Kansas Mortgage Rates

Living in Kansas

Kansas may be known for tornadoes and all things Wizard of Oz, but there is more to the Sunflower State. As the 15th largest state by area, Kansas is also one of the country’s top producers of wheat, grain sorghum and beef. Visitors, meanwhile, will find it packed with pioneer and Native American history, working cattle ranches, music festivals and Kansas City-style barbecue.

Home prices across Kansas are continuing to rise, but the increase has been slight lately, according to the Kansas Association of Realtors. In March, the average sale price was $199,899, representing a 1% increase over last year. That is good news for buyers; according to the association, prices over the same time rose 4.6% in the Midwest and 3.8% across the U.S.

Still, the number of sales in Kansas has declined lately. For examples, sales were down almost 5% during the first quarter of this year compared to the same time last year.

Buyers in Kansas should be prepared to move quickly in the current housing market. Recent reports show homes stay on the market for just 66 days. This fast pace can be attributed to low inventory; during the first quarter of 2019, new listings were down 7.6%.

The rules and costs of buying a home in Kansas

Like all states, Kansas has certain regulations and taxes that buyers need to consider when shopping for a home. Here is what you should know:

Home seller and buyer laws

Kansas law requires both sellers and their real estate agents to disclose any known conditions or defects that might affect the value or functionality of a home. This information needs to be provided in both the written sales contract and any related addenda. Sellers must also disclose information on radon, environmental pollutants and lead-based paint.

Kansas is a judicial foreclosure state, which means lenders must go through a court to foreclose on homeowners who can’t pay their mortgage rather than trying to work with them outside of a courtroom.

Homeowners going through a divorce should know that Kansas is an equitable distribution state. This means courts allocate all assets, including property, and all debts to each spouse based on multiple factors, including, but not limited to, age, duration of the marriage and each spouse’s current and future earnings. By contrast, some states are community property states, which means assets and debts are split 50/50.

In Kansas, buyers do not need to be represented by a lawyer at closing, as is the case in some states. Instead, they can turn to a closing agent, such as a representative of a title company.

Taxes

Kansas homebuyers do not pay real estate transfer taxes. The state repealed its real estate transfer tax mandate in 2014, making it the first state in the country to do so. The repeal took full effect in January, 2019.

Buyers do pay a document recording fee to their county’s register of deeds before the mortgage is filed. The loan amount determines the amount of the fee, which the state caps at $125 for properties valued under $75,000. As you near your closing date, your lender will let you know the exact amount you will need to pay.

According to Tax-Rates.org, Kansas ranks 26th in terms of the average amount of property taxes homeowners pay, with a median tax rate of 1.29%. This works out to an annual tax payment of $1,625, based on a $125,500 home. As with most states, individual counties often establish their own rates, so some counties in Kansas may have higher or lower rates.

In Kansas, homeowners can reduce their annual property taxes by taking advantage of the state’s Homestead Refund, a rebate program that refunds eligible homeowners up to $700 per year. Alternatively, low-income homeowners age 65 and older can claim the state’s Safe Senior Property Tax Refund, which returns 75% of any property taxes paid.

Conforming loan limits

The conforming loan limit for a single-family home in Kansas is $484,350, which is the limit in place for most of the U.S.

Conforming loan limits represent the maximum amounts two government-sponsored enterprises, Fannie Mae and Freddie Mac, are willing to guarantee on conforming loans, which usually provide the best interest rates to buyers who have good credit. Loans above conforming loan limits are considered to be jumbo loans, which often come with higher interest rates and require higher credit scores.

Programs for homebuyers in Kansas

In Kansas, several city- and statewide programs are available to make homeownership more affordable. In addition to the options highlighted here, homebuyers can learn more about Kansas homebuyer programs at this website from the U.S. Department of Housing and Urban Development (HUD).

First-Time Homebuyer Program

The Kansas Housing Resources Corporation offers a forgivable loan for 15% to 20% of a home’s purchase price, which can be used to pay down payment and closing costs.

Buyers who qualify:

  • Must be first-time buyers or have not owned a home in the past three years
  • Must meet certain income limits, which range between $12,850 and $76,250, depending on family size and county
  • Must put down at least 2% of the purchase price
  • Must purchase a property that is not located within the city limits of Topeka, Wichita, Lawrence, Kansas City or anywhere in Johnson County

Learn more

Home Ownership Assistance Program — City of Leavenworth

Leavenworth, a city in eastern Kansas, provides up to $8,000 in grant funds that can help low-income buyers reduce their mortgage principal and pay for down payment and closing costs. Homeowners who have moderate incomes can receive up to $5,000.

Buyers who qualify:

  • Must not have owned a home in the past five years
  • Must meet income and credit guidelines
  • Must purchase a home in Leavenworth valued at $150,000 or less
  • Must remain in the home five years; homeowners who sell, move or refinance within five years will need to repay the grant

Learn more

Topeka Opportunity to Own (TOTO)

The City of Topeka can help a first-time buyer obtain financing and provide assistance with closing costs and up to $30,000 for repairs or purchase costs.

Buyers who qualify:

  • Must purchase in Topeka or in one of four opportunity areas
  • Must meet income and credit guidelines
  • Must put down at least $500
  • Must purchase a property for $75,000 or less
  • Must attend a homeowner education course

Learn more

Rate shopping tips

As you navigate the process of buying a home and finding the best interest rate, help make your mortgage as affordable as possible by keeping these tips in mind:

Contact at least three lenders on the same day.

Mortgage rates change daily, so comparing rates among multiple lenders on the same day will help ensure you are getting the most accurate comparison. Consider getting quotes from smaller local banks or credit unions and online lenders, as well as large national banks.

Give each lender the same information.

To ensure you can make an apples-to-apples comparison on your loan options, be sure to provide all lenders the same details about your financial situation. Lenders typically put together loan terms that are specific for each customer and are based on factors such as proof of income, employment situation, credit score, total amount of assets and debt and size of the down payment. Make sure you are upfront about any information that may affect your rate to avoid a situation in which a lender quotes you a low rate but later increases it.

Add up all the lender fees for a total loan cost.

When shopping for rates, remember the interest rate is just one aspect of the loan. Use the annual percentage rate (APR) each lender provides you in a loan estimate to compare the total cost of financing. But be sure to consider (and compare) any fees not reflected in the APR, such as application, credit report and property appraisal fees.

Know when to lock in the rate.

Ask your lender about the process for locking in a desirable interest rate while your loan is still being processed. Lenders may also be willing to offer you a “float down” option in case interest rates drop, rather than increase. Your loan officer will be able to tell you more about the current mortgage market and where interest rates may be headed.

The information in this article is accurate as of the date of publishing.