What is a mortgage?Â
A mortgage is a loan you receive in order to finance the purchase of your home or commercial property for your business. Mortgage lenders will usually be a financial institution, such as a credit union or a bank, and loan arrangements can be made indirectly or directly through intermediaries. Features of a mortgage loan such as the maturity and size of the loan, interest rate, pay off method, and many other characteristics may vary considerably. The mortgage rates will even vary from state to state, for example, Kansas mortgage rates are much better than Tennessee or New York mortgage rates. The main factors that define the characteristics of a mortgage are the interest, the term, payment amount and frequency, and prepayment. The interest can be fixed for the entirety of the loan or variable, or may change at a certain, pre-determined period. The interest rate can also be higher or lower. Typically, mortgage loans have a maximum term, which is the amount of time it will take to repay the amortizing loan. Although, some mortgage loans have no amortization and require full repayment of the remaining balance on a certain date. It is even possible for negative amortization to occur. As a borrower, in some cases, you will have the option to increase or decrease the amount of your payment per period. Certain types of mortgages can limit or restrict prepayment of all or a portion of the loan, or require payment of a penalty to the lender for prepayment.
What are the basic types of amortized loans?Â
There are two basic types of amortized loans, fixed rate mortgages and adjustable-rate mortgages. Combining the two mortgages is also common. This is where a mortgage loan will have a fixed rate for a certain period of time and then change after the end of that time period. The interest rate remains fixed for the entire term of the loan in a fixed rate mortgage. In an annuity repayment scheme, the periodic payment remains the same amount throughout the loan. In a linear payback, the periodic payment will gradually decrease. An adjustable rate mortgage generally has the interest rate fixed for a period of time, after which it will adjust up or down to some market index annually or monthly. Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and therefore, are widely used where fixed rate funding is difficult to obtain or prohibitively expensive. The charge to the borrower depends on the interest rate risk and the credit risk. The mortgage origination and underwriting process include checking debt-to-income, credit scores, assets, and down payments. Government guarantees do not support jumbo mortgages and subprime lending, therefore, they face higher interest rates. Many other factors can affect the rates as well.
What are the current mortgage rates in Kansas?
The current mortgage rates in Kansas are pretty good. For a 30 year fixed mortgage loan, you would be looking at an interest rate of 3.82%, which is down from last week’s 3.91%. A 15 year fixed is 2.78%, which is up 0.01 from last weeks 2.77%. A 5/1 adjustable rate mortgage is 3.17%, which is down 0.03 from last weeks 3.20%. A 30 year fixed mortgage refinance is 3.83%, which is down 0.09 from last weeks 3.92%. A 15 year fixed mortgage refinance is 2.85%, which is up 0.06 from last week’s 2.79%. A 7/1 adjustable rate mortgage refinance is 3.02%, the same as last week. A 15-year jumbo fixed mortgage refinance is 3.68%, which is down 0.02% from last week. The national average for a 30 year fixed rate mortgage is 3.78%, just barely under the Kansas average. The Kansas 15 year fixed rate mortgage average is 2.78%, which is a whole 0.42% below the national average of 3.20%. Currently, the average price of a single-family home in the United States is over $260,000, while in Kansas, the average price for a single family home is just $185,488. Kansas also has the benefit of having towns, cities, and rural areas all within a short drive.
What are the Kansas mortgage rate predictions for 2016?
For the most part, the mortgage rates are predicted to change very little. There does seem to be a more likely increase in rates rather than a decrease, but the increase should not exceed more than 0.50% throughout the entire year. Although, some experts have said that an increase of .75% is possible to occur. With the Kansas mortgage rates currently very good, the right time to buy is now. Although, even with a small increase this year, the rates will still be good. How much the rates will change depends on many things, including ongoing unemployment figure, how the market reacts to the federal funds rate increase, inflation, demand for the US dollar, the global economy, and other factors as well.
Need some tips for getting a better Kansas mortgage rate?
Improve your credit score, because that will play a big part in the mortgage rate. Save some money to make a decent down payment. By making a down payment of 20 percent or more, many lenders will offer a lower mortgage rate. Contact many different financial institutions, different lenders will offer a variety of different rates and it is important to find the best one. Do your own research and find out about and hidden fees. Call lenders on the same day because the rates fluctuate constantly. If you are planning to stay living in your home for a long period of time, you may want to pay by points. A point is equal to one percent of your loan. Paying by points will help to keep the rate as low as possible for the entire term of the loan.
2 Point Highlight
With the Kansas mortgage rates currently very good, the right time to buy is now.
