Land Loan Rates in Mississippi: What to Expect in 2023

Mississippi’s beautiful landscapes and affordable land prices make it an attractive place to buy property. With land valued at around $5,500 per acre on average, Mississippians can purchase sizable parcels to eventually build a home, farm, or recreational retreat.

Financing raw land before you’re ready to build requires a unique type of loan a land loan, also called a lot loan. Land loans allow you to secure vacant property now and develop it later.

Land loans work differently than mortgages and construction loans. They offer more flexible terms longer repayment periods and have fewer requirements. But what kind of rates can you expect on a Mississippi land loan in 2023?

What Are Current Land Loan Rates in Mississippi?

Land loan rates fluctuate based on financial markets, the economy, and lender programs. But in general, 2023 land loan rates in Mississippi range from around

• 5.5% to 9% for excellent credit
• 6.5% to 10% for good credit
• 8% to 12% for fair/average credit

Actual rates you’re offered depend on your specific credit score, income, debt levels, loan amount, and other factors. Work with a lender to get an accurate rate quote.

Rates are also based on whether you choose a fixed-rate or adjustable-rate land loan:

• Fixed rates stay the same for the entire loan term, usually 10 to 30 years. This provides predictability.

• Adjustable rates start lower but can change annually after an initial fixed period, making your payments fluctuate.

Fixed rates are between 0.5 and 1% higher than adjustable rates upfront. But they protect you from potential payment spikes when rates rise in the future.

What Impacts Land Loan Rates?

Several personal finance factors determine the land loan rates lenders can offer you, including:

Credit Scores

The higher your credit score, the better land loan rate you can qualify for. Scores below 620 may have trouble getting approved at all or will pay much higher rates. Ideal scores are above 700.

Down Payment Amount

A larger down payment signals lower lending risk. While some land loans allow 0% down, paying 20% or more if possible gets the best rates.

Income and Debt Levels

Lenders look at your income, existing debts, and total monthly expenses. Strong finances mean you’re less risky to lend to.

Loan Term

Shorter loan terms often come with lower interest rates. But longer terms 20-30 years spread costs over more time, meaning lower monthly payments.

Property Type and Location

Loans for farmland or recreational properties may have different rate tiers than residential land loans. Where the property is located also factors in.

Average Land Loan Rates by Mississippi Lender

Here are insights on rate ranges recently offered by some top Mississippi land loan lenders:

Ferguson Federal Credit Union

• Credit Unions like Ferguson Federal Credit Union offer very competitive rates, given their member-focused mission.

• For well-qualified borrowers, fixed rates at Ferguson Federal start around 6% and 7%.

• They offer flexible terms up to 30 years.

Mississippi Land Bank

• As a lender under the Farm Credit System, Mississippi Land Bank specializes in ag land loans.

• They provide fixed rate options as low as 7% for 20-30 year loans. Adjustable rates start lower.

• Rates depend on acreage, use of funds, and other factors.

First Federal Savings & Loan

• This Gulf Coast lender provides financing for personal land purchases.

• Borrowers with strong credit can qualify for fixed rates near 6% and adjustable rates in the high 4% range.

• First Federal offers streamlined land-construction combo loans too.

AgAmerica Lending

• AgAmerica provides land loans nationwide for farms, ranches, and recreation, doing many deals over $1 million.

• As an agricultural lender, its rates are competitive for these uses but has high minimums.

• AgAmerica offers fixed and adjustable terms as well as short-term options.

While individual lender websites give rate guidelines, the only way to know what rate a lender will actually offer you is to apply and receive a formal quote. Each financial situation is different.

What is a Good Rate on a Land Loan in Mississippi?

A land loan rate under 6% fixed or 4-5% adjustable is generally considered excellent in today’s market. But the current average 30-year fixed mortgage rate is around 7%, so anything under that percent for a land loan is still reasonably competitive.

Ultimately, the right rate comes down to:

• What rates you qualify for based on your finances and credit

• Comparing options from multiple lenders

• Weighing benefits of lower adjustable rates vs. fixed rate stability

• Ensuring you can fit the monthly payments into your budget

Locking in a low fixed rate, even if it’s slightly higher than an adjustable rate, brings peace of mind knowing your payments will be predictable over the many years of the loan.

Preparing for a Low Rate on a Mississippi Land Loan

Follow tips like these to put yourself in the best position to get the lowest rate possible from lenders:

• Maintain excellent credit – Review your credit reports and keep up good financial habits.

• Save for a down payment – Put at least 10-20% down if possible.

• Lower your debt – Pay down debts, especially credit cards. Keep credit card balances low.

• Research lenders – Compare options to find the best land loan rates for your situation.

• Show strong finances – Have steady income that covers living expenses plus the new land loan payment.

Taking these steps ahead of time will boost your rate and approval chances substantially.

Find the Best Land Loan Rate in Mississippi

Mississippi provides scenic landscapes and properties at affordable per-acre prices. With proper financing, you can purchase a sizable parcel of land to eventually build your dream home, farm, or recreational retreat on.

A land loan gives you the ability to buy and hold raw land now for future use. And securing the lowest rate saves you money over the long run.

Rates for Mississippi land loans in 2023 range from the high 4% to low 9% range, with quotes depending on your financial profile. By maintaining good credit, lowering debts, saving up a down payment, and comparing lender options, you can get the most competitive rate on your land purchase.

Work with a top Mississippi land loan lender to evaluate your situation and mortgage options. This helps you find the right loan program and interest rate for purchasing vacant land so you can start building your plans piece by piece.