|7/1 ARM (adjustable rate)||N/A||N/A|
|5/1 ARM (adjustable rate)||N/A||N/A|
Looking for a home in the Show-Me State? From jazz clubs to legendary BBQ, Missouri has something for everyone — including the best mortgage rates. Here’s everything you need to know about Missouri mortgage rates.
The Best Mortgage Lenders in Missouri for Rates:
What is a Mortgage Rate?
Lenders charge interest when they loan you money. Whether you’re charged interest for a credit card, a car loan or a mortgage, interest increases the overall cost of your purchase. Mortgages typically have lower interest rates because a home purchase is relatively large. You might charge a few thousand dollars (or more) on a credit card, but a home may cost $100,000 or more.
You’ll often see 2 rates when you look at a home purchase quote. One is your interest rate. This number doesn’t include any fees. The second number is your annual percentage rate (APR). This number does include application fees and other costs. It’s typically higher than the interest rate. Consider both numbers when you review your mortgage quotes.
What Factors Impact Your Mortgage Rate?
Lenders also don’t offer the same rate to every borrower. Here are the factors that impact your mortgage rate:
- Inflation: You might remember a time when a gallon of milk cost a lot less than it does now. That’s because of inflation. Items cost more and money is worth less over time. Lenders need to make sure that the interest rates they charge today will still be profitable in 15 or 20 years (or more).
- Bond rates: You may not realize that behind the scenes, mortgages are bundled and sold as investments. Investors see mortgages as stable investments. Bonds are another stable, long-term investment. Bond rates and mortgage rates usually mirror each other. When bond rates go up, mortgage rates usually do, too.
- Your financial history: Lenders look at your financial past to make an educated guess about how you’ll handle a mortgage. A history of on-time payments will probably work in your favor. On the other hand, accounts in collections may count against you. If a lender views you as risky, it may offer you a higher interest rate.
- Your down payment: Lenders like a big down payment. Why? It shows that you’re committed to the home purchase. Let’s say you’ve put down 20% on a $150,000 home. You’ve invested $30,000. The lender only needs to lend you $120,000. This lowers the lender’s risk. In exchange for less risk, the lender might offer you a lower interest rate.
- Buying points: Many lenders allow you to buy points. Points lower the interest rate on your mortgage. A point is typically 1% of your total mortgage. Let’s say your lender offers to lower your interest rate by 0.25% per point. You’ll get a $120,000 mortgage. You decide to buy 2 points and spend $2,400 upfront to lower your interest rate by 0.5%.
Each lender uses its own criteria for evaluating borrowers. This is why it’s essential to get more than one purchase or refinance quote.
What is a Mortgage Type?
As you look into mortgage rates, keep in mind the different types of mortgages. These include:
- FHA: The Federal Housing Administration oversees and guarantees FHA loans. These mortgages are designed to help more borrowers buy homes. FHA loans have low credit score requirements. You can also make a relatively small down payment — 3.5% — if you have a credit score of 580 or higher. These loans also have limits. In most areas, you can borrow up to $314,827. You may be able to borrow up to $726,525 in higher-cost areas.
- USDA: The Department of Agriculture administers the USDA loan program. These mortgages encourage borrowers to buy and develop homes in rural areas. These loans have income limits, but if you qualify, you may be able to obtain a USDA loan with no down payment.
- VA: The Department of Veterans Affairs sets the rules for VA mortgages. Veterans and current service members may qualify for these mortgages. They may have no down payment requirement. The VA also limits the fees associated with VA mortgages. These mortgages also have flexible credit requirements.
- Conventional: Conventional mortgages don’t have guarantees from a government agency. They usually have higher credit requirements than government-backed mortgages. If you make a down payment of less than 20%, you may have to pay for private mortgage insurance (PMI). PMI protects the lender if a borrower doesn’t make mortgage payments.
The overseeing government agency must approve private lenders before they can offer FHA, VA and USDA mortgages.
What is a Mortgage Term?
Your mortgage term also influences your mortgage rate. Here are a few mortgage types:
- 30-year fixed: A 30-year fixed-rate mortgage lasts up to 30 years — less if you make extra payments. It has the same monthly payment and interest rate for the entire mortgage term. These mortgages typically have the lowest mortgage rates, but you pay the most in interest over the mortgage term.
- 15-year fixed: A 15-year fixed-rate mortgage will last a maximum of 15 years. The interest rate never changes. These mortgages have higher monthly payments than mortgages with longer terms. You pay less in interest over time with a shorter term.
- 5/1 ARM: An adjustable-rate mortgage (ARM) has an interest rate that changes. Lenders may adjust the rate up or down, depending on what’s going on with the economy. These mortgages often start with an initial fixed-rate period. A 5/1 ARM starts with a 5-year fixed-rate period. After that, the lender adjusts the interest rate annually. This means that the monthly payment may also change once per year.
You’ll find other mortgage terms out there, such as 20-year fixed-rate mortgages or 7/1 ARMs. Each lender decides which mortgage terms and types to offer.
Current Mortgage Rates in Missouri
Missouri’s fixed-rate mortgages are a bit lower than the national average. Adjustable-rate mortgages are about 0.5% higher. Mortgage rates change each day. Lenders base these changes on what’s happening in the economy. We update these rates to reflect the most relevant data possible.
|7/1 ARM (adjustable rate)||N/A||N/A|
|5/1 ARM (adjustable rate)||N/A||N/A|
Calculating Interest in Missouri
Each month, your lender calculates how much of your payment goes toward interest. Your loan balance is a little bit lower each month, so less of your payment goes to interest and more goes toward your loan balance. Here are examples of how much you might pay in interest in 4 Missouri cities.
|City||Average Home Value||Loan Term||Current Rate||Downpayment (20%)||Monthly Payment||Total Interest Paid|
|Kansas City||$148,800||30-year fixed||6.821%||$29,760||$777.72||$160,939.20|
|St. Louis||$168,200||30-year fixed||6.821%||$33,640||$879.11||$181,919.60|
Lender Credit Score Minimums in Missouri
Your credit score gives lenders a quick summary of your credit history. Credit scores range from 300-850. A higher credit score means a better credit history. It means you’re a lower risk to the lender and it might offer you a lower interest rate. Lenders establish minimum credit scores. Borrowers who don’t meet the minimum might not qualify for a mortgage right away. They might need to take steps to improve their credit score, like making timely payments or paying down credit balances.
Here are the credit minimums for a few Missouri lenders:
5 Best Mortgage Lenders in Missouri
Finding the right lender takes time. Here are the 5 best mortgage companies in Missouri.
1. Best Overall: Quicken Loans®
Quicken Loans® offers outstanding customer service and an easy-to-use website. It has loads of educational materials to help you with your search.
You can view sample rates online, which helps simplify comparison shopping. Quicken Loans® also has an online application, which helps to speed the process along.
It offers conventional mortgages, VA and FHA loans and a proprietary product that allows you to choose your loan term.
2. Best for First Time Home Buyers: U.S. Bank
Its intuitive website gets you started on your application so you can prequalify online. View U.S. Bank’s mortgage rates online so you can make an informed decision about applying. U.S. Bank offers conventional, VA and FHA mortgages.
3. Best for Mobile: Fairway Independent Mortgage Corporation
Fairway Independent Mortgage Corporation provides several mortgage options to borrowers, including conventional, FHA, VA and USDA loans.
Its mobile app, the FairwayNow app, allows you to upload documents and see on-the-go status updates.
4. Best for Low Credit Scores: Guild Mortgage
Guild Mortgage offers a cheery website with several calculators to help you decide on the right mortgage. It offers several mortgage products, including a mortgage for people with credit challenges.
You can apply online and a loan officer will help you find the best mortgage product for you. Guild Mortgage offers a first time homebuyer mortgage, conventional mortgages and FHA, VA and USDA mortgages.
5. Best for Service Members: Veterans United
If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.
In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.
Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.
Choose the Best Missouri Lender
Choosing a lender is a big decision. Take your time and get quotes from at least 3 lenders. Review each quote carefully — look for fees and discounts. Pay attention to the service you receive along the way and choose the lender that offers the best services for the best rate.
Frequently Asked Questions
Q: How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
Q: How much interest will I pay?
Interest that you will pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
Q: How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.