Compare Current Mortgage Rates in Missouri

A mortgage rate is the cost of borrowing for a homebuyer. When buying a home, you want as low a rate as possible so you can save money over time. A lower rate will not only save you money on your monthly payments but will also save you a significant amount of money over the life of the loan. This is why you should always compare both lenders and mortgage products when you are buying a house.

If you are a Missourian buying your first home, here is what you need to know about Missouri mortgage rates.

As with other states, mortgage rates in Missouri are influenced by such factors as the Federal Reserve, current national and global economic conditions, inflation, and the chosen lender. Lenders also set a mortgage rate based on each borrower’s credit score and down payment. Currently, Missouri doesn’t have any special regulations that determine the mortgage rates Missourians pay.

Missouri has quite a few first-time homebuyer programs. There are two major options available statewide and several that are regional. Homebuyers must apply well before buying a home and meet eligibility requirements to use these programs:

• City of Columbia Homeownership Assistance Program: This offers a 0% interest, forgivable loan of up to $10,000 you can use to purchase a home within Columbia city limits. Homebuyers must contribute at least $500 to the home purchase and not have more than $15,000 in stocks, bonds, savings, or checking accounts.
• Community Action Agency of St. Louis County: This organization provides aid to low-income residents of St. Louis County. It offers housing counseling and down payment assistance. Applicants will need to complete a program where they learn how to save money, take steps to boost their credit and meet with a housing counselor. 
• First Place Program: This statewide program offers mortgages with lower interest rates and down payment assistance for first-time buyers. You can receive the down payment assistance as a second loan that is 100% forgivable if you stay in the home for 10 years. The assistance can be up to 4% of the total loan amount, and funds can be used for both the down payment and closing costs. You must be a first-time homebuyer or not have owned a home in the past three years, and your income must not exceed your area’s limits. 
• Harry S. Truman Community Development Corporation: Eligible buyers can receive a down payment or closing cost assistance of up to $5,000 if they are purchasing in Joplin. Assistance comes in the form of a grant. The money can only be used to purchase a single-family dwelling, and the homebuyer must meet income qualifications. 
• Next Step Program: This statewide program is for repeat and first-time homebuyers whose incomes disqualify them from using the First Place Program. As with that program, you can get a lower interest rate on your mortgage and down payment assistance in the form of a forgivable second loan. The down payment assistance can be up to 4% of the mortgage amount and is forgiven if you maintain the original loan for a minimum of 10 years. 
• Rural Home Loans: To qualify for these loans, your income must be below the median income for the area in which you wish to purchase. The home’s value must not be above the area’s home loan limit, and the amount you can borrow depends on your ability to repay the loan. No down payment is required. The typical loan term is 33 years, but it can be increased to 38 years for very low-income borrowers to reduce the monthly payment. 
• St. Charles Home Ownership Assistance: This program offers up to $5,000 in down payment assistance. Your income must be at or below 80% of the median income for St. Charles, and you must take a homebuying class.

To get the best mortgage rate in Missouri, there are a few things you can do that may help: 

• Raise your credit score: Each borrower’s credit score is used by lenders to determine how much of a risk they are. Borrowers with low credit scores are statistically more likely to default on future payments. Because of this, lenders charge these borrowers a higher interest rate. To improve your rate, take steps to raise your score.
• Look at different loan options: Not every mortgage has the same rate. You may find that one loan option comes with a much better rate than others.
• Pay down your debts: A lower debt-to-income ratio (DTI) will not only improve your credit score, but it may also help you get a lower interest rate. The maximum DTI accepted varies by lender and mortgage type, but anything below 43% is considered good. 
• Shop around: Some lenders offer better rates than others. When buying a home, always take the time to compare lenders.
• Make a higher down payment: A higher down payment will lower your interest rate because you will have a lower loan-to-value ratio. If possible, take the time to save for a higher down payment, and, if you qualify, apply to a first-time homebuyer program. As long as you meet the eligibility requirements, you can use both your savings and the money you receive from an assistance program to make a down payment.

• Conventional: A conventional mortgage is not insured by the U.S. government and follows the guidelines issued by Fannie Mae and Freddie Mac. If you make a down payment of 20%, you can avoid paying for mortgage insurance and may get a lower interest rate.
• FHA: This is a government-insured loan for homebuyers who don’t qualify for a conventional mortgage. FHA loans only require a 3.5% down payment.
• VA: This loan is available for active and retired military personnel and their surviving spouses. A VA loan does not require a down payment and is insured by the U.S. government.
• USDA: This is for properties the United States Department of Agriculture (USDA) has deemed to be in areas in need of economic improvement. You can see if a home qualifies by inputting its address into the USDA eligibility map. Most homes that qualify are in rural areas. 
• Jumbo: A jumbo loan exceeds the loan limits established by Fannie Mae and Freddie Mac for conventional loans. To qualify for a jumbo loan, homebuyers typically need a high credit score and a large down payment.

Conventional loan

• Down payment requirement: 3%
• Minimum credit score: 620
• Maximum loan amount: $766,550

FHA

• Down payment requirement: 3.5%
• Minimum credit score: 580 for a 3.5% down payment; a 10% down payment required for scores between 500-579
• Maximum loan amount: Varies by county, but for most counties, the limit is $498,257

VA

• Down payment requirement: 0%
• Minimum credit score: Varies by lender; no minimum established by VA
• Maximum loan amount: No limit if you have full entitlement

USDA

• Down payment requirement: 0%
• Minimum credit score: Varies by lender; no minimum established by the USDA
• Maximum loan amount: $377,600 for all eligible counties

Jumbo

• Down payment requirement: 10% to 20% depending on the lender
• Minimum credit score: Varies by lender
• Maximum loan amount: No maximum amount