against your existing home creates additional debt and may affect your ability to qualify for the next mortgage.

It’s important to evaluate the complete transaction rather than assuming that accessing equity automatically solves the financing challenge.

BrightSide Lending Tip: If you’re planning to buy a home in Troy while still owning another property, discuss your financing strategy before listing your current home or making an offer.

There may be options worth exploring that you haven’t considered.

Getting Preapproved for a Mortgage in Troy, Michigan

Before seriously shopping for a home in Troy, one of the most important steps is obtaining a mortgage preapproval.

A preapproval helps establish an estimated purchase price range and gives you a clearer understanding of your financing options.

It can also help demonstrate to sellers that you’ve taken meaningful steps toward obtaining mortgage financing.

What Does a Mortgage Preapproval Involve?

A mortgage preapproval typically includes reviewing several aspects of your financial situation.

These may include:

• Credit history and scores
• Employment and income
• Existing monthly debts
• Bank accounts and available assets
• Down payment funds
• Mortgage program eligibility
• Other relevant financial circumstances

Depending on the situation, additional documentation may be necessary.

For example, a self-employed borrower may need to provide tax returns and business financial records.

A borrower receiving commission, overtime, or bonus income may need additional employment and earnings documentation.

The goal is to identify potential qualification issues early.

Prequalification vs. Preapproval

Although the terms are sometimes used interchangeably, there can be an important distinction.

A prequalification may be based primarily on information provided by the borrower.

A preapproval generally involves a more detailed review of credit, income, assets, and other qualifying factors.

However, terminology and review standards vary by lender.

Neither represents an unconditional commitment to lend.

Final approval generally remains subject to underwriting, acceptable property documentation, appraisal requirements, and other applicable conditions.

Why Preapproval Matters in Troy

Imagine finding a home that checks nearly every box.

The location is right, the layout works, and the asking price appears to fit your budget.

But without understanding your mortgage qualifications, you may not know whether the property is realistically affordable.

A preapproval can help you make a more informed offer.

It can also help your real estate agent structure the transaction around your financing needs.

A strong preapproval isn’t just about getting a letter. It’s about understanding the financing behind that letter.

How Much Are Closing Costs When Buying a Home in Troy?

Your down payment is only one component of the money needed to purchase a home.

Buyers should also understand closing costs and prepaid expenses.

Common expenses may include:

• Lender-related fees, if applicable
• Appraisal fees
• Credit report fees
• Title insurance and settlement charges
• Recording fees
• Prepaid mortgage interest
• Homeowners insurance
• Initial escrow deposits
• Other applicable transaction expenses

Actual costs vary based on the property, loan amount, mortgage program, lender, and transaction structure.

Example: Purchasing a $400,000 Home in Troy

Consider a qualified buyer purchasing a $400,000 primary residence using Conventional financing with 5% down.

Expense	Illustrative Amount
Purchase price	$400,000
Down payment (5%)	$20,000
Base loan amount	$380,000
Illustrative closing costs and prepaid expenses	$8,000 to $16,000
Estimated total before credits	$28,000 to $36,000

This is an illustration, not a loan estimate or quote. Actual expenses can be higher or lower, and the example excludes any applicable earnest money already paid.

The buyer may not necessarily need to bring the entire illustrated amount to closing.

Depending on the transaction, allowable seller concessions, lender credits, gift funds, or other eligible assistance may reduce the amount required from the buyer.

Can the Seller Pay Some of Your Closing Costs?

Yes, in many transactions, sellers can contribute toward eligible buyer closing costs.

These contributions are often called seller concessions.

However, allowable contributions depend on the mortgage program, occupancy, loan-to-value ratio, and other applicable requirements.

Seller concessions generally cannot be used to satisfy the buyer’s required down payment.

For example, a buyer might negotiate a $5,000 seller contribution toward allowable closing expenses.

That could preserve some of the buyer’s savings for moving expenses, furnishings, or emergency reserves.

However, buyers should evaluate the entire offer.

A higher purchase price combined with seller concessions isn’t automatically a better deal than a lower purchase price without concessions.

For a more detailed breakdown, review our Michigan mortgage closing costs guide.

Understanding the Mortgage Process From Application to Closing

Once your offer is accepted, the mortgage process moves into a more detailed phase.

Although each transaction is different, most purchase mortgages follow a similar progression.

Step 1: Complete Your Mortgage Application

Your lender or mortgage broker collects the information necessary to process your application.

This includes income, assets, liabilities, employment, and property details.

You may also receive required disclosures outlining the proposed loan terms and estimated costs.

Step 2: Review Your Loan Estimate

For most covered mortgage transactions, lenders must provide a Loan Estimate within three business days after receiving an application as defined by applicable regulations.

The Loan Estimate provides important information about your proposed financing, including:

• Loan amount
• Interest rate
• Estimated principal and interest payment
• Estimated closing costs
• Estimated cash to close
• Applicable mortgage insurance
• Other important loan terms

Buyers should carefully review this document and ask questions about anything they don’t understand.

Step 3: Order the Appraisal

Most purchase mortgages require an appraisal or another acceptable valuation method, although certain transactions may qualify for an appraisal waiver or alternative.

An appraisal helps the lender evaluate the property’s value.

It does not replace a professional home inspection.

The appraisal process may also identify property-condition issues that must be addressed under the applicable mortgage program.

Step 4: Mortgage Underwriting

During underwriting, the lender evaluates the borrower and property to determine whether the loan meets applicable requirements.

Underwriters may request additional documentation or clarification.

For example, they might ask about:

• Large deposits
• Employment history
• Variable income
• Existing debts
• Gift funds
• Property conditions
• Insurance coverage

A request for additional documentation doesn’t necessarily mean something is wrong.

It may simply be necessary to complete the review.

Our Michigan mortgage underwriting guide explains what borrowers can expect.

Step 5: Clear to Close

Once the lender has satisfied the applicable underwriting conditions, the loan may receive a clear-to-close designation.

This generally means the lender is prepared to proceed toward closing, subject to any remaining requirements.

For most covered mortgages, the borrower must receive the Closing Disclosure at least three business days before consummation.

This document provides final loan terms and closing cost information.

Certain changes can trigger a new waiting period.

Step 6: Closing Day

At closing, you’ll review and sign the required documents, complete the necessary funds transfer, and finalize the purchase.

Ownership and possession arrangements depend on the purchase agreement and closing terms.

Once the transaction is completed and the applicable requirements are satisfied, you’ll be ready for the next chapter of homeownership.

Common Mortgage Mistakes Troy Home Buyers Should Avoid

Even financially well-qualified buyers can make mistakes during the mortgage process.

Here are several issues worth avoiding.

Making Large Purchases Before Closing

Buying furniture, financing a vehicle, or opening new credit accounts can affect your credit profile and debt-to-income ratio.

Even after receiving a preapproval, avoid taking on new debt without discussing it with your mortgage professional.

Changing Jobs Without Discussing the Impact

Changing employment doesn’t automatically disqualify you from obtaining a mortgage.

However, the type of employment change matters.

Moving from a salaried position to commission income or self-employment, for example, may create additional qualification requirements.

If you’re considering a job change, discuss it before making the transition.

Moving Money Between Accounts Without Documentation

Transferring funds between accounts isn’t necessarily a problem.

However, large deposits or transfers may require additional documentation to establish the source of funds.

Keeping clear records can help prevent unnecessary delays.

Underestimating Property Taxes

As discussed in Part 2, Michigan property taxes can change after a transfer of ownership.

Don’t assume the seller’s existing tax bill will accurately reflect your future tax obligation.

Choosing a Mortgage Based Only on the Interest Rate

The lowest advertised interest rate doesn’t always represent the lowest overall cost.

A mortgage with a slightly lower rate may involve additional discount points or other expenses.

Buyers should compare the full financing package, including the APR, closing costs, mortgage insurance, and expected length of ownership.

Frequently Asked Questions About Buying a Home in Troy, Michigan

How much do I need for a down payment on a house in Troy?

Some qualified buyers may purchase with as little as 3% down using certain Conventional programs or 3.5% down with FHA financing. Eligible VA borrowers may qualify for financing without a required down payment. Actual requirements depend on the borrower, property, and loan program.

Do I need a 20% down payment to buy a home in Troy?

No. Many mortgage programs allow qualified buyers to purchase with less than 20% down. However, a smaller down payment may affect mortgage insurance requirements, loan pricing, and monthly payments.

What credit score do I need to buy a home in Troy?

Credit score requirements vary by mortgage program and lender. Some borrowers may qualify for FHA financing with lower scores than are typically required for Conventional loans. Other factors, including income, assets, debts, and credit history, also affect approval.

Can I buy a home in Troy if I’m self-employed?

Yes. Self-employed borrowers can qualify for mortgage financing when they meet applicable requirements. Depending on their circumstances, they may qualify through traditional income documentation or certain alternative-income programs.

Can I buy a condominium in Troy with an FHA or VA loan?

Potentially. However, the condominium project must meet applicable program requirements, and additional approval or review may be necessary. Buyers should investigate condominium financing eligibility early in the transaction.

Will my property taxes increase after buying a home in Troy?

They may. Michigan’s taxable value uncapping rules can cause property taxes to increase following a qualifying transfer of ownership. Buyers should obtain an estimate based on their anticipated ownership rather than relying exclusively on the seller’s existing taxes.

Can I buy a house in Troy before selling my current home?

Possibly. Depending on your qualifications, you may be able to carry both mortgages, use eligible home equity financing, or explore bridge loan options. The best strategy depends on your current property, available equity, income, assets, and timing.

Should I use a bank or mortgage broker for my Troy home purchase?

Both can provide mortgage financing. A mortgage broker may offer access to multiple wholesale lending partners and different financing options. Buyers should compare service, available programs, loan terms, costs, and the experience of the mortgage professional handling their transaction.

How long does it take to close on a mortgage in Troy?

Closing timelines vary depending on the mortgage program, property, appraisal, underwriting, title work, and other transaction requirements. Many purchase mortgages can close in approximately 30 to 45 days, although some transactions close faster or take longer.

Can I refinance my current Troy home without moving?

Yes. Qualified homeowners may refinance to change their mortgage rate, adjust their loan term, consolidate eligible debt, or access equity through a cash-out refinance. Whether refinancing makes financial sense depends on current loan terms, available rates, closing costs, equity, and financial goals.

Do I have to live in Troy to work with BrightSide Lending?

No. BrightSide Lending serves qualified home buyers and homeowners throughout Michigan, including Troy, Rochester, Rochester Hills, Sterling Heights, Shelby Township, Macomb Township, and surrounding communities.

Why Work With BrightSide Lending for Your Troy Mortgage?

Choosing a mortgage professional is about more than finding someone who can quote an interest rate.

It’s about working with someone who understands how different loan programs work and can help you evaluate the financial implications of your decision.

At BrightSide Lending, we believe mortgage financing should be straightforward, transparent, and personalized.

Our approach focuses on understanding your situation, explaining available financing options, and helping you make an informed decision.

Whether you’re purchasing your first home in Troy, moving into a larger property, buying a condominium, or refinancing your existing mortgage, we’re here to help you navigate the process.

Local Michigan Mortgage Experience

BrightSide Lending is a Michigan-based mortgage brokerage serving Oakland County, Macomb County, and communities throughout the state.

With approximately 20 years of mortgage industry experience, our owner, Jeffrey Kaltz, brings extensive lending knowledge to the process.

We work with borrowers facing a wide range of financing situations, including:

• First-time home purchases
• Conventional, FHA, and VA financing
• Self-employed income
• Credit challenges
• Buying before selling
• Bridge loan strategies
• Home equity financing
• Mortgage refinancing

Our goal is to help borrowers understand their options rather than simply directing everyone toward the same loan program.

Personalized Guidance From Application Through Closing

Mortgage financing involves numerous decisions and deadlines.

At BrightSide Lending, you work directly with an experienced mortgage professional who remains involved throughout the process.

From your initial questions and preapproval to underwriting and closing, we focus on communication, education, and helping you understand what comes next.

We know that buying a home can be one of the largest financial decisions you’ll make.

You deserve clear answers and a mortgage strategy built around your needs.

Ready to Buy or Refinance a Home in Troy, Michigan?

Whether you’re beginning your home search, preparing to make an offer, or exploring refinancing opportunities, understanding your mortgage options is an important first step.

BrightSide Lending is here to help Troy home buyers and homeowners make informed financing decisions.

We can review your qualifications, compare available mortgage programs, estimate your monthly payment, and help you develop a strategy for your next move.

Don’t wait until you’ve found the perfect home to start understanding your financing.

Contact BrightSide Lending today to discuss your Troy, Michigan mortgage options.

Your homeownership goals deserve a brighter approach.