Are you getting ready to make the jump from renting your space to owning your own home? Whether you’re investing in a townhouse in the bustling streets in Kansas City or purchasing a single-family property in the quiet town of Parkville, our guide to Missouri loans and home buyer programs will help make the process easier.
5 Best Mortgage Lenders in Missouri:
- Best for First-Time Home Buyers: U.S. Bank
- Best for Self Employed Professionals: Flagstar
- Best Online Lender: Quicken Loans®
- Best for FHA Loans: Carrington Mortgage Services
- Best for VA Loans: Veterans United
The 5 Best Mortgage Companies in Missouri
Missouri offers borrowers a choice of lenders when it comes to getting a mortgage. Let’s take a look at a few of our favorite lenders and the types of loans they offer.
1. Best for First-Time Home Buyers: U.S. Bank
Buying a home can bring about lots of emotions. If you’re a first-time home buyer, it can be helpful to know that you can go to a physical location and speak with a loan officer if you have trouble completing your application online.
With a little over 200 offices in over 100 cities, U.S. Bank is the largest mortgage provider in Missouri with physical locations. U.S. Bank offers all types of government-backed mortgages and its website offers plenty of tools and calculators you can use to plan out your loan. If you’re looking for a simple online application and a location you can fall back on, U.S. Bank can be a great option for you.
2. Best for Self Employed Professionals: Flagstar
If you’re self-employed, you might be surprised at just how difficult it can be to prove your income. As your income fluctuates, you need a dynamic mortgage that fits your unique needs.
Flagstar is one of the most flexible mortgage lenders when it comes to choosing your loan type and term. Flagstar offers terms between 8 and 30 years, allowing you to customize your payments. If you’re a new professional who has just graduated with an advanced degree, Flagstar even offers additional loan options that you may qualify for with more debt or a lower income level.
3. Best Online Lender: Quicken Loans®
If you’re looking for a simple and quick online application, consider getting your loan through Quicken Loans. Quicken Loans’ Rocket Mortgage® platform has streamlined and simplified the mortgage application process. You can apply for your loan quickly and Quicken Loans’ application is so simple that you can finish it on your phone or tablet.
If you’re buying your first home, you’ll love Quicken Loans’ wealth of information and guides. They have articles on everything from the documents you’ll need to apply for your loan to the many types of mortgages. Easy and informative, Quicken Loans is our top choice for online lending in Missouri.
4. Best for FHA Loans: Carrington Mortgage Services
If you’re considering purchasing a home with an FHA loan, it may be because you have a lower credit score. Most lenders will allow you to buy a home with an FHA loan if you have a credit score of at least 580 points, but what if you’re still working on building your score to this point?
Carrington Mortgage Services is one of the few lenders that will allow you to buy a home with a credit score as low as 500 points. While you’ll need a larger-than-average down payment of at least 10% of your loan value, this can make buying a home much easier if you have a low credit score and are comparing FHA loan options.
5. Best for VA Loans: Veterans United
If you’ve served in the military, you might be considering buying a home with a VA loan. Veterans United is the country’s number one VA lender and with an average rating of 4.7 out of 5.0 stars, it’s one of the most highly-reviewed lenders as well.
Veteran United understands that getting your loan paperwork and proof of service can be confusing. Their staff of veterans can make it easier to file and learn about qualification requirements. Veterans United also offers consistently affordable and low rates for VA loans — so you’ll know that you’re getting a good deal on your home loan.
There are many different types of mortgage loans. You can customize your loan’s term and type to fit your repayment needs. But what exactly is a mortgage type and how many options are available to you?
Most home buyers will choose between 2 overarching categories of loans: conforming or government-backed. If a loan is conforming, it means that your lender has the option of selling it to a mortgage investment company like Fannie Mae or Freddie Mac. Conforming loans usually have lower interest rates and are available from more lenders.
A government-backed loan means that your loan has insurance from the federal government. There are multiple types of government-backed loans, but we’ll focus on the most common: FHA and VA loans. Government-backed loans are easier to qualify for in terms of income, debt and credit because they’re less risky for lenders.
Your mortgage term tells you how long you have to make monthly payments on your loan. For example, if you take out a loan with a 15-year term, it means that you’ll make monthly payments to your lender each month for 15 years. After you reach the end of your loan’s term, you own your home in full. Your term will also tell you a little more about your interest structure and how it changes.
All mortgages include both a term and a type. You can mix-and-match terms and types depending on your needs.
- Conventional mortgage loans are the most common type of mortgage loan. You can use a conventional loan to buy any type of property in any part of the country. To qualify for a conventional loan, you’ll typically need a credit score of at least 620 points and a down payment of at least 3%.
- FHA loans are for those with lower credit scores — you only need a score of 580 points to get an FHA loan with most lenders. To qualify for an FHA loan, you typically also need a down payment of at least 3.5% and you need to be buying a home you plan to live in full-time.
- VA loans are special government-backed loans for veterans and active members of the military. VA loans have a 0% down payment requirement and you can qualify with a credit score as low as 620 points. You need to meet service requirements before you can get a VA loan, and not every service member will qualify. You must also document your service with a Certificate of Eligibility (COE). Your mortgage lender may be able to help you with that.
Here are three types of mortgage terms.
- 30-year fixed-rate loans require monthly payments for 30 years before you fully own your home. Fixed-rate loans keep the same interest rate throughout the life of your loan.
- 15-year fixed-rate loans operate in exactly the same way as 30-year fixed-rate loans but with 15 years of payments.
- 5/1 adjustable-rate mortgages (ARMs) don’t keep the same rate throughout the term. When you have an ARM, your lender will first give you a few years of fixed interest payments. After your fixed period ends, your lender will shift your interest rate up or down depending on how market rates are changing.
The 5/1 ARM is the most common type of ARM and can have a 15-year, 30-year or another term. 5/1 ARMs begin with 5 years of fixed interest, then change according to the interest market every year.
Which Mortgage Lender is Best for You?
There’s an overwhelming number of mortgage lenders out there. To find the best possible lender for you, look for these qualities.
- Quick responses from customer service: Buying a home can be confusing, stressful and frustrating. Having a responsive customer service team can make the application, approval and closing processes much easier.
- Plenty of loan options: Some lenders provide a wide variety of loan terms and types, while others specialize in a single type of loan. Decide which type of mortgage loan works with your finances and credit information first, then search for a lender that offers that loan.
- An easy application: Look for a lender that offers a straightforward and simple preapproval process. If you’re buying your first home, you might want to look for a lender that issues loans in person at a physical location.
Lender Credit Score Minimums in Missouri
Every time you use credit or take out a loan, you impact your credit score. A credit score is a 3-digit number that represents you as a borrower. If you make your loan and credit card payments on time and avoid overborrowing, you probably have a high score, while missed payments and increased credit usage can result in a lower score.
Low credit scores mean increased risk for lenders. Mortgage lenders institute minimum credit scores to limit their risk when choosing mortgage candidates. Here are a few minimum credit score requirements between mortgage lenders.
|Lender||Minimum Credit Score Required|
|Carrington Mortgage Services||500|
Current Mortgage Rates in Missouri
Mortgage rates change quickly. It’s possible that rates in your area will change on a daily basis if you live in an area with a hot real estate market. Your local housing market and federal bond interest rates can also play a role in what you’ll pay for your loan.
Let’s take a look at current market rates in Missouri. We update this table regularly as market rates rise and fall.
|7/1 ARM (adjustable rate)||4.125%||3.646%|
|5/1 ARM (adjustable rate)||3.138%||3.172%|
Average Days to Close on a Loan
Closing is the final home stretch of the mortgage process. Most closings include 4 parts:
- Appraisal: During an appraisal, an appraiser will visit your news home and assign a general value to your property. Mortgage lenders require appraisals before they can issue loans, and most lenders will schedule your appraisal for you.
- Inspection: When you schedule a home inspection, an inspector will take a walk around your property and create a list of things that are broken or that need to be repaired. Unlike an appraisal, an inspection isn’t a required part of the closing process but you should still get one to ensure that your property is actually in the shape you assume it is in.
- Underwriting: The underwriting stage is the time when your lender double-checks your financial documentation and draws up your loan paperwork. Your lender will handle your loan underwriting while your appraisal and inspection are taking place.
- Closing meeting: During your closing meeting, you’ll sign onto your new loan and pay your down payment and closing costs.
The entire closing process can take as little as 3 weeks and as long as 3 months depending on your lender.
Buying Your New Home
Finding the best mortgage comes with homework. Explore a few different mortgage term options with mortgage payment calculators, learn more about the types of loans you qualify for with your credit score and figure out exactly how much home you can afford. After you know what you’d like to spend, you can start shopping for homes and lenders.