Mortgage Rates Kansas: How To Start Your Homebuying Journey
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House hunting can be a challenging experience. If you don’t have a benchmark for the area’s mortgage rates and home prices, locating the best deals will be hard. Therefore, knowing the local mortgage and refinance rates can make it easier to find the most affordable housing deals.
Are you looking to buy a home in Kansas? In this guide, we cover everything you need to know about finding a home in Kansas – read on for the latest mortgage and refinance rates.
Mortgage Options In Kansas
Like most parts of the United States, you have three choices of home loans to fund your Kansas home purchase:
Conventional Home Loan
Conventional home loans are offered by most banks and private lenders across the country. These loans are subject to loan amount limits determined by the Federal Housing Finance Agency (FHFA). For the entire state of Kansas, conforming loan amount limits are set at $548,250.
Conventional mortgages are broken down into three loan types. Here, we break down their details, rate schemes, as well as their pros and cons.
Fixed-rate mortgages feature static interest rates that remain the same despite market fluctuations. Their constant rates translate into fixed monthly payment amounts. Because they’re easy to budget, fixed-rate loans are great for first-time home buyers. However, the average interest rate & APR on a fixed-rate loan may be higher than other loan types.
Most fixed-rate mortgages have 30-year loan terms. If you’re looking for lower rates, you can opt for shorter 15-year fixed-rate or 20-year fixed-rate loans. However, these shorter loans have higher monthly payment expenses.
Adjustable-Rate Mortgage (ARM)
In contrast to fixed-rate mortgages, an ARM has an interest rate that adjusts annually. This annual ARM rate adjustment is made according to the performance of a market index. However, ARMs have an introductory period with fixed mortgage interest rates in their initial years. While the adjustable phase can be unpredictable, an ARM’s introductory period typically has lower rates which translate well into short-term savings.
The length of this introductory period differs with each ARM. While five-year introductory periods are the most common, they can last anywhere from 3 to 10 years.
The median home value in Kansas is $163,200, far under state loan limits. However, lenders offer you a way to buy homes priced above conforming limits. This option is called a jumbo mortgage, which allows you to exceed loan limits at the cost of higher rates & APR.
Government-Backed Loan Programs
If you qualify for them, government-issued mortgages offer many benefits. While qualification requirements are very specific, you can get affordable rates and pay a smaller down payment.
There are three major government-backed loan types available for U.S. homebuyers:
FHA loans: In this loan designed for low-income borrowers, you receive affordable rates and a 3% down payment minimum. However, you’re required to pay mortgage insurance fees for the entire loan.
VA loans: If you’re a qualified military member, you can get a zero-down loan with competitive rates & APR. To replace mortgage insurance fees on a VA loan, you’ll need to pay an upfront cost called funding fees.
USDA loans: This loan type is a good option if you’re looking to live in a rural area. If you buy a home in a USDA-approved area, you’ll get a zero-down-payment mortgage with lower mortgage insurance fees.
When you refinance loans, you’re taking out a new loan to replace your existing one. This can be done to achieve one of two things:
Modify your loan terms: Using a rate and term refinance, you can modify your mortgage by changing its type and length. For example, you can refinance an ARM into a fixed-rate loan. You can also shorten a 30-year loan to a 20-year loan to pay it off faster.
Liquidate home equity: Another common use for refinancing is converting home equity into cash. Cash-out refinancing provides you with a loan that’s larger than your current mortgage balance. Any money left over after paying off your loan can be used for other needs.
Current Mortgage Rates In Kansas
Past mortgage rate trends show that Kansas usually trails several points behind the national average rate & APR. In this section, we give you insider access to the mortgage and refinance rates in Kansas. All the listed information is taken from America’s top mortgage lenders. We update this table daily!
Today’s Mortgage Rates in Kansas
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Your mortgage rate & APR may vary depending on your financial circumstances. The APR & rate details on this table may change without prior notice.
For a customized look at your Kansas mortgage rates, use the tool provided at the top of this page. With your financial details, we can calculate a personal Kansas mortgage rate & APR estimate for you!
First-Time Homebuyer Programs In Kansas
Unlike many other states, Kansas only has one homebuyer assistance program it administers through the Kansas Housing Resources Corporation (KHRC). As its name implies, the KHRC First-Time Homebuyer Program offers first-time homeowner assistance in the form of a loan to cover your down payment and closing fees.
The KHRC down payment and closing fees assistance come in the form of second loans worth up to 20%. If you stay in the home for ten years without selling, your assistance loan will be forgiven.
To qualify for this program, you need to fulfill these requirements:
Qualify for a 30-year mortgage
Pay for at least 2% of the purchase with your own money
Stay under maximum home price limits
Buying A Home In Kansas
Buying homes may seem like a daunting process for first-timers. To help you understand the home buying journey, we’ve compiled this guide. Follow these steps and buy your dream Kansas home with confidence!
Step 1: Get Pre-Approved For A Loan
Before starting your hunt, you should prepare your finances. A good way to examine your financial readiness is by applying for a mortgage. Start by researching loan offers from multiple lenders and apply for the one that provides the best value. As part of the process, the lender will examine your financial health and see whether you’re eligible for a mortgage.
Once you get pre-approved for a loan, you’ll receive a pre-approval letter. This is a document containing important details of your loan like its interest rate, APR, and term length. A pre-approval letter also acts as a sign of financial readiness to buy a house.
Step 2: Recruit A Real Estate Agent
The services of a real estate agent with experience in the area are indispensable. They can help you secure the best housing deals and answer any questions you may have about the zip code. This way, you don’t have to research for key details like the average property value and commute times yourself.
Step 3: Hunt For Homes
A good rule of thumb for house hunting is to start from the neighborhood. Choose a neighborhood within your price range that fits your lifestyle. Once you’ve chosen a neighborhood, find an affordable house that still meets your needs. If things work out better than predicted (such as saving up more money), use this extra cash towards home improvements projects.
Step 4: Place A Bid For The House
With good houses often in high demand, you may have to compete with other buyers for the property of your dreams. One way to stand out is by offering a larger cash offer than what's on the listing price. To get an idea of how much more money above the listed price is reasonable, ask your real estate agent for advice before making any decisions.
Step 5: Take Due Diligence Steps
Your offer being accepted isn’t the end of your homebuying journey. Be sure to schedule visits from a home inspector and appraiser. They can spot issues in the property and determine its actual value, ensuring you get what you paid for.
Step 6: Finalize The Purchase
In preparation for the closing day, be sure you have money set aside to pay closing costs and lender fees. On the day itself, sign the necessary paperwork with your realtor as an advisor. When the paperwork is done, you’re ready to make moving arrangements.
How To Get A Better Kansas Mortgage Rate
Taking a few points off your mortgage rate & APR can save you thousands of dollars in the long run. To help you drive your Kansas mortgage rates & APR down, you can follow these three tips!
Compare Loan Offers From Multiple Lenders
Since mortgage lenders are competing for your business, they might sweeten the deal by giving you lower loan rates or discounts on fees. Before choosing a lender, be sure to compare their offers – consider their APR, rate, closing cost, lender fees, and other benefits they may offer.
Consider Buying Discount Points
You can buy mortgage points to reduce your APR & rate. Discount points are usually worth 1% of the loan and provide a 0.25% rate reduction. So if you buy 2 points on a $400,000 mortgage with a 4% rate, you’ll pay $8,000 to reduce your rates to 3.5%.
Because mortgage points are a large upfront payment made for long-term savings, they’re best bought on mortgages you won’t refinance.
Improve Your Credit Score
Your credit report is one of the most important points of consideration when it comes to determining your rates. To improve your credit score and increase your likelihood to get better mortgage rates & APR, you can do these things:
Pay bills on time
Report any mistakes on your credit report
Manage your credit cards responsibly
To properly compete in a tough housing market like Kansas, it pays to know the local mortgage rates and how to buy homes. That knowledge can put you at an advantage and help you find the best home deals.
Our consultants are ready to guide you through every step of the way in getting the best deal on your Kansas home loan. Contact our team today and schedule a personal mortgage consultation!