Compare mortgage rates in Mississippi.

Introduction to Mortgage Interest Rates

Mississippi’s mortgage landscape presents an array of opportunities for individuals seeking a home loan. With a thorough understanding of prevailing mortgage rates and loan types available, you can navigate the market effectively and secure favorable terms that align with your financial goals. Let’s start by better understanding how mortgage rates are decided on, since they are influenced by a complex interplay of economic factors and the borrower’s financial profile.

Where Mortgage Rates Come From

The Federal Reserve, often referred to as the Fed, holds the key to setting short-term interest rates that serve as a benchmark for banks and other lenders. While home loan rates are not directly tied to Fed rates, they tend to follow similar economic trends. When the Fed raises its interest rate, you’ll typically see an increase in mortgage rates in Mississippi as well.

But your personal financial situation — your credit score, how much of a down payment you plan to make, and other factors — also plays a role in what rate you’re offered (more on that below).

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How Interest Rates Affect Home Affordability

Mortgage rates can have a profound impact on home affordability. Even seemingly small fluctuations in the rate number can change the amount of your monthly payment. You might not feel this change in any given month. On a loan of $250,000 the increased cost of a percentage-point rate increase is around $130 per month. But in this example, over the life of a 30-year mortgage, the most common loan term, you can find yourself paying $40,000 more for your home. And many people are borrowing far more than $250,000.

Should Homebuyers Wait for Interest Rates to Drop?

If interest rates are so impactful, many homebuyers might wonder, shouldn’t you wait until they drop before starting the home search? Timing the market can be challenging. Waiting for a rate drop may save you money, but it could shortchange you in other ways. You might miss out on an attractive home, or a lower-priced real estate market. And you’ll definitely be delaying the opportunity to build equity in a home that you own.

Remember, you can always undertake a mortgage refinance if rates come down, potentially locking in a lower rate and reducing monthly payments. This flexibility allows homebuyers to make a purchase decision based on their current financial situation and explore refinancing options in the future.

Mississippi Mortgage Rate Trends

You might be curious about historical mortgage rate trends in Mississippi and how current rates compare. As you can see from the chart below, mortgage rates in Mississippi are not substantially different from rates that have been seen at some points in the past. (The Federal Housing Finance Agency stopped tracking the state average after 2018.)

Historical U.S. Mortgage Rates

To provide a broader context, it’s beneficial to examine historical U.S. mortgage rates over a period of several decades. Homebuyers who feel current rates are high might feel differently when they see the double-digit rates of the 1980s!

Factors Affecting Mortgage Rates in Mississippi

A multitude of factors influence mortgage rates in Mississippi and across the nation. Understanding them empowers homebuyers to make informed decisions and navigate the mortgage process effectively.

Economic Factors

Economic factors help shape mortgage rates. These include the Federal Reserve’s interest rate decisions, inflation levels, and unemployment rates

•  The Federal Reserve: The Fed’s decisions regarding short-term interest rates have a direct impact on mortgage rates, as noted above. When the Fed lowers its rates, it typically leads to a dip in mortgage rates as well.

•  Inflation: The general increase in prices of goods and services affects the cost of living and the overall economy, so no surprise that it might affect interest rates as well. Higher inflation rates can lead lenders to increase interest rates to cover costs.

•  Unemployment: When unemployment rates are high, the Fed might lower its rate to help spark more job creation. This may lead to lower mortgage rates as well. Of course, when unemployment is low, there may be more competition for available homes as buyers get into the market.

Consumer Factors

These things, unlike unemployment and inflation, are largely within the individual borrower’s control:

•  Credit score: A strong credit score, indicating a history of responsible borrowing and debt management, is viewed favorably by lenders. As a result, individuals with higher credit scores typically qualify for lower mortgage interest rates.

•  Down payment: A larger down payment reduces the loan amount required from the lender, lowering the overall risk associated with the loan. Consequently, lenders may offer lower interest rates to borrowers who make larger down payments.

•  Income and assets: The amount and reliability of a borrower’s income and the value of their assets are important indicators of the ability to repay a loan. Lenders may offer their best rates to those with a stable income and solid assets.

•  Type of mortgage loan: Different types of mortgage loan come with varying interest rates. Adjustable-rate mortgages (ARMs) often have lower initial rates compared to fixed-rate mortgages, while government-backed loans like VA mortgages may offer more favorable rates.

Types of Mortgages Available in Mississippi

Mississippi offers a diverse range of mortgage types to cater to the unique needs of different homebuyers. These options include fixed-rate mortgages, adjustable-rate mortgages, FHA loans, VA loans, USDA loans, and jumbo loans. Understanding the features of each loan type empowers homebuyers to make informed decisions.

Fixed-Rate Mortgage

Fixed-rate mortgages provide stability and predictability by locking in the interest rate for the entire loan term. Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years, allowing homebuyers to choose a term that aligns with their financial goals. Opting for a fixed-rate mortgage lets homebuyers safeguard themselves against potential interest rate fluctuations and enjoy peace of mind knowing their monthly payments will remain consistent.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) offer an initial period of lower interest rates, followed by periodic adjustments based on prevailing market conditions. This feature can be beneficial for homebuyers who plan to sell or refinance before the fixed-rate period ends. ARMs are also attractive to those who think interest rates will drop in the future. Homebuyers considering an ARM should carefully assess their financial situation and long-term plans to determine if this type of mortgage aligns with their risk tolerance and future goals.

FHA Loans

Backed by the Federal Housing Administration (FHA), FHA loans are designed to make homeownership more accessible to borrowers with limited financial resources or less-than-perfect credit. FHA loans offer more flexible credit and income requirements compared to conventional loans. They also allow for lower down payments, making them an attractive option if you are buying your first home or have limited savings (or both).

VA Loans

VA loans are exclusively available to eligible veterans, active-duty military members, Reserve and National Guard members, and surviving spouses, who must apply for and obtain a Certificate of Eligibility as their first step in the loan process. These loans offer competitive interest rates and do not require a down payment, making them an attractive option for eligible borrowers.

USDA Loans

The U.S. Department of Agriculture (USDA) backs USDA loans, ensuring the availability of affordable financing options for rural homebuyers whose income falls below a predetermined ceiling. These loans offer competitive interest rates and do not require a down payment, making them an excellent option for eligible individuals.

Jumbo Loans

Jumbo loans are designed for borrowers seeking to finance homes that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loans may come with higher interest rates compared to conventional loans due to the increased risk associated with larger loan amounts. And they often have more stringent requirements. If you need to borrow more than $832,750 in Mississippi, you’ll want to ask your lender about a jumbo loan.

Popular Places to Get a Mortgage in Mississippi

Securing a mortgage often depends on choosing a location where home prices are affordable. Understanding how the cost of living in the U.S. varies by state, and even within states, can be helpful. Mississippi ranks 46th on the cost-of-living index for U.S. states, so it is a more affordable place to live. But there are highs and lows within the state.

Least Expensive Locations

•   Gulfport: This is one of the state’s lower cost-of-living areas, and the average home value here according to Zillow is $190,430.

•   Long Beach: A relatively affordable home with nearby beach access can be hard to find. Consider Long Beach, where the average home value is $224,646.

•   Bay St.Louis: Another town near the water, this one has an average home value of $240,237.

•   Pascagoula On the east end of the Mississippi Gulf Coast, this small city has an average home value of $138,822.

Most Expensive Locations

While some areas in Mississippi offer lower housing costs, others may have higher price tags. Oxford has a relatively high home value by Mississippi standards, at $351,646. Nesbit, at $349,586 is also among the more expensive average home values. And Madison, at $392,949, is one of the highest home values you’ll find in the Magnolia State.

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Tips for Securing a Competitive Mortgage Rate in Mississippi

Obtaining a competitive mortgage rate can significantly impact the overall cost of homeownership. By following these tips, homebuyers can position themselves to secure favorable mortgage terms in Mississippi.

Compare Interest Rates and Fees

Homebuyers should diligently do the math on interest rates and fees offered by different lenders. It’s crucial to inquire about any upfront costs or closing fees associated with the loan. These additional expenses can impact the overall affordability of the mortgage and should be factored into the decision-making process.

Get Preapproved

Completing the mortgage preapproval process allows homebuyers to move swiftly when they find the right property, as they already have a clear understanding of their borrowing power and the terms of their mortgage. Having preapproval demonstrates to sellers that the buyer is a serious and qualified candidate, enhancing the chances of a successful purchase.

Mississippi Mortgage Resources

Mississippi offers resources to assist homebuyers, particularly if you qualify as a first-time homebuyer. These programs can provide valuable support and make homeownership more accessible.

First-Time Homebuyer Programs

Mississippi Home Corporation’s (MHC) Smart6 Mortgage Program offers competitive interest rates with down payment assistance as a second mortgage. Smart6 is offered through participating lenders at a 30 year fixed rate and is available to first-time buyers as well as those who are not first-timers.

Down Payment Assistance

Sometimes small nonprofits or individual location governments offer down payment assistance programs so always check with local organizations. In Mississippi, the Smart6, as noted above, offers $6,000 in down payment assistance as part of its program, in the form of a 0% interest second mortgage.

Tools & Calculators

The tools below can empower Mississippi homebuyers to make informed financial decisions and plan their homeownership journey effectively.

Refinancing Options in Mississippi

Homeowners in Mississippi have the opportunity to refinance their existing mortgages to secure lower interest rates or access additional features. Refinancing can provide significant cost savings and improve the overall affordability of homeownership. In addition to refinancing through a bank or other lender, those with government-backed loans have access to these refi programs:

•   The FHA Streamline Refinance program offers a simplified and cost-effective way for FHA-insured homeowners to refinance their mortgages without the need for a new appraisal or extensive documentation.

•   VA Interest-Rate Reduction Refinance Loans (IRRRLs) provide an opportunity for VA loan holders to reduce their monthly payments by refinancing at a lower interest rate. This option is available to eligible veterans and active-duty military members.

Closing Costs, Taxes, and Fees in Mississippi

Homebuyers in Mississippi can expect to pay various closing costs, taxes, and fees associated with purchasing a home. Closing costs typically range between 3% and 6% of the home’s purchase price. These costs may include appraisal fees, title insurance, loan origination fees, and other administrative charges.

The specific closing costs and taxes may vary depending on the property value and location.

The Takeaway

Mississippi is a relatively affordable place to go home-shopping thanks to the state’s low cost of living, and its mortgage landscape presents a diverse range of options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make smart decisions as they put down roots in Mississippi.

FAQ

Will mortgage rates drop in Mississippi?

Predicting future mortgage rate movements is challenging due to the influence of multiple economic factors. However, homebuyers can stay informed about economic indicators and market trends to make informed decisions about the timing of their home purchase.

Will mortgage rates ever go back to normal?

“Normal” mortgage rates are subjective and can vary over time. Homebuyers should focus on current market conditions and available options rather than speculating about future rate movements.

Will Mississippi home prices ever drop?

Real estate market trends, including home price fluctuations, are influenced by a multitude of factors. Homebuyers should consult with a local real estate professional to get the forecast for the specific market where they plan to go home-shopping.

Is it a good time to buy a house in Mississippi?

The decision of when to purchase a home involves personal financial circumstances, market conditions, and long-term goals. Homebuyers should carefully assess their financial situation, research market trends, and seek professional advice to determine the best time to enter the housing market.

How do I lock in a mortgage rate?

Homebuyers can lock in a mortgage rate for a certain period, typically at a small fee, to protect against potential interest rate increases. This option can provide peace of mind and ensure a stable interest rate during the homebuying process.

How do mortgage interest rates work?

Mortgage interest rates are influenced by a combination of economic factors, borrower-specific characteristics, and prevailing market conditions. Homebuyers should understand how these factors impact interest rates to make informed decisions about their mortgage options.

SoFi Mortgages
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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