How to Buy a House in Kentucky: A Homebuyer’s Guide
Updated: August 1, 2023
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The average value of a home in Kentucky is $206,517. This is an average increase of 13.1% compared to median home prices in 2021. Compared to the national average of $357,589, home values in Kentucky tend to be cheaper.
If you are a first-time homebuyer wondering how to buy a house in Kentucky, MoneyGeek analyzed mortgage rates, down payment requirements and other important details. Understanding the homebuying process will help you avoid common pitfalls that can land you in debt when purchasing a home.
Choose an Ideal Location
Location is one of the major factors that will impact the cost of buying a home in Kentucky. Mortgage rates can also vary depending on location.
You will need to carefully consider the location of the house you want to buy since it impacts factors like neighborhood culture, cost of living, access to amenities and recreational activities.
Calculate Mortgage Rates
When you are planning to buy a home in Kentucky, you will have different mortgage options available to you based on your profile. Individual factors like your income, credit history and debt-to-income ratio will impact your mortgage rates.
If you want to get the best options for your profile, MoneyGeek recommends comparing lenders to determine the best deal.
Prepare Down Payment Requirements
When planning to buy a home in Kentucky, it’s important to consider your down payment options. Down payment requirements vary depending on the type of mortgage and will impact the total cost of your home loan.
Certain home loans don’t require a down payment, while others might require you to put down up to 20%.
Get Pre-Approved for a Mortgage
When planning to buy a home in Kentucky, it is important to get pre-approved for a mortgage. A pre-approval is a commitment from the lender stating they are willing to loan you a specific amount.
A pre-approval is different from a prequalification since the prequalification only indicates that you qualify for a loan. It is not a commitment to lend you the money.
Conduct a Home Inspection
A home inspection is a vital part of the homebuying process since it ensures that you uncover any significant problems before you purchase the property. If the home inspection uncovers any major flaws, you can opt to forego the property or renegotiate with the seller.
Keep in mind that some lenders will only finance your home if a professional home inspection has been done.
Close Your Mortgage Loan
Closing your mortgage loan is the final step of the homebuying process. It is important to review and understand the terms and rates of your mortgage fully before signing up.
Keep in mind that the closing process comes with certain costs that you will need to meet as the buyer. For low-income homebuyers, down payment assistance programs in Kentucky can help with closing costs.
Kentucky Homebuying Details
Homebuyers in Kentucky can access different types of mortgages. Down payment assistance programs are also available for low and middle-income individuals who need help affording down payment and closing costs.
It is important to explore all the options available to you carefully since mortgage payments require a long-term commitment.
Kentucky’s regular DAP program is available to first-time homebuyers in the state for homes of up to $349,525 with Secondary Market.
Depending on your specific location, there may also be special assistance programs available in your area. For instance, homebuyers in Louisville, Kentucky, may qualify for the Louisville Metro Down Payment Assistance Program.
Don’t forget to look for assistance programs offered by the federal government that can help you afford a home.
Frequently Asked Questions About Buying a Home in Kentucky
If you want to learn more about how to buy a house in Kentucky, MoneyGeek answered frequently asked questions to give you more information.
sources
- Consumerfinance.gov. "What is a Closing Disclosure." Accessed October 21, 2022.
- Kentucky Department of Revenue. "2022 State Real Property Tax Rate Drops to 11.5 Cents." Accessed November 25, 2022.
- Kyhousing.org. "Down Payment Assistance." Accessed October 21, 2022.
- Louisvilleky.gov. "Down Payment Assistance Program." Accessed October 21, 2022.
- Meric.mo.gov. "Cost of Living Data Series." Accessed October 21, 2022.
- Usda.gov. "Is mortgage insurance required for a Rural Housing Service single-family loan." Accessed October 21, 2022.
- Usda.gov. "Single Family Housing Direct Home Loans in Kentucky." Accessed October 21, 2022.
- Zillow.com. "Compare Today’s Mortgage Rates in Kentucky." Accessed November 25, 2022.
- Zillow.com. "Kentucky Home Values." Accessed November 25, 2022.