The average cost of buying a home in Missouri is $162,464. This price is well below America's national median purchase price of $287,148, making Missouri the 41st most expensive state to buy a home. This means it’s more affordable to become a MO homeowner compared to the rest of the US.
However, home prices aren’t the only thing you need to consider when buying a home. You need to compare current mortgage rates and the market's lender options. Different lenders may offer a loan program that makes repayment easier. They may also have more lenient credit score requirements that make it easier to qualify for a loan.
Before you purchase your first home in Kansas City or St. Louis, MO, you need to choose the right lender for you. This guide will help you zero in on the best mortgage lender in Missouri. We'll tell you what Missouri mortgage lenders look at before they offer a loan to first-time homebuyers, plus give our top five Missouri mortgage lenders!
How To Choose The Right Missouri Lender
Before we list the five best Missouri mortgage lenders overall, we want to give our criteria for choosing the right Missouri mortgage lender for your specific situation. The key criteria we look at are affordability, ease of application, variety of loan types offered, availability of physical branches, and quality of customer service.
Many first-time homebuyers look at interest rates to see how affordable an offer will be. However, these rates are constantly changing, so they're not a reliable indicator for consumers. Instead, we look at these criteria which indicate how easy it is to become a homeowner with a specific mortgage lender:
Minimum credit score: Your mortgage lender will look at your credit report to assess your ability to afford down payments and make monthly payments on time. Most lenders will require a minimum credit score of 620.
Minimum down payment: The lower the minimum down payments required, the easier it will be for you to become a homeowner. However, most lenders will offer low mortgage rates if you can make higher down payments on the loan amount.
Most loans will require a minimum of 20%. However, some lenders are willing to accept a down payment as low as 3%, as long as you get private mortgage insurance for financial protection.
Closing costs: Borrowers should also prepare to pay additional fees, aka closing costs, upon the close of their purchase. Your final closing cost may include application fees and origination fees.
First-time homeowner programs: Many states have programs designed to make it easier for first-time homeowners to purchase a property. State programs will typically have credits for taxes, closing cost coverage, and down payment loans.
Ease Of Application
When assessing a lender, we look at how easy it is to complete their mortgage application. We also check how long it takes to get applications for mortgages approved.
Online transparency of mortgage rates: Having online access to a lender's Missouri mortgage rates makes it easier to compare their offers and make the best choice. If this is important to you, choose a mortgage lender who discloses interest rates, appraisal fees, and lender fees without asking for additional information.
Length of time to complete an application: Ask a loan officer how long it will take for an application to be approved once you've submitted the requested load documents. On average, the loan process could take anywhere from several weeks to a few months to complete.
Online accessibility: This is especially important for those who can't spare the time to consult their loan officer face-to-face or live too far away from a branch. Check how easy it is to complete a home loan application online, from contacting a loan officer to submitting loan documents.
Variety Of Loan Types Offered
Even if a Missouri lender offers good rates, they won't be able to help you if they don’t offer the loan type you need. Here are the kinds of loans offered by mortgage lenders. Check if your lender offers these mortgage products:
Conforming loans: These are conventional home loans that follow the maximum FHFA loan limit of $548,250 (as of 2021). Note that the limit is higher in high-cost real estate markets – for example, New York's state limit is $822,375.
Fixed-rate conventional loans: These loans have fixed rates for the entire loan term. Your lender may offer fixed-rate loans with a closing period of 10, 20, or 30 years. These types are best for borrowers who want to make uniform monthly payments that are easy to budget.
Adjustable-rate conventional loans: Also called ARMs, adjustable-rate mortgages will have a low, fixed rate for a certain period. Once that period ends, the loan's guaranteed interest rate will be based on a chosen market index, which could lead to a fluctuating annual percentage rate.
Mortgage refinance (refi): These loans allow a borrower to trade in an existing mortgage loan for a new one. Refis have many advantages because you can swap out your current loan for better mortgage terms and low rates. Refinancing also allows borrowers to consolidate their debt through cash-in/cash-out refinancing or rate-and-term refinancing.
Government-backed loans: VA, FHA, and USDA loans typically offer low rates and better terms for qualified borrowers, such as low or zero-down payment requirements. This makes it easier for those with a low credit score or first-time buyers who meet government department qualifications to buy property.
Home equity loans: Also called home equity lines of credit or HELOCs, this type of mortgage loan allows you to put up your property as the collateral for your mortgage loan.
Jumbo mortgage: This is a type of loan that exceeds the maximum limit.
Availability is an essential criterion for any lender. Even if your preferred lender meets all the other criteria, you won’t be able to make the most of their services if they don’t serve your state.
Apart from online availability, we also look at the number of branch offices that a lender operates nationwide. A lender with many branches in your preferred state is better for those who want to apply with a loan officer face-to-face, instead of online.
Quality of Customer Service
Because a mortgage loan is an obligation that lasts for a very long period, it's important to have a Missouri mortgage lender who knows how to cater to a borrower's needs. Check a lender's JD Power or BBB ratings to find out how other borrowers rate their customer service and helpfulness. Extra points if a lender's loan officer readily gives information about rates and promptly answers questions!
The 5 Best Missouri Mortgage Lenders
We chose five Missouri mortgage lenders that fit all these criteria. Each of these lenders is best for certain kinds of loans or services, so choose one that best suits your needs.
Here's a quick comparison of our top five choices:
Minimum FICO Score
Minimum Down Payment
JD Power Rating
620 (580 for FHA and VA loans)
Bank of America
620 (660 for VA and 640 for FHA loans)
Existing bank customers
New America Funding
First-time homebuyers/buyers with poor credit
Customized interest rates
3%, but can go as low as 0% for VA mortgages
Low down payment state programs
1. Rocket Mortgage by Quicken Loans - Best For Online Consumers
Serviced by Quicken Loans, this mortgage lender is best for consumers looking for fast, fully online applications. In just minutes, you'll get an estimate for the amount of money you'll need for your home loan. Note that it will do a credit check if you want a custom interest rate.
Lender availability: Rocket Mortgage's online services are available nationwide.
2. Bank of America - Top Choice For Current Bank Customers
If you already have an account with this financial institution, you're in luck. Bank of America will autofill your application with your existing contact information and offer you a reduction of up to $600 on your origination fees. The application process can be completed wholly online, so consumers don't have to go to a physical branch or talk face-to-face with a loan officer.
Lender availability: Bank of America has over 4,000 bank branches in 37 states.
3. New American Funding - Best For Alternative Credit Assessments
New American is famous for its manual underwriting. Instead of assessing your credit profile through an automated model, New American takes complete control and evaluates your financial profile from all possible angles. This means many first-time or low-income borrowers are able to secure low fees on home loans, despite having bad or no credit.
Lender availability: New American Funding originates loans in all states and the District of Columbia, except New York and Hawaii.
4. NBKC - Best For Getting Customized Rates
NBKC has fairly low mortgage rates and is renowned for allowing borrowers to easily apply for loans and get updates online. This company is known for readily disclosing customized interest rates and fee estimates, without asking for contact information. Note that their construction loans and equity lines are only offered in Kansas City
Lender availability: NBKC operates 4 branches in Kansas and Missouri.
5. Flagstar - Best For Low Down Payment State Bond Programs
Because Flagstar has many community-based loan advisors all over America, your assigned loan officer will be familiar with state programs for first-time and low-income borrowers. It is also familiar with properties qualified for rural development mortgages. Flagstar’s expertise makes more people qualified for their different loan products.
Lender availability: Flagstar has 150 branches and operates online, but it only has brick-and-mortar branches in California, Indiana, Michigan, Ohio, and Wisconsin.
Find The Best Mortgage Loan For Your Future Home
If you're looking to settle in the Midwest, Missouri is an affordable state for a suburban home! With help from experienced mortgage brokers, you'll be able to find a great lender and settle into your dream home!
Excited to start applying for a home mortgage? Consult Wesley Mortgage, LLC and we'll give you more information about the home financing experience, free of charge! With our help, you'll be able to find a good lender to finance your property purchase.