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Every state has rules and regulations that affect the homebuying process. Here’s what you need to know about Mississippi:
Mississippi law requires sellers of a residential property with one to four units to fill out a property condition disclosure statement. It requires sellers to disclose in writing known information that might affect both the value and useability of a home. This includes past problems with appliances; heating, plumbing and electrical systems; walls and foundation; the roof; pests, such as carpenter ants or termites; damage from fire, windstorms and tornadoes; code and zoning violations; and hazardous substances, such as asbestos or lead-based paint.
Mississippi is a non-judicial foreclosure state that does not require a mortgage lender to take a homeowner to court to foreclose. Instead, lenders are required to post a notice of sale for three consecutive weeks in circulating newspapers and also post notice at the local county courthouse. The sale of the home is allowed to go forward if the homeowner doesn’t pay the full amount due, plus any accrued costs, such as attorney fees.
Every state has divorce laws that can affect a couple’s ability to qualify for a mortgage and determine who gets the home after the divorce. Some states are community property states where all property acquired during the marriage must be split 50/50. Mississippi, however, is an equitable distribution state, where assets must be divided fairly but not necessarily straight down the middle. If a couple is unable to do this on their own, a court typically steps in.
Some states require homebuyers to hire an attorney to handle a residential real estate closing. In Mississippi, however, buyers are allowed to use a title company instead.
Like a handful of U.S. states, Mississippi doesn’t require payment of a real estate transfer tax when a home is sold. Meanwhile, it has one of the lowest property tax rates in the United States, which is good news for homeowners.
According to Tax-Rates.org, the median property tax rate in Mississippi is now 0.52%, or $508 based on a median home value of $98,000.
Property taxes can vary widely depending on where you live. In Mississippi, the average property tax bill in Madison County, north of Jackson, is currently $1,204, or 0.66% of the median home value. By contrast, the average property tax bill in Amite County, in the southwest corner of the state, is $281, or 0.39% of the median home value.
Like many states, Mississippi offers a property tax exemption for certain residents. Homeowners who are age 65 or older or have a disability may receive an exemption for property taxes on up to $7,500 of a home’s assessed value. To learn more, go to this property tax information site.
The conforming loan limit for a single-family home throughout Mississippi is now $484,350, the same amount that applies to most of the U.S. (higher-priced areas have higher limits).
A conforming loan adheres to guidelines and rules that have been set for two government-sponsored entities, Fannie Mae and Freddie Mac; lenders use conforming loan limits to issue conventional mortgages for homebuyers that are both safer and more affordable. As a homeowner, you may be able to receive a nonconforming loan for a higher mortgage amount to pay for a more expensive home, but conforming loans typically offer better interest rates.
Buying a home can be expensive, and even more so when you factor in down payment and closing costs. Fortunately, Mississippi offers three homeownership programs through the Mississippi Home Corporation that can make homebuying more affordable.
The Smart Solution program offers a competitive, 30-year, fixed-interest-rate loan that can be combined with either a cash advance or second mortgage to pay for down payment costs. The second mortgage carries the same interest rate as the first loan and has a 10-year repayment period. This program also offers lower mortgage insurance premiums and can be combined with a mortgage credit certificate (see below) to receive a federal tax credit on a portion of mortgage interest paid each year.
In order to qualify for the Smart Solution mortgage, you must:
The MRB7 program offers a competitive, 30-year, fixed-rate loan and up to $7,000 to help pay certain, allowed closing costs, such as loan origination and attorney fees. The closing cost assistance is offered as a deferred, zero-interest second mortgage that is forgivable in 10 years. This homebuying program is financed by the sale of mortgage revenue bonds, which are not subject to federal taxes.
In order to qualify for the MRB7 program, you must:
The mortgage credit certificate program lets qualified buyers receive a federal tax credit for 40% of the mortgage interest they pay each year. This can make monthly mortgage payments more affordable, while still letting homeowners take an itemized tax deduction on the remaining 60% of mortgage tax they owe. The exact amount of tax credit you receive will depend on your interest rate, but the limit is $2,000.
To qualify for the mortgage credit certificate program, you must:
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