Kentucky Mortgage Calculator

Best mortgage lenders in Kentucky

The most popular mortgage lenders in Kentucky operate nationwide. These include such recognizable names as Rocket Mortgage, AmeriSave, Beeline Loans Inc. Several lesser known but reliable options include Kentucky-based Benchmark Mortgage, Pro Mortgages of Kentucky LLC.

How to calculate mortgage payment in Kentucky

Use our mortgage calculator KY to evaluate your future expenses. A detailed step-by-step instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Kentucky for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Kentucky parameters.

The initial aspect to consider is the home price, which represents how much you intend to invest in your future property. The down payment constitutes the portion of this price that must be paid upfront. To avoid costly insurance, it's imperative to come up with a minimum of 20% down payment, especially in the case of a conventional loan. The remaining portion constitutes the principal, which equals 80% of the home price when a 20% down payment is applied.

The loan term refers to the duration within which you will fully repay your mortgage through scheduled payments. Fixed-rate conforming loans typically have a maximum term of 30 years, while adjustable-rate options generally feature shorter terms.

An interest rate represents a fixed or variable fraction of the principal amount that you are obligated to pay throughout the loan's duration. It's essential to note that you are actually charged an annual percentage rate (commonly abbreviated as APR), which is not precisely identical to the interest rate. Although the interest rate forms the bulk of the APR value, the latter also encompasses various fees, such as origination fees, closing costs, insurance payments, and more.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in Kentucky, given a $400,000 home price and a 10% down payment.

Median property taxes in Kentucky counties

Property tax is another crucial factor to take into account when choosing your future home. Many lenders require the establishment of a mortgage escrow account to ensure that borrowers remain current with their tax and insurance expenses.

Source: American Communities Survey 2016, U.S. Census

Kentucky Housing Market 2024

The past year has seen a steep increase in the market value of housing in Kentucky. This perpetuates an enduring trend that was intensified by the COVID-19 pandemic. However, the rate of growth has slowed compared to the previous year, even as both purchase and refinance rates have been steadily climbing for a while and are anticipated to continue increasing in the near future.

How do I calculate my mortgage payment?

The easiest way to accomplish this is by utilizing our calculator, which operates based on a straightforward formula. You can also calculate the amount manually using the same formula if you prefer.

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Imagine you are applying for a 15-year mortgage loan with a fixed 6.99% APR (which is .0699 as a unit fraction). The house costs $500k, with 10% ($50,000) to be paid down. The principal amount (P) will be equal to 90% of the initial home cost ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in Kentucky

To begin with, several federal agencies (USDA, FHA, and VA) provide loan options for specific borrowers, offering numerous options that best suit their budget.

Besides these government-guaranteed programs, it is worth considering some offers from UHC (Kentucky Housing Corporation) available to Kentuckyns. In particular, first-time home buyers can apply for FirstHome – down payment and closing costs assistance program, if they qualify for a FHA loan and their FICO score is at least 660. This option covers up to 6% of the loan amount toward down payment and/or the closing costs. It is important to note that this option comes in the form of a 30-year-fixed-rate second loan only. If you do not qualify for the FirstHome program, do not despair. Kentucky Housing Score Loan is an alternative program that covers up to 4%. The minimum satisfactory credit score is 620.

Here are some valuable tips for first-time homebuyers:

1. Obtain pre-approval in advance. This enhances your credibility in the eyes of home sellers. It's highly advisable to secure pre-approval letters from not just one, but ideally two or three different lenders.
2. Compare mortgage rates from different lenders. Opt for at least three lenders; the more options you explore, the better your decision-making.
3. Perform initial financial calculations based on your pre-approved amount to help you plan your future expenses effectively.
4. Begin saving for a down payment as early as possible and set aside as much as you can. A larger down payment reduces the principal amount, which, in turn, can lower your potential expenses. Therefore, it's crucial to start saving well in advance.
5. If you qualify for a VA loan, give this option top consideration.
6. Explore government-backed programs and local assistance initiatives. These may present enticing opportunities, so be sure not to overlook them.
7. Whenever feasible, work on paying off any existing debts to improve your financial situation and enhance your eligibility for favorable loan terms.