Whether you’re buying a home in Louisville, Lexington, Paducah or somewhere in between, knowing what to expect financially can make all the difference in your home-buying experience. Kentucky is known for the Derby, bourbon and the rolling hills and “hollers” of the countryside and one of the lowest costs of living in the country.
Take a look at the current mortgage rates in Kentucky. Benzinga has put together this guide to help you prepare to buy a home in the Bluegrass State.
5 Best Mortgage Lenders in Kentucky
You don’t just want any mortgage — you want the best mortgage, right? Here are some of the best mortgage lenders in Kentucky to help you get started.
1. Best Overall: Quicken Loans®
Quicken Loans® offers something for everyone. You can use the Quicken Loans website to narrow down your choices and find the best mortgage for you.
When you’re ready to apply, you can use its simple and intuitive digital application process. You can even work with Quicken Loans to customize a mortgage product to fit your long-term goals and budget.
If you need help, Quicken Loans offers a number of resources to walk you through everything from estimating your mortgage payments to learning about mortgage product requirements. It also offers customer service support by phone and online to help answer your questions quickly and efficiently.
2. Best for Simplicity: SoFi Mortgage
SoFi Mortgage is an alternative option for those who have had trouble with traditional banks in the past. Plus, you can use SoFi Mortgage whether you have a bank account with the firm or not. Mortgages are available anywhere in Kentucky, and you can quickly pre-qualify online.
When you apply for your mortgage, SoFi ensures that you submit as little paperwork as possible. The company also helps you qualify with flexible debt-to-income ratios and lower down payments. Choose from VA, FHA, 203k and jumbo loans. Investment loans are also available.
Because SoFi is an online bank, you can easily reach the customer service team online, via email, on the phone or through social media.
You can close in as little as 30 days, and you can even make your payments online or through the SoFi app.
3. Best for Veterans: Veterans United
You’ll need to meet a certain set of requirements to qualify for a VA loan. Veterans United’s website can walk you through these requirements and help determine whether you qualify.
The website can then help you get started with purchasing or refinancing your home. With Veterans United, you can prequalify for your mortgage online so you can start shopping for your home sooner.
You can also use its online tools to estimate your monthly payments and work through your budget. If you have any questions about the process, you can reach out to its customer service team 24/7 for answers.
4. Best for First-Time Home Buyers: Wells Fargo
The best lenders for first-time buyers include well-established banks like Wells Fargo. Wells Fargo offers its First Mortgage program specifically for first-time home buyers with a low-to-moderate income.
The First Mortgage program means you can spend as little as 3% of your home’s purchase price on your down payment. You can also receive a $750 credit toward your closing costs if you complete a home buyer education course.
In addition, Wells Fargo offers the benefit of in-person assistance at its branch locations throughout Kentucky. You can also use the Wells Fargo website to navigate the mortgage process.
5. Best for Self Employed Individuals: Guaranteed Rate
Your mortgage process can be a little different if you’re self-employed. Guaranteed Rate makes navigating this process as a self-employed individual as easy as possible. You can use its intuitive loan finder to match you with the mortgage product that best meets your needs.
You’ll also be able to benefit from the Guaranteed Rate mobile application, where you can view current mortgage rates, submit your documents and more. You can choose from a variety of mortgage products from Guaranteed Rate, including government-backed loans.
If you need help at any time throughout the process, you can reach out to a loan officer via the Guaranteed Rate website, mobile app or by phone.
What is a Mortgage Rate?
Your mortgage rate is the interest rate on your loan. Interest is the percentage of your mortgage balance you'll pay back directly to your lender.
Each time you make a mortgage payment, a portion of your payment goes toward interest. The rest goes toward paying back what you actually borrowed, which is your principal amount.
What Factors Impact Your Mortgage Rate?
Your mortgage rate will make a huge impact on how much you’ll pay throughout the lifetime of your loan. Here are some of the factors that will impact the mortgage rate your lender will offer you.
- The economy: Mortgage rates aren’t pulled from thin air. In fact, mortgage rates fluctuate a lot like stocks do. If employment rates are stable and the economy is doing well, mortgage rates may be higher because more people are buying homes. If the economy is not doing as well and the housing market is suffering, you may be able to secure a lower mortgage rate.
- Your credit score: The economy can impact the range of mortgage rates but your credit score will impact your personal mortgage rate. Lenders will use your credit score to rank how financially reliable you are.
If your credit score shows that you make your payments on time and manage your debt well, your lender may feel comfortable offering you a lower rate. In any case, your credit score will have to meet the lender’s minimum requirements for you to get approved for a mortgage.
- Mortgage type and term: The mortgage type and term you choose can also impact your mortgage rate. Some home buyer programs offer lower mortgage rates than conventional loans. If you choose a shorter mortgage term, your lender may offer you a lower interest rate as well.
What is a Mortgage Type?
Mortgage types are the type of loan that you choose for your mortgage. Here are some of the options you may be able to choose from.
- Conventional: Conventional mortgages are offered by the lender and are not guaranteed or insured by the federal government. You’ll need to meet the minimum income and credit score requirements to qualify for a conventional loan. Most lenders require a minimum credit score of 620 for a conventional loan.
- FHA: FHA loans are part of a mortgage insurance program managed by the Federal Housing Administration. This mortgage type offers lower minimum credit score requirements and lower minimum down payment requirements.
- USDA: USDA loans are backed by the U.S. Department of Agriculture. To qualify for this mortgage type, you’ll need to meet minimum requirements. One of the requirements is that the home you’re purchasing must be in a designated area determined by the USDA.
- VA: VA loans are offered by the U.S. Department of Veterans Affairs to those who meet its service requirements. You can finance up to 100% of your home’s purchase price with a VA loan.
What is a Mortgage Term?
Your mortgage type will also come with a mortgage term. This is the amount of time that you’ll spend repaying your mortgage.
- 30-year fixed: A 30-year mortgage term means that you will repay your mortgage in monthly installments over 30 years. A fixed-rate mortgage means that your interest rate will not change during the lifetime of your loan.
- 15-year fixed: A 15-year fixed-rate mortgage is similar to a 30-year fixed-rate mortgage. You’ll repay your mortgage over 15 years with the same interest rate throughout the lifetime of your loan. While your monthly payments will be higher, you’ll pay less interest over time if you repay your loan over 15 years instead of 30.
- 5/1 ARM: A 5/1 adjustable-rate mortgage (ARM) means you’ll pay a fixed interest rate for the first 5 years of your loan. After that, your interest rate will change once per year until your mortgage is paid off.
Current Kentucky Mortgage Rates
Mortgage rates fluctuate because they are based on mortgage-backed securities traded much like stocks.
Benzinga monitors these changes and regularly updates our current mortgage rate charts to reflect the most recent data.
Calculating Interest in Kentucky
Your mortgage rate will play a huge part in how much you pay over the lifetime of your loan.
Each month, your lender will use your mortgage rate and the amount you owe on your loan to determine your interest payment.
|City||Average Home Value||Loan Term||Current Rate||Downpayment (20%)||Monthly Payment||Total Interest Paid|
|Bowling Green||$185,100||30-year fixed||6.356%||$37,020||$921.99||$183,836.40|
Lender Credit Score Minimums in Kentucky
Lenders have minimum credit score requirements because credit scores are used to determine how financially reliable you are. Factors that impact your credit score include your credit history, the amount of debt you owe and whether you make your payments on time.
Get familiar with your favorite lender’s websites and request free quotes to compare mortgage rates for the products that fit you.
Remember, preapproval for your mortgage will show buyers that you’re serious and ready to make an offer. Take advantage of the affordable lifestyle Kentucky offers and move forward with your home mortgage today.
Get Ready for Take Off
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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.