Mississippi Mortgage Rates

Living in Mississippi

As the Magnolia State, Mississippi gets credit for the fragrant white flowers that bloom every summer, but it also boasts pine forests, sandy Gulf Coast beaches and the marker-studded Mississippi Blues Trail, which offers a deep-dive look at blues history. Meanwhile, the capital city of Jackson has a new civil rights museum, art museum and emerging foodie scene.

Mississippi is now lagging neighboring states when it comes to job growth, but it continues to offer a low cost of living, making it a potentially good fit for certain homebuyers.

Buyers already benefit from the lower cost of housing in Mississippi, but lately the market has been leaning toward sellers. In central Mississippi, where Jackson is located, the median price for a home was $182,000, up 4% from the year before, according to the Central Mississippi MLS. Meanwhile, pending sales were up 9.1%, while home supply was down almost 26%. In northwestern Mississippi, inventory has also been down, while the median sale price grew 7.89% to $184,500 in January.

In central Mississippi, the supply of homes has been sliding downward since the end of 2007, and homes there are now also spending less time on the market. In the first quarter of this year, a home in the area spent an average of 89 days on the market, versus 113 in 2017. If you’re thinking of buying in Mississippi, this might be the time to quickly put in a competitive offer once you find a home you like.

The rules and costs of buying a home in Mississippi

Every state has rules and regulations that affect the homebuying process. Here’s what you need to know about Mississippi:

Home seller and buyer laws

Mississippi law requires sellers of a residential property with one to four units to fill out a property condition disclosure statement. It requires sellers to disclose in writing known information that might affect both the value and useability of a home. This includes past problems with appliances; heating, plumbing and electrical systems; walls and foundation; the roof; pests, such as carpenter ants or termites; damage from fire, windstorms and tornadoes; code and zoning violations; and hazardous substances, such as asbestos or lead-based paint.

Mississippi is a non-judicial foreclosure state that does not require a mortgage lender to take a homeowner to court to foreclose. Instead, lenders are required to post a notice of sale for three consecutive weeks in circulating newspapers and also post notice at the local county courthouse. The sale of the home is allowed to go forward if the homeowner doesn’t pay the full amount due, plus any accrued costs, such as attorney fees.

Every state has divorce laws that can affect a couple’s ability to qualify for a mortgage and determine who gets the home after the divorce. Some states are community property states where all property acquired during the marriage must be split 50/50. Mississippi, however, is an equitable distribution state, where assets must be divided fairly but not necessarily straight down the middle. If a couple is unable to do this on their own, a court typically steps in.

Some states require homebuyers to hire an attorney to handle a residential real estate closing. In Mississippi, however, buyers are allowed to use a title company instead.

Taxes

Like a handful of U.S. states, Mississippi doesn’t require payment of a real estate transfer tax when a home is sold. Meanwhile, it has one of the lowest property tax rates in the United States, which is good news for homeowners.

According to Tax-Rates.org, the median property tax rate in Mississippi is now 0.52%, or $508 based on a median home value of $98,000.

Property taxes can vary widely depending on where you live. In Mississippi, the average property tax bill in Madison County, north of Jackson, is currently $1,204, or 0.66% of the median home value. By contrast, the average property tax bill in Amite County, in the southwest corner of the state, is $281, or 0.39% of the median home value.

Like many states, Mississippi offers a property tax exemption for certain residents. Homeowners who are age 65 or older or have a disability may receive an exemption for property taxes on up to $7,500 of a home’s assessed value. To learn more, go to this property tax information site.

Conforming loan limits

The conforming loan limit for a single-family home throughout Mississippi is now $484,350, the same amount that applies to most of the U.S. (higher-priced areas have higher limits).

A conforming loan adheres to guidelines and rules that have been set for two government-sponsored entities, Fannie Mae and Freddie Mac; lenders use conforming loan limits to issue conventional mortgages for homebuyers that are both safer and more affordable. As a homeowner, you may be able to receive a nonconforming loan for a higher mortgage amount to pay for a more expensive home, but conforming loans typically offer better interest rates.

Programs for homebuyers in Mississippi

Buying a home can be expensive, and even more so when you factor in down payment and closing costs. Fortunately, Mississippi offers three homeownership programs through the Mississippi Home Corporation that can make homebuying more affordable.

Smart Solution mortgage

The Smart Solution program offers a competitive, 30-year, fixed-interest-rate loan that can be combined with either a cash advance or second mortgage to pay for down payment costs. The second mortgage carries the same interest rate as the first loan and has a 10-year repayment period. This program also offers lower mortgage insurance premiums and can be combined with a mortgage credit certificate (see below) to receive a federal tax credit on a portion of mortgage interest paid each year.

In order to qualify for the Smart Solution mortgage, you must:

  • Live in the home as your primary residence
  • Have a household annual income no higher than $95,000
  • Be a legal U.S. resident
  • Have a credit score of at least 620 for conventional, FHA, USDA and VA loans

Learn` more

Mortgage Revenue Bond 7 (MRB7)

The MRB7 program offers a competitive, 30-year, fixed-rate loan and up to $7,000 to help pay certain, allowed closing costs, such as loan origination and attorney fees. The closing cost assistance is offered as a deferred, zero-interest second mortgage that is forgivable in 10 years. This homebuying program is financed by the sale of mortgage revenue bonds, which are not subject to federal taxes.

In order to qualify for the MRB7 program, you must:

  • Be a veteran or a first-time homebuyer who has not owned a residence in the past three years
  • Meet the credit and underwriting requirements for the type of loan you’d like, whether it’s a conventional, FHA, VA, Fannie Mae, Freddie Mac or USDA Rural Development loan
  • Be purchasing a new or existing condominium, single-family home, townhouse or permanently affixed manufactured home in the state of Mississippi
  • Be buying a home without the use of discount points

Learn more

Mortgage credit certificate (MCC)

The mortgage credit certificate program lets qualified buyers receive a federal tax credit for 40% of the mortgage interest they pay each year. This can make monthly mortgage payments more affordable, while still letting homeowners take an itemized tax deduction on the remaining 60% of mortgage tax they owe. The exact amount of tax credit you receive will depend on your interest rate, but the limit is $2,000.

To qualify for the mortgage credit certificate program, you must:

  • Be a first-time homebuyer or have not owned a home in the past three years (no first-time homebuyer requirement if you’re buying in a designated target area)
  • Be purchasing a single-family home as a primary residence
  • If buying a manufactured home, which must be approved by the U.S. Department of Housing and Urban Development, own the land on which it will sit
  • Be purchasing a home that meets any county acquisition cost limits (like those for FHA loans)
  • Meet Mississippi MCC program income limits, which vary by county and household size
  • Pay a $300 non-refundable reservation fee
  • Provide proof of a completed online homebuyer education course

Learn more

Rate shopping tips

By shopping around for the best mortgage rate, you may be able to save thousands — or even tens of thousands of dollars — over the life of the loan. Here are four shopping tips to consider first:

Contact at least three lenders on the same day

Mortgage interest rates change often, so it’s important to contact three lenders on the same day to get the most accurate quote comparison. Gathering your quotes at the same time will also help limit any potentially adverse effect o n your credit score. This is because mortgage rate inquiries made within a certain limited time period (14 to 45 days depending on which version of your FICO score is being used) are treated as one inquiry for credit reporting purposes.

Give each lender the same information

Before speaking with lenders, gather together the information your lender will need to pull your credit score and provide you with an accurate rate quote. By providing lenders the same information at the same time, you’ll be able to make a fairer comparison. The information you’ll need will include your legal name, income, Social Security number, the address of the home you’ve found, its estimated value and the amount of down payment you can afford.

Add up all lender fees to confirm the total loan cost

Lenders typically charge fees to process and close a mortgage. To see what these fees might do to the total cost of your loan, check the loan estimate that lenders are required by law to give you within three days of receiving your application. By looking at potential closing costs for your loan, you’ll see what you might owe for application fees, recording fees and any other underwriting fees. Your loan estimate will also show what you owe for any discount points you choose to pay for in exchange for a lower interest rate.

Know when to lock in the rate

By locking in your interest rate early in the application process, you’ll avoid having to worry about a possible rate hike if market interest rates go up before you close on your purchase. Speak to your lender to determine the best time to lock in a rate, especially if your closing date is several months off and rates are trending downward. Confirm your rate lock in writing and ask about a potential “float-down” if rates go down.

The information in this article is accurate as of the date of publishing.