Today’s Kentucky Mortgage Rates

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ByChristopher Boston
Edited byJonathan Ramos
ByChristopher Boston
Edited byJonathan Ramos

Updated: October 29, 2023

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More people own homes in Kentucky than the national average, and that's saying something! If you're looking to join the ranks of homeowners in the Bluegrass State, a mortgage can make that dream a reality. A mortgage is a loan to buy a home. There are several factors to consider when choosing the one for you, including the mortgage rate. It affects how much you'll pay back over time, so finding the best rates in Kentucky can help make your mortgage experience much smoother and more affordable.

Current Mortgage Rates in Kentucky

According to FRED Economic Data, the homeownership rate in Kentucky stood at an impressive 71.4% in 2022, outpacing the national average of 65.9%. Mortgages likely played a significant role in these numbers.

If you’re considering getting a mortgage in Kentucky, it’s best to know what the current mortgage rates are. On average, a 30-year fixed-rate mortgage in Kentucky is 6.89%, slightly lower than the national rate of 7.10%. Similarly, 15-year fixed rates are at 6.26% in Kentucky, compared to 6.32% nationwide. Five-year adjustable rates are around 7.16% in Kentucky, while the national average stands at 7.27%

Remember that rates can change due to varying economic conditions and Federal Reserve policies. So, staying updated on current mortgage rates in Kentucky is a smart move. Remember that Kentucky offers various mortgage types, each with its own rate, so you've got options.

Finding the Best Mortgage Rates in Kentucky

Your mortgage rate is more than just a number — it's a cornerstone of your financial well-being for years to come. Securing a lower rate can save you thousands over the life of your loan. So, how do you make sure you're getting the best rate? Here are some lesser-known but effective tips:

  • Researching Economic Indicators: Economic factors like inflation rates and Federal Reserve policies can directly impact mortgage rates. Being savvy about current economic conditions can help you predict when rates might drop. You can time your application to secure a lower rate.

  • Utilize a Mortgage Broker: Mortgage brokers have access to various lenders and can negotiate better rates on your behalf. They understand the complexities of the mortgage market and can identify the best rates available, sparing you the legwork.

  • Rate Locking: Once you've zeroed in on a rate you're comfortable with, it's smart to lock it in. It ensures your rate won't rise before you close on the home. Just be aware that rate locks have expiration dates, so coordinate with your lender to close within that period.

  • Local Credit Unions: These community-focused organizations often offer rates that are as competitive, if not better, than those from larger banks. Membership benefits can also include reduced fees or discounted rates, making them a worthwhile option to explore.

  • Opt for Shorter Terms: If you're able to make higher monthly payments, a shorter-term loan — like a 15-year fixed-rate mortgage — usually comes with a lower interest rate. This could lead to substantial interest savings over the life of the loan.

Finding the best mortgage rates in Kentucky goes beyond your credit score; it's about timing, strategy and sometimes your workplace. With these unique tips, you'll be better equipped to secure a mortgage rate that benefits you in the long run.

Mortgage Types in Kentucky

The average home value in Kentucky is $216,151, which is considerably less than the U.S. average of $348,126. This can be another factor contributing to the state's high homeownership rate. Even with more affordable housing, a mortgage can help you buy a home without draining your bank account upfront. In Kentucky, you'll have various mortgage options to choose from, which we'll lay out in the table below.

Mortgage Options
Benefits
Drawbacks

Conventional Loans: A standard loan not backed by the government.

Competitive rates and flexibility in terms; possibly no Private Mortgage Insurance required if your down payment is 20% or higher.

Requires a higher credit score; a larger down payment is often needed.

Jumbo Loans: A loan that exceeds federal loan limits.

Allows for larger home purchases; may offer additional features like interest-only payments.

Stricter credit and income requirements; typically higher interest rates.

FHA Loans: Federal Housing Administration-backed loan.

Accepts lower credit scores; smaller down payment.

Higher costs for mortgage insurance; loan limits apply.

VA Loans: A loan backed by the Department of Veterans Affairs.

No down payment or PMI required; often lower interest rates.

Available only to qualified veterans; it may include a funding fee.

USDA Loans: Loans for rural property backed by the U.S. Department of Agriculture.

No down payment required; reduced mortgage insurance.

Must meet income and geographic restrictions; limited to certain rural areas.

After you've explored these mortgage types, it's equally valuable to understand how the interest rate structures work. Let's dig deeper.

  • Fixed-rate Mortgages: With this structure, you lock in a single interest rate for the life of the loan. It's a solid choice if you're settling down for the long haul. You'll have predictable monthly payments, but these often start higher compared to those for adjustable-rate mortgages.

  • Adjustable-rate Mortgages: These loans start with lower rates that adjust over time. While this could mean initial savings, your rate and payments can increase, sometimes substantially. It might suit you if you plan to sell or refinance your loan before the rates climb.

Remember, while Kentucky's home values may be more affordable, the right mortgage can help you make a smarter, more sustainable investment in your future. By fully understanding your options and keeping an eye on the best mortgage rates in Kentucky, you set yourself up for a fulfilling, financially savvy homeownership journey.

CALCULATOR KNOW-HOW: A SMOOTHER PATH TO YOUR KENTUCKY HOME

A mortgage calculator can be your best friend when you're house hunting. By inputting some numbers, like the loan amount and interest rate, you can get a clearer picture of your future monthly payments. We recommend playing around with MoneyGeek's mortgage calculator to make a well-informed decision. It's a handy tool that can help you nail down the right mortgage in Kentucky, considering the state's specific mortgage rates and options.

How to Get a Mortgage in Kentucky

Understanding how to secure a mortgage in Kentucky puts you in a stronger position for homeownership. It allows you to get a hold of your dream home and ensures you're not left in the dark during the process. Here's a step-by-step guide to walk you through.

1
Pre-Approval

First, seek pre-approval from a mortgage lender. It shows sellers you're a serious buyer and gives you an idea of how much you can afford. For a faster pre-approval, keep your income statements, credit reports and other financial documents organized and ready for review.

2
Research Rates

It's crucial to monitor current mortgage rates in Kentucky. Knowing the average rates can help you spot a good deal when you see one. Use reliable financial websites to keep track of the market.

3
Choose a Mortgage Type

The next step is choosing the type of mortgage that's right for you, whether it's a conventional, FHA or USDA loan. Each has pros and cons, such as down payment requirements and interest rates. Do some research or consult with your lender to determine what fits your financial situation best.

4
Submit an Application

After you've picked a mortgage lender and loan type, you'll need to fill out a mortgage application. It will require detailed financial information, so take your time and ensure accuracy to avoid delays.

5
Home Inspection and Appraisal

These are crucial steps before you can close the loan. A home inspection helps identify any issues with the property that may need improvements. Meanwhile, an appraisal will confirm the home's value. It's best to schedule these promptly to keep the loan process moving smoothly.

6
Close the Loan

It's the final step, where you'll sign all the necessary documents, finalize your down payment and pay any remaining closing costs. Once done, the loan and home are yours.

Getting a mortgage involves several steps, each crucial to the outcome. Being proactive and informed, especially regarding current mortgage rates in Kentucky, helps you navigate the complexities with greater ease and confidence.

Mortgage Programs in Kentucky

Owning a home is exciting, but it comes with its share of costs, like property taxes and maintenance. The Kentucky Housing Corporation offers programs that can ease some of these financial burdens. These provide down payment assistance and even offer reduced mortgage rates in Kentucky for qualifying individuals. Whether you're a first-time buyer or looking to move, these programs can help make your homeownership dreams more attainable.

Mortgage Revenue Bond

The Mortgage Revenue Bond program by Kentucky Housing Corporation offers both first-time and repeat homebuyers a 30-year fixed interest rate that's below market value. This special offer is available if you plan to make the house your primary residence. There's a purchase price limit of $481,176 and income limits that you'll need to meet. This program could make a significant impact on your current mortgage rates in Kentucky, so it's worth looking into.

Conventional Preferred and Conventional Preferred Plus 80

If you're seeking the best mortgage rates in Kentucky, the Conventional Preferred and Conventional Preferred Plus 80 programs could be your ticket. Both require a minimum credit score of 660 and a manageable 3% down payment. Where they diverge is in their monthly mortgage insurance options.

Conventional Preferred comes with "charter coverage," a type of mortgage insurance often with lower monthly payments. It can be canceled when your loan-to-value ratio drops below a certain level. On the other hand, Conventional Preferred Plus 80 offers "standard coverage," which is a more traditional form of mortgage insurance, usually with higher premiums but greater coverage in case of loan default.

Neither program asks for a minimum borrower contribution or reserves, making them accessible choices. Plus, both programs work seamlessly with KHC's Down Payment Assistance, providing a comprehensive approach to securing your new home.

Home Buyer Tax Credit

This program can offer significant financial relief if you're planning to buy a home in Kentucky. It allows for a dollar-for-dollar reduction of your federal income taxes every year you live in your new home. Specifically, the tax credit is equal to up to 20% of the annual mortgage interest you pay in a calendar year.

Eligibility isn't just limited to first-time homebuyers — others can consult with a KHC Approved Lender to see if they qualify. Just be aware that both purchase price and income limits apply, with the purchase price capped at $481,176. It can be a valuable opportunity to offset some of the current mortgage rates in Kentucky.

Down Payment Assistance

This program offers a loan of up to $10,000 to assist with down payments, closing costs and prepaids. The loan is repayable over a 10-year term at a 3.75% interest rate, making it a manageable addition to your monthly budget.

You're eligible for this assistance as long as you're a recipient of any KHC first mortgage loan. While there's no liquid asset review or limit on borrower reserves, some specific credit underwriting standards may apply. With options like this, finding the best mortgage rates in Kentucky becomes a more achievable goal.

Frequently Asked Questions

Not everyone is familiar with the mortgage rates in Kentucky, so we gathered the most common questions borrowers ask. These provide you with more information to make educated choices for your home financing.

What are the current mortgage rates in Kentucky?
What are the primary factors driving mortgage rates in Kentucky?
How do different types of employment affect your mortgage rate in Kentucky?
Do first-time homebuyers get special mortgage rates in Kentucky?
Can a larger down payment get you a better mortgage rate in Kentucky?
Can you get a lower mortgage rate in Kentucky with a co-signer?
How straightforward is it to compare mortgage rates from different lenders in Kentucky?
What should you consider when choosing between a 15-year and a 30-year mortgage in Kentucky?

About Christopher Boston


Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.


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