Our Top 5 Kentucky Mortgage Lender Picks

With median home prices at $141,000 and an abundance of rural areas, Kentucky is within the top ten states with the lowest home prices. However, you also need to find the best mortgage lender to take advantage of these low home prices.

Finding a lender that fits your needs will help you get the best Kentucky mortgage rates and make your home buying process easier. Fortunately, we’ve got you covered. Read on for a complete guide on the five key criteria of a good lender and a rundown on the top 5 Kentucky mortgage lenders!

Choosing A Kentucky Mortgage Lender 

Picking the right mortgage lender as a Kentucky home buyer is tricky. In addition to their rates, you need to find which one provides the best service and caters to your unique needs. To help your search, here are five criteria you can use to compare multiple lenders in Kentucky and find out which one fits you the best.

Mortgage Loan Products Offered

Choosing the right loan program for your Kentucky home is one of the most important steps in home buying. Here is a rundown on the most common loan types to help you choose which one best fits your needs:

• Conforming mortgages: Any home loans that don't exceed the state’s limit on mortgage loan amounts set by guarantor companies Fannie Mae & Freddie Mac. Conforming loan limits in Kentucky are set at the national standard of $548,250.
• Jumbo mortgages: An alternative loan program to purchase more expensive homes, jumbo loans can exceed local lending limits. However, jumbo loans have higher mortgage rates and monthly payment amounts.
• Fixed-rate mortgages: A loan program that features static interest rates. Fixed mortgages are stable and good for long-term financial planners.
• Adjustable-rate mortgages (ARMs): As the name implies, an adjustable-rate mortgage features shifting interest rates. However, they also feature an initial period of fixed rates that range from 3 to 10 years. 
• Government loans: Federal government-sponsored mortgages usually offer benefits like a better rate and lower down payment requirements. These loans are provided by the U.S. Department of Agriculture, the Department of Veterans Affairs, and the Federal Housing Authority. 
• Mortgage refinancing: When you take a mortgage refinance, you get a new loan to repay your current home loan. These are often used to save money by getting better refinance rates or changing your mortgage loan terms. You can also liquidate through cash-out refinancing. 
• Home equity lines of credit (HELOC): A form of home equity loan that works similar to credit cards, except using your home as collateral. 

Affordability 

Kentucky mortgage rates constantly change and can vary depending on your unique situation. That’s why we measure affordability based on how easy it is for customers to qualify for a mortgage. Here are our four criteria:

• Minimum credit score: Credit scores measure your ability to make debt payments on time. Most lenders require a minimum score of 620 on your credit report to qualify for a home loan, but some may ask for higher or lower scores. 
• Minimum down payment: As a rule of thumb, mortgage loans require 20% down payments. However, some lenders allow you to make a minimum of 3% in down payments. Paying less than 20% down usually requires you to take private mortgage insurance.
• Closing costs: These are extra expenses that may consist of application fees, origination costs, and other fees you need to pay for. They usually cost up to 5% of your total mortgage.
• Homebuyer assistance programs: Many states have housing authorities that run first-time homebuyer assistance programs. They usually offer down payment assistance and closing cost grants for both first-time and repeat homebuyers.

Application Process

The ease of application is also an important point of consideration when deciding on your Kentucky lender. There are three things you need to examine:

• Availability of online application: Being able to apply for loans online is a large advantage – not everyone can easily visit branch offices in person.
• Rate transparency: Displaying interest rate estimates on the website helps prospective borrowers compare between multiple lenders. Some lenders offer estimates on their home page, while some others require you to input financial information. 
• Length of the application process: Lenders usually take anywhere between a few weeks and several months to close your loan. Be sure to factor this into your plans so you don’t end up losing out on a home because your closing takes too long.

Customer Service And Ratings

The best lenders usually have excellent customer service, which is why review scores are essential. For a uniform standard, we use two customer research organizations: J.D. Power and Better Business Bureau (BBB). 

The BBB measures a company’s trustworthiness with a letter grade ranging from A+ to F. Key factors examined in their reviews include response to complaints and history of corrective government action, among others.

J.D. Power examines the customer satisfaction of companies across many industries. For mortgage lenders, they measure things such as loan processing time, customer service, and communication to consumers. 

Access To Services

Lender accessibility is essential – great mortgage rates and excellent service means nothing if they can’t help you buy a home in Kentucky. This criterion examines the lender’s service area and how many branch offices, loan officers, and mortgage brokers they have nationwide.

Having a limited number of branches or even no branches at all in Kentucky isn’t necessarily a deal-breaker. However, good branch coverage helps customers get face-to-face assistance from a loan officer when needed. 

The Best Kentucky Mortgage Lenders

1. Caliber Home Loans – Best Online Service

Credit score requirement: 620 (580 for FHA & VA)

Down payment requirement: 3%

Mortgage products offered: 

• Fixed-rate mortgage
• ARM
• Jumbo mortgage
• FHA, VA, & USDA mortgages
• Mortgage refinancing

BBB Rating: A+

J.D. Power score: 828 in the 2020 study

Overview: Texas-based mortgage lender Caliber is one of the highest-volume mortgage lenders in the country, offering a wide variety of loan products. In addition to government and conventional loans, Caliber also offers a renovation loan called the HomeStyle Renovation Mortgage.

A new borrower can easily apply for a purchase loan from Caliber through its online portal. You can also use its smartphone app to upload documents, track your loan status, and contact your loan officer.

Lender availability: Provides loans in all 50 states and Washington D.C. with 340 offices nationwide

2. CMG Financial – Best For Product Variety

Credit score requirement: 620

Down payment requirement: 3%

Mortgage products offered:

• Fixed-rate mortgage
• ARM
• Jumbo mortgage
• FHA, VA, & USDA loan
• Mortgage refinancing

BBB Rating: A

J.D. Power score: N/A

Overview: CMG Financial offers all the mortgages commonly found in many similar lenders plus several proprietary programs. CMG’s HomeFundIt allows you to get down payment assistance through crowdfunding, while the All In One Loan combines regular banking with mortgage payments.

However, the company only has an A rating on the Better Business Bureau, compared to the A+ achieved by its closest competitors. Many of the complaints leveled at CMG cite mistakes in the interest payment process, resulting in some borrowers having to make the same payments twice. This puts it somewhat lower than other mortgage lenders in terms of customer service.

Lender availability: Services loans nationwide with branch offices in 44 states

3. Navy Federal Credit Union – Best For Veterans

Credit score requirement: N/A

Down payment requirement: 0%

Mortgage products offered:

• Fixed-rate mortgage
• ARM
• Jumbo mortgage
• VA loans
• Mortgage refinancing

BBB Rating: N/A

J.D. Power score: 867 in the 2020 study

Overview: Founded in 1933, Navy Federal provides a host of financial services to its members. Its 9 million members, from various military branches and the Department of Defense, make Navy Federal the largest credit union in the world. 

Navy Federal offers both fixed and adjustable-rate mortgages to its clients. ARMs are especially popular since they’re cheaper for military homeowners that need to move homes often. 

Navy Federal also offers the HomeBuyers Choice and Military Choice purchase loans. Both programs offer zero-down mortgages without insurance premiums – you can fold your funding fee into the loan, meaning you spend much less on closing.

Lender availability: Available nationwide with 322 branches in 30 states

4. Chase – Best For Grants And Discounts

Credit score requirement: 620

Down payment requirement: 3%

Mortgage products offered:

• Fixed-rate mortgage
• ARM
• Jumbo mortgage
• VA & FHA loans
• Mortgage refinancing
• Home equity loans

BBB Rating: A+

J.D. Power score: 860 (third place in 2020 study)

Overview: As part of JPMorgan Chase & Co, Chase Home Lending is one of the largest players in the home loan industry. It offers the typical suite of conventional loans found in many other lenders as well as government-backed loans like FHA and VA loans.

Chase is notable for its grants and discounts. For instance, its DreaMaker loan offers a mortgage with only a 3% down payment and a grant of $500 if you finish a first-time homebuyers’ education course. Meanwhile, people buying homes in certain low-income areas may qualify for up to $5,000 in grants.

Chase also offers extra benefits if you’re already a customer. Mortgage borrowers who have Chase accounts may be eligible for a lower rate and closing cost discounts.

Lender availability: Services loans nationwide with offices in 29 states

5. LoanDepot – Best For Refinancing

Credit score requirement: 620 (580 for FHA)

Down payment requirement: 5%

Mortgage products offered:

• Fixed-rate mortgage
• ARM
• Jumbo mortgage
• VA & FHA loans
• Mortgage refinancing

BBB Rating: A+

J.D. Power score: 844 in 2020 study

Overview: LoanDepot is a mortgage lender that specializes in refinancing. In 2019, 60% of its loan volume was attributed to standard and cash-out refinance loans. One of the ways that it incentivizes refinancing is by providing a “lifetime guarantee”. If you refinance a LoanDepot mortgage, your lender fees will be waived which allows you to save even more.

Applying for mortgages with LoanDepot is also made easy by the Mello Smartloan system. This platform allows you to automatically check your financial information and guides you through the entire process. It also offers secure document uploading to ensure the entire application can be done from home.

Lender availability: Services loans in all 50 states with 200 nationwide branch locations

Closing Thoughts 

There are so many reasons to live in the Bluegrass State, from the famed Kentucky Derby to good bourbon. However, the best case to live in Kentucky is the affordable home prices. 

With one of the lowest median home prices in the nation, Kentucky homebuyers are bound to find a new home and save money while they’re at it. If you’re looking to purchase a new home at those low prices, you need to find the right Kentucky mortgage lender.

Want to know more about mortgage lenders and home loan rates in Kentucky? Contact Wesley Mortgage, LLC today – our team is ready to help you get a new home in Kentucky at the best prices!