Buying a home in Mississippi
According to Zillow, the typical home value in Mississippi is lower than the typical value of $259,906 across the US. The typical home value in Mississippi is $131,774, and Zillow expects it to increase to $139,000 by September 2021.
First-time homebuyer programs in Mississippi
You may eligible for one or more of the following programs from the Mississippi Home Corporation:
- Smart Solution: Get a 30-year fixed-rate mortgage and receive a 3.5% loan for down payment assistance. The down payment loan will have the same interest rate as your mortgage, and you'll pay back the loan over 10 years.
- Housing Assistance for Teachers: The state will give you a $6,000 grant toward your mortgage costs if you're a public school teacher in certain counties and subject areas. You don't need to repay this grant.
- MRB 7: Borrow up to $7,000 for down payment assistance. You won't pay any interest, and you'll pay off the loan when you sell, refinance, or completely pay off your mortgage.
- Mortgage Credit Certificate: Claim 40% of the interest you pay on your mortgage on your federal taxes, up to $2,000 per year. You can combine the MCC program with the Mississippi Home Corporation's other assistance loans.
Historic mortgage rates for Mississippi
By looking at the average mortgage rates in Mississippi since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 5/1 adjustable mortgages:
Seeing how today's rates compare to historic Mississippi mortgage rates may help you decide whether you'd be getting a good deal by getting a mortgage or refinancing now.
30-year fixed mortgage rates
A 30-year fixed mortgage comes with a higher interest rate than a shorter-term fixed-rate mortgage. The 30-year fixed rates used to be higher than adjustable rates, but 30-year terms have become the better deal recently.
Your monthly payments on a 30-year term will be lower than on a shorter-term mortgage. You're spreading payments out over a longer period of time, so you'll pay less each month.
You'll pay more in interest in the long term with a 30-year term than you would for a 15-year mortgage, because a) the rate is higher, and b) you'll be paying interest for longer.
15-year fixed mortgage rates
The 15-year mortgage rates are lower than 30-year mortgage rates. Between the lower rates and paying off the loan in half the time, you'll pay less in the long run on a 15-year mortgage than on a longer term.
However, your monthly payments will be higher on a 15-year loan than on a 30-year loan. You're paying off the same principal amount in a shorter amount of time, so you'll pay more each month.
Adjustable mortgage rates
With an adjustable-rate loan, your rate stays the same for the first few years, then changes periodically. For example, your rate is locked in for the first five years on a 5/1 ARM, then your rate increases or decreases once per year.
ARM rates are at all-time lows right now, but a fixed-rate mortgage is still the better deal. The 30-year fixed rates are comparable to or lower than ARM rates. It could be in your best interest to lock in a low rate with a 30-year or 15-year fixed-rate mortgage rather than risk your rate increasing later with an ARM.
If you're considering an ARM, you should still ask your lender about what your individual rates would be if you chose a fixed-rate versus adjustable-rate mortgage.
Refinancing your mortgage in Mississippi
Mortgage refinance rates are at all-time lows right now, so it could be a good idea to switch your current mortgage for one with a better interest rate — especially if the new rate would be significantly lower.
You may decide to refinance with the same lender that gave you your initial mortgage, but it's not always the best idea. A different lender may offer you a better deal the second time around. Shop around for a company that will offer the best interest rate and charge relatively low fees.
How to get a low interest rate on your mortgage
Here are some tips for landing a good interest rate on your mortgage:
- Save more for a down payment. With a conventional loan, you may be able to put down as little as 3%. But lenders reward a higher down payment with a better interest rate. Mortgage rates should stay low for a while, so you may have time to save a bigger down payment.
- Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But you can land a better interest rate with a higher score. The most important factor for boosting your score is to pay all your bills on time.
- Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less for a conventional mortgage, but a lower DTI can result in a lower rate. To improve your DTI, pay down debts or consider opportunities to increase your income.
- Choose a USDA or VA loan. If you're eligible, you might consider a USDA loan (for low-to-moderate income borrowers buying in a rural area) or a VA loan (for military families). These types of mortgages typically charge lower rates than FHA or conventional loans — and you don't need any money for a down payment.
Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.