Last Updated on June 3, 2017 by Andrew Lee
There’s more to Mississippi than just its world-famous BBQ. With its southern charm, numerous waterways, friendly climate, forests, beaches, and swamps, residents and tourists alike definitely don’t get bored and have something new to do every single day. These, plus the abundance of beautiful cities such as Meridian, Oxford, and Tupelo, as well as its relatively low cost of living put it at the top of many home buyers’ list of potential states to live in. (Source: Livability.com)
Value and Pricing of Real Estate Property in the State
One reason behind the lower cost of living in The Magnolia State compared with many other places in the country is its more affordable housing. An average home here is valued at $112,000 – $83,300 cheaper than the nationwide median home value. (Source: Zillow)
It’s also worthy to note that of all different types of housing available here, single-family homes come in the greatest number, representing 95.70% of all residential dwellings. Their average property value is $69,369.43. PUD homes are the next least expensive, valued on average at $92,773.00. Townhomes are the second priciest, at $96,445.74, while condominiums are the most expensive, at $117,068.18.
The State’s Home Lending Laws
All of the counties in MS implement the standard conforming loan limit of $417,000. And only a few, including Copiah, Rankin, Yazoo, Simpson, Hinds, and Madison, have FHA loan limits higher than the standard $271,050. The fact that majority of the state maintains the standards on both conforming and FHA loan limits evidences the overall affordability of home lending and buying here.
Home buyers should also note that this particular state is a “deed of trust” state. In other words, mortgage borrowers will most likely get a deed of trust from their lender instead of an actual mortgage. Lending institutions choose to do this so they avoid having to go through court procedures in the event that they need to foreclose on a property.
Comparing Offers and Rates
In order to avoid paying more than what’s necessary towards a mortgage, borrowers should make the most appropriate choice right off the bat. This means they should take as much time as possible in shopping around and comparing offers as well as the rates associated with them. Just a few point-difference can already mean hundreds, or even thousands of dollars more that go towards just paying for the interest.
Mortgage Insurance Basics
Lending institutions require some of their applicants to purchase mortgage insurance, which serves as a protection for the lender in the event that a borrower defaults on the loan and hasn’t paid it back entirely. Not all home buyers would have to get this though. In most cases, those who do are the ones who can’t make the required down payment amount.
In most cases, lenders require borrowers to put down at least 20% of the total selling price of a property. So for a house that costs $100,000, the down payment is equivalent to $20,000. Not having enough doesn’t automatically mean loan rejection. Most likely though, the lender will only approve the application if the applicant purchases mortgage insurance.
Help with Home Buying
A lot of people still have difficulties qualifying for a mortgage. There are ways to improve one’s chances of becoming eligible, but there are also organizations that make home buying more accessible.
One such agency in the state is the Mississippi Development Authority. It offers a couple of financing assistance, such as the Homebuyer Assistance Program (for down payments and closing costs) and the Rehabilitation/Reconstruction Program (for major home repairs or reconstruction) Another organization consumers can seek the help of is the Mississippi Home Corporation, which has a program called Mortgage Credit Certificate.
Mississippi Home Corporation: https://www.mshomecorp.com/how-we-help/getting-started/which-program-is-right-for-me/
Mississippi Development Authority: https://www.mississippi.org/