Current Kentucky Mortgage Rates

Product (Rate Program)RateAPR
Fixed30Year4.163%4.219%
Fixed15Year3.526%3.622%
ARM53.833%4.724%

 

Shopping for home loans in Kentucky? Looking for the best mortgage interest rates?  Comparison shopping for Kentucky mortgage rates isn't difficult, but there are some things you need to know up front.

First, don't focus just on mortgage rates.  The rates are only part of the picture. You also have to be aware of the fees charged as part of the loan.  Closing costs can be range from 2-6 percent of the loan amount on a Kentucky mortgage, which is substantial.  Shop for the best combination of rates and fees.

Second, you have your choice of many different types of home loans in Kentucky. Find the one that's best for you.  Is a conventional mortgage your best choice, or might you be better off with an FHA loan? If you're a veteran, don't automatically assume a VA loan is your best bet. Fixed-rate or adjustable?

Third, the rate you pay will depend in part on you, the borrower. Kentucky mortgage lenders base the rates they charge on, among other things, a borrower's credit score, down payment, size of the loan, loan type, length of the loan and more. You can't just check current Kentucky mortgage rates and assume that's the rate you'll pay.  You have to find the lender and loan with the best rate and terms for you.

Fourth, shop around.  Don't automatically assume your regular bank is your best choice.  Check with multiple Kentucky mortgage brokers and lenders before making a choice.  The lender who has the best mortgage rates in Louisville may not have the best rates in Lexington, or in rural Kentucky.  And don't just limit yourself to local lenders – these days, you may find your best deal online.

 

Kentucky home loan programs

As mentioned above, you've got a lot of options for Kentucky home loans. Below are some of the main ones.

 

Conforming mortgages

Also called conventional mortgages, these are home loans that meet the standards set by Fannie Mae or Freddie Mac, two government created agencies established to promote affordable mortgages for average Americans.  Loans that conform to Fannie/Freddie standards are considered less risky for mortgage investors, which helps keep their rates low and allows them to offer favorable terms, like 30-year fixed-rate mortgages. 

Down payments can be as little as 3 percent for borrowers with strong credit, but putting down more will likely get you a better mortgage rate, and putting at least 20 percent down will allow you to avoid private mortgage insurance (PMI) payments as well.

 

Kentucky FHA Loans

A popular alternative to conforming mortgages, FHA loans are designed for first-time homebuyers and others with limited means and/or weaker credit.  Kentucky FHA loan requirements allow lower credit scores than conforming loans do, and often result in better credit scores for those borrowers as well. Down payments can be as little as 3.5 percent.

FHA loans also provide an option for Kentucky borrowers looking for a fixer-upper – the FHA 203(k) loan, or rehabilitation mortgage, which combines a purchase and home improvement loan into a single mortgage.   

Kentucky FHA loan requirements don't allow you to borrow as much as you can with a conforming loan but will easily cover the price of most Kentucky homes.

 

VA Loans

If you're a military veteran or an eligible active-duty service member, there's a lot to like about VA loans. Mortgage rates are competitive and no down payment is required for first-time borrowers up to generous limits.

However, don't assume a VA loan is the best choice, even if you qualify. Check the rates and fees – some Kentucky mortgage brokers and lenders may have a better deal for you on a conventional or FHA loan. 

 

Kentucky home improvement loans

For home improvements, Kentucky borrowers typically look to home equity loans to borrow the funds needed. These are loans secured by the value of your home, so they come with lower rates than other, unsecured types of loans.

Home equity loans come in two types: a standard  home equity loan and a home equity line of credit (HELOC).  The standard loan lets you borrow a single sum of money while a HELOC gives you a line of credit you can borrow against as needed.  The standard is good for projects for which you're going to write a single check, while HELOCs work well for projects where you need to make various expenditures spread out over time.

To qualify for these loans, you have to have a certain amount of home equity – that is, the portion of your home value that's paid for.  You generally want to have at least 20 percent equity left after taking out the loan; some lenders will let you go as low as 10 percent, but expect to pay significantly more for the loan.

A different type of home improvement loan available to Kentucky borrowers is the FHA 203(k) loan, mentioned above.  This loan can only be obtained as part of a home purchase, but allows you to borrow additional funds for home improvements, based on the anticipated improved value of the home.

 

Online Mortgages

As mentioned above, these days it's not necessary to limit yourself to lenders with a nearby branch when seeking a mortgage.  Online mortgage lending gives you a greater range of options and the convenience of doing most of the process right from your computer at home or your office. Your reach becomes national – you may find the best mortgage rates in Louisville are offered by a lender that doesn't even have an office in Kentucky (though they must be licensed to lend there).

Online lending allows you to shop for rates, choose a loan and lender, and submit your application and documentation online.  Follow-up questions and additional documents can be submitted online as well – you don't need to make a special trip to a bank branch.

 

Finding a Lender

When shopping around, you can contact lenders individually to request rate quotes based on the loan you're seeking, your credit score and other information. You can also use our rate request form at the top of this page to request personalized rate quotes from multiple borrowers at the same time – it's a free service and there's no obligation on your part. You can request rates for home purchase, refinance or home improvement loans, and many lenders also offer options for VA and FHA loans as well.