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Conventional Loan in Kansas City

Conventional loan in Kansas City (aka Conforming loans) are not insured by any government program. They are the most common type of mortgages and follow the guidelines set forth by Fannie Mae and Freddie Mac (aka FNMA and FHLMC). Learn about the minimum down payment, qualification, and competitive rates, which are at historic lows! Please find the Metropolitan Mortgage program highlights below.

What are the Benefits of Conventional?

Compared to government-backed mortgage products, they are more flexible in their respective home loan terms. They have fewer underwriting restrictions. Borrowers with stable employment, income, and credit are typically better candidates for a Kansas City mortgage loan. Speak with Kansas City Mortgage Lenders that you can trust!

  • Down payment as low as 3%
  • Fixed and Adjustable rates available
  • Lower mortgage rates for borrowers with Better credit
  • Terms from 10 to 30 years
  • Financing for Owner Occupied (primary residence), second home (10% down payment), and Investment property (20% down).
  • Both home purchase or mortgage refinancing transactions
  • No PMI with a 20% down payment. A Conventional loan with PMI can be canceled once sufficient equity is obtained

Which Conventional Home Loan is Right For you?

How do I apply for a Conventional Loan?

You can apply online for a Conventional home loan and receive your mortgage pre-approval within one business day. Get started on your Metropolitan Mortgage application today:

Apply Now >

Mortgage Rates for Conventional Loans

  • Fixed Rates – With a fixed-rate mortgage, the rate will never change for the life of your Conventional loan mortgage. Thus protecting you from rising rates. Conventional lending typically offers lower rates and APR’s than other types of financing.Conventional mortgage loan terms are 10, 15-Year Fixed-Rate Home Loan, 20, 25, and 30 year fixed rate. Shorter terms for conventional loans have higher monthly mortgage payments but offer lower home loan interest rates. Therefore, you will build up home equity in your Kansas City home faster and pay less interest. You can use this acquired equity as a down payment when you buy a home.
  • Adjustable-Rate Mortgage (ARM) – An ARM has initial introductory rates for the first 5 or 7-years. Following the initial period, the rate can adjust annually for the remaining term. There are subsequent annual and lifetime interest rates caps that limit the amount the rates can change. Adjustable rates are best for shorter terms of homeownership.

Conventional mortgage rates

Conventional Home Loan Requirements:

Conventional Loan in Kansas City

What is the Minimum Down Payment for a Conventional Loan?

Conventional home loans require a minimum down payment of 3-percent (3%) of the homes purchase price. If you are a first-time home buyer and meet the income limitations, you can enjoy discounted mortgage insurance. The mortgage insurance can be cancelled once there is sufficient equity (unlike FHA). First-time home buyers are defined as not having any real estate ownership in the last three years.

Conventional vs FHA Loans

Eligible sources for the down payment

In summary, the down payment for closing can come from any asset to purchase real estate. However, loans and unverifiable cash are not allowable. Please feel free to contact a Kansas City Loan Officer to learn more information about the underwriting process.

2022 Maximum Conventional Loan Amount

The maximum loan limit for Kansas City (Kansas and Missouri) purchase and refinance loans for 2022 is:

  • $625,000 for a one-family property
  • $800,250 for a two-family property
  • $967,250 for a three-family property
  • $1,202,000 for a four-family property

Home loans are available above these loan limitations, see Jumbo Loans.

Minimum Credit Scores

Conventional mortgage loans are a good choice for borrowers with a credit score of 620 or higher. However, there is “risked based” based pricing (See LLPA below). In other words, the interest rate is based on the middle FICO score and the amount of your down payment. FHA may be a better option if you have troubled credit. Contact a Kansas City  Loan Officer to find out which home loans are best for you.

Mortgage Refinance

A mortgage refinance can help you pay off your home sooner, lower your monthly payments and even put your home equity to good use. There are a several options to consider when refinancing:

  • A “rate and term” refinance which is to refinance and improve the terms of the loan and/or reduce the loan term to pay-off the loan faster.
  • A “cash-out refinance” to obtain money for large purchases such as home improvements, cars or to reduce credit card debt. The way they do this is by refinancing to take equity out of your home.

Learn more about a mortgage refinance

Private Mortgage Insurance (PMI)

When putting less than 20% down payment requires PMI. The risked-based insurance protects the mortgage lender from losing money in case of default. Borrowers with good credit and a larger amount down (i.e. 10% or 15% down) can enjoy cheaper monthly insurance payments than with an FHA loan.

There are other loans that do not have PMI included in your monthly payments. Such as Lender-paid PMI, a combination of first and second loans, and single payment PMI. A Loan Officer can help to determine which loan option is the cheapest for your personal situation.

How to Cancel PMI

Debt-to-Income Ratios

Qualification for conventional home loans is determined by the debt-to-income ratio (DTI). This is the total monthly housing expense plus debt obligations divided by the total gross monthly income. This Debt-to-income ratio is one-way lenders measure your ability to manage the payments. Generally, the maximum DTI is 45% and up to 50% with compensating factors.

Strong compensating factors are; great credit score, job stability, and cash reserves. The best way to verify the maximum amount you can borrow based on your income level is to start pre-approval.

The Guide on Qualifying for Conventional Home Loans

Eligible Properties

Many types of properties are eligible, for Example:

  • Single-family homes (Detached homes)
  • Planned Unit Developments (PUD’s) which typically consist of detached homes within a homeowner’s association.
  • 2, 3, and 4-unit properties
  • Condominiums
  • Some co-op properties
  • Manufactured homes (loan limitations apply)

Other Popular Loan Options

Explore all the Loan Options that are available

Have Questions? Speak with a Loan Officer to learn more about a conventional loan in Kansas City. Call our Kansas City or Overland Park location today at 913.642.8300.

Find us locally

Find us Overland Park

7381 W 133rd St #200,
Overland Park, KS 66213

Monday Friday
8:30am – 5:30pm

Find us in Kansas city

7280 NW 87th Terrace Suite 200
Kansas City, MO 64153

Monday Friday
9:00am – 5:00pm

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