Mortgage Rates Missouri

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    Mortgage Rates Missouri: Compare Interest Rates Now

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    If you're planning to move to the Midwest, then Missouri is a great place to consider. It has sprawling cities, a diverse economy, and ranks among the highest in the nation in terms of affordability.

    But before you go house hunting, you need to understand how home loans and interest rates work. In this guide, we'll give you exclusive access to mortgage and refinance rates in Missouri. We'll also walk you through the home buying process, so you can be well on your way to purchasing your dream home!

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    Mortgage Loan Options In Missouri

    The first step to purchasing a house is understanding the types of home loans available. Your choice will affect your monthly payment amount, upfront costs, and mortgage rates. It will also affect the loan amount and the price range of the properties you can consider purchasing.

    Conventional Loans

    Mortgages that are not part of any government program fall under conventional loans. Getting this loan type can be advantageous because it has fewer eligibility requirements and it can be used to purchase any property type.

    Despite these benefits, conventional mortgages come with stricter credit requirements compared to government-backed loans. You will also be required to pay private mortgage insurance (PMI) if your down payment (DP) falls below 10% of the home price.

    Generally, mortgage companies classify conventional loans under the following:

    • Conforming loans: These mortgages have loan amounts that fall within limits set by the government. In Missouri, the limit is $548,250, on par with the national average. 
    • Nonconforming loans: These are loans that don't follow the typical rules for eligibility and pricing. Examples of these are jumbo loans, which have loan amounts that are above the conforming loan limits. Nonconforming loans typically come with higher mortgage rates.

    Government-Backed Loans

    Government-backed mortgages are available from private lenders but are insured by a federal agency. While they have more eligibility and documentary requirements, they usually come with lower DP and interest rates. Additionally, government-insured mortgages are available to those with less-than-ideal credit.

    Here are some of the most common types:

    • Federal Housing Administration (FHA) Loan: FHA loans are mortgages designed for low- to moderate-income borrowers. You can get an FHA loan for a DP that's as low as 3.5% of the purchase price. Compared to conventional mortgages, FHA loans also come with more lenient credit requirements.
    • Department Of Veterans' Affairs (VA) Loan: VA loans are available to eligible veterans, current service members, as well as their surviving spouses. You can get this type of loan without making a down payment or buying private mortgage insurance, but you might have to pay VA fees and closing costs.
    • US Department Of Agriculture (USDA) Loan: USDA loans are made for low- to-moderate income borrowers in rural areas. You have the option to go with a zero down payment option for an interest rate that is lower than what you get from an FHA loan. Borrowers will be required to pay upfront fees and mortgage insurance.
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    Loan Terms

    Picking out the loan type isn't the only important decision you have to make when getting a mortgage. You also have to pick from available loan terms. This will affect how long and how much you'll pay for your home.

    Fixed-Rate Mortgage

    Fixed-rate mortgages come with set interest rates. As such, your monthly payment amount remains consistent throughout the life of the loan. If you want your monthly payment amount to be predictable, you can go with this option.

    Typically, you can choose from 15, 20, or 30-year fixed-rate terms. When deciding, keep in mind that the longer the loan term, the higher the mortgage rate will be. If you can afford larger monthly payments, it's better to go for shorter terms. Shorter payment terms also allow you to build home equity faster.

    Adjustable-Rate Mortgage

    Adjustable-rate mortgages (ARM) are home loans where the interest rate is fixed for a certain period. Once that term expires, your interest rate will be adjusted annually based on market changes.

    One advantage of getting an ARM rate is that the mortgage rate is typically lower during the initial fixed period, which means you can pay less within the first few years. Once the mortgage rate is adjusted, though, your monthly payments may increase or even double.

    Mortgage Refinancing

    Mortgage refinancing means replacing your old home loan with a new one. You may choose from the following:

    • Rate and term refinancing: This refers to replacing your old mortgage with one smaller interest rate. You may also opt for a shorter payment term, like changing a 30-year fixed loan to one with 15 years.
    • Cash-out refinancing: You can refinance up to 80% of your home's property value for cash. For example, your house is valued at $100,000 and your mortgage balance is $60,000, you can borrow $80,000 and pocket the $20,000. This is a good way to get a low-interest loan if you need cash.
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    Today's Mortgage Rates In Missouri

    Missouri mortgage rates tend to stay on par with the national average. Check the table below to learn more about rates from various lenders.

    We update the data regularly, so please visit this page again for the latest mortgage and refinance rates. Note that these are subject to change without prior notice.

    Missouri Mortgage Rates

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    If you want personalized Missouri mortgage rates, you can use the tool at the top of this page. Just enter your personal and financial information, and we'll provide you with personalized quotes.

    Aside from interest rates, our tools also generate the annual percentage rate (APRs). The APR includes the lender's loan origination fee and other closing costs related to your mortgage. This will give you a more accurate picture of how much you'll have to pay for your property.

    Homebuyer Programs In Missouri

    The Missouri Housing Development Commission offers several loan programs that make it easier for first-time or repeat homebuyers to purchase properties in the state. Here are some of your options:

    • First Loan Program: Designed for first-time homebuyers, this loan program comes with affordable APR and cash assistance for your DP and closing costs.
    • Mortgage Credit Certificate: This program offers first-time homebuyers the opportunity to get a federal tax credit.
    • Next Step Program: This program gives borrowers the ability to purchase properties with a higher purchase price. Borrowers may also have the opportunity to get cash assistance for their DP and closing costs.
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    Steps To Buying Real Estate In Missouri

    Purchasing a home in Missouri doesn't have to be stressful. Follow the steps below to ensure that you won't have trouble buying your dream home.

    Step 1: Evaluate Your Financial Situation

    Getting a mortgage is a huge responsibility. To see if you're ready for this commitment, here are some of the factors to consider:

    • Down payment: If you're getting a conventional mortgage, you need to prepare a down payment of at least 20%.
    • Closing costs: All types of mortgages have closing costs, which include the fees you'll pay the lender to process your mortgage. This can reach 2-5% of your home's price.
    • Credit score: Most lenders require borrowers to have a score of at least 620.
    • Debt-to-income ratio: Typically, you should only use 36% of your income on debt (including future mortgage payments).

    Step 2: Look For A Lender

    Unless you can purchase a property via cash, you need to look for a lender that can finance your purchase. You can choose from banks, online lenders, or private mortgage companies.

    One of the most important factors to consider when choosing a lender is their annual percentage rate. Use the tool on our website to see APR offered by various lenders. That way, you don't have to go to each lender one by one and ask for personalized quotes.

    Step 3: Get Preapproved For A Mortgage

    Getting preapproved for a mortgage shows that you're serious about purchasing a property. You can request a preapproval letter from your chosen lender by providing them with your personal and financial information.

    Note that getting preapproved for a loan doesn't mean that you already have a mortgage. The preapproval letter only states that the lender has reviewed your financial information and has considered you a creditworthy borrower.

    Step 3: Find A Real Estate Agent

    A local real estate agent can help you navigate your way around the Missouri real estate market. They can look for properties within your ideal neighborhood while considering your budget. Your agent is also responsible for drafting and submitting a formal offer to the seller.

    Step 4: Secure Financing

    If your offer is accepted, you can start securing financing. Check mortgage rates again to see the most updated data. You can go with the lender that did your preapproval or move forward with a different company. After you’ve picked out a lender, submit the necessary documents. 

    Step 5: Hire An Inspector

    You can also hire a property inspector to check the property you want to buy to see if there are any additional costs you need to consider. If something comes up in the inspection, you can negotiate with the seller for a better deal.

    Step 6: Close The Deal

    Once your mortgage is cleared to close, pay closing costs and sign the paperwork. Afterward, you can receive your keys and get ready to move to your new home!

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    How To Get Better Mortgage Rates In Missouri

    Mortgage interest rates are applied to your loan balance to determine how much you'll pay for your property. If you're able to lower your rate, you can lower your monthly payment amount.

    Here are some ways to do this:

    Increase Your Credit Score

    Having a good credit score shows that you're a trustworthy and dependable borrower, and lenders will usually reward your creditworthiness with a lower mortgage rate. You can do the following to improve your score:

    • Pay down credit cards and student loans
    • Maintain a low balance on your credit cards
    • Avoid closing bank accounts you've had for a long time

    Purchase Discount Points

    One common way to lower your mortgage rate is by buying discount points from your lender. You can buy one point for 1% of the loan amount. So, if you have a $300,000 loan, you can purchase points for $3000 each.

    Paying discount points can lower your rate by 0.125%. You will have to pay more fees upfront, but you may end up paying less in the future. Instead of having a 30-year fixed mortgage with a rate of 3.30%, for example, you can lower the rate significantly by buying points.

    Make A Large Down Payment

    Paying more upfront can lower your rates significantly. If you are getting a jumbo loan, for example, you can make a large down payment and take your home loan out of the jumbo loan category. This will result in reduced rates overall.

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    Closing Thoughts

    Missouri is a great place to buy a home if you want a more affordable cost of living. If you're interested in buying a property in the state, use the rate tool on this page for more information on how much you need to budget. You can also follow the steps above to make the home buying process a breeze!

    For more advice on how to get the best mortgage rate in Missouri, get in touch with Wesley LLC. We have plenty of tools and mortgage resources to help you on your home buying journey!

    Written By Ed Wallace
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