Now that the housing market is finally calming down after the pandemic, buyers are facing a new challenge: Soaring mortgage rates.
In Mississippi, the average 30-year fixed mortgage rate is 5.66% — up from 2021's historic lows. This raises the average monthly mortgage payment to $792 (assuming a 20% down payment at the median home value).
But buying a home in Mississippi is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Mississippi with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Mississippi want you to contribute 20% of the purchase price as a down payment. That would be $34,264 for a $171,319 home — the typical home value in Mississippi.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum down payment (%)
Down payment ($)
Based on typical home values from Zillow (August 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on home values from Zillow (August 2022) and a 5.66% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
Mississippi down payment assistance programs
There are plenty of down payment assistance (DPA) programs in Mississippi that can help first-time and low-income buyers afford a home. If you qualify for one of these options, you'll be able to receive financial assistance for closing costs or a down payment.
Check out these resources in Mississippi to see which programs you're eligible for:
MHC Smart Solution Mortgage
The Mississippi Home Corporation (MHC) offers two mortgage programs that provide down payment assistance. The Smart Solution Mortgage provides DPA through a 10-year second mortgage equal to 4.5% of the full loan amount. The interest rate is the same as the first mortgage.
This program requires a credit score of at least 640, and the household income cannot exceed $95,000 a year.
MHC Mortgage Revenue Bond 7
MHC's Mortgage Revenue Bond 7 program provides a deferred 10-year second mortgage that can offer up to $7,000. It accrues no interest and it's forgivable after 10 years.
This option is available to first-time homebuyers that meet the credit requirements and income guidelines for the county they’re buying in.
U.S. Department of Housing and Urban Development
Additional programs for Mississippi residents can be found on HUD's page here.
Step 2: Find a great real estate agent in Mississippi
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Mississippi.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Mississippi will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Mississippi home.
Step 4: Choose the right location
Currently, the typical home value in Mississippi is $171,319, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Biloxi:
Home value appreciation in Biloxi
Step 5: Start house hunting in Mississippi
Searching for homes in Mississippi is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Mississippi can have a big impact on your number of options. For example, in Mississippi, October has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Mississippi. Historically, there are 38.3% fewer homes for sale than during Mississippi's peak season.
Housing inventory in Mississippi by season
New listings per month
Based on data from Realtor.com (October 2022)
Step 6: Make an offer
Once you find a Mississippi house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Mississippi, homes stay on the market for 89 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Mississippi homes sell fastest in October, where the average property is only on the market for 79 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 18 days longer than Mississippi's annual average.
Average time homes spend on market in Mississippi
Based on data from Realtor.com (October 2022)
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
Home inspections in Mississippi
Having your Mississippi home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Although Mississippi sellers are required to fill out a disclosure form about their property, buyers are encouraged to conduct additional inspections. A general home inspection might not reveal all potential problems with the property, so it's best to do more specific tests to identify any other issues or defects before closing.
Here are a few important inspections you should consider before buying a Mississippi home:
- Radon testing: Elevated levels of radon can be hazardous to your health, so it's a good idea to have a test done to ensure a property is safe. Mississippi residents can learn more about radon and find a qualified radon tester on the Mississippi State Department of Health website.
- Pest inspection: If you have a VA or FHA loan, your lender may require a pest inspection of the property. However, having a pest inspection done is a good idea for all homebuyers to ensure that a home is safe and free of any unwanted critters.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
Step 8: Close on your new home!
The closing process in Mississippi requires you to complete some paperwork and pay off your closing costs at the title company.
On the closing date, be prepared to review and sign several documents, including:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
Make sure to read each page carefully and ask your agent if there's anything you don't understand. These are official legal documents that will transfer the title to your name, so it's essential to understand what you're signing.
After you finish the paperwork, you’ll pay off your closing costs. You'll simply pay the total amount to the title company, and then they’ll handle the distribution of the funds.
Homebuyers can typically break down their closing costs into four distinct categories:
- Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. Appraisal fees, survey fees, and other costs related to your loan may also be included with your lender fees.
- Title and escrow charges: Fees paid to the title company for their services. These charges will cover the costs of the title search, title insurance, and facilitating the closing.
- Prepaid costs: Ongoing costs of homeownership. Most lenders require buyers to pay for certain expenses up front, such as property taxes and homeowners insurance.
- Other closing costs: Miscellaneous expenses that can differ according to each buyer's circumstances. A few costs in this category can include natural disaster certification fees and real estate attorney fees.
Buyers in Mississippi typically pay 3–5% of the purchase price in closing costs. For a $171,300 home — the typical home value in Mississippi — that's between $5,139 and $8,565!
Frequently asked questions
Mississippi does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Mississippi neighborhoods
- Partner with the right real estate agent in Mississippi
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes, the Mississippi Home Corporation offers its Mortgage Revenue Bond 7 (MRB7) program to first-time buyers, veterans, and homebuyers in target areas. Eligible participants can receive a 30-year, fixed-rate mortgage, along with the option to apply for down payment assistance.
Eligible borrowers must meet the credit score requirements for whichever loan they choose and not earn more than the income limit set for their county. In target counties, the home purchase price must not exceed $309,000. For all other Mississippi counties, the purchase price cannot exceed $258,000.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.