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Conventional Loans Kansas City

Conventional loans in Kansas City (aka Conforming loans) are not insured by any government program. They are the most common type of mortgage 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 a Conventional Loan?

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 rate or Adjustable rate loan
  • Low rates for borrowers with good credit
  • Flexible terms from 10 to 30 years
  • Financing for Owner Occupied (primary residence), second home (10% down payment), and Investment property (20% down).
  • Both new home purchase or mortgage refinancing transactions
  • No PMI with a 20% down payment and 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 >

Conventional Mortgage Rates

  • Fixed Rate – A fixed rate will never change for the life of your mortgage. Thus protecting you from rising rates. Conventional lending typically offers flexible loan terms, lower rates, and APR’s versus other types of financing. Conventional mortgage loan terms are 10, 15-Year Fixed-Rate Home Loan, 20, 25, and 30 year fixed rate. Shorter-term loans have a higher monthly mortgage payment 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

Requirements for Conventional Home Loans:

Home buyers that finished closing on their new home.

What is the Minimum Down Payment?

Conventional home loans require a minimum down payment of 3-percent (3%) of the home’s purchase price. If you are first time home buyers and meet the income limitations, you can enjoy discounted mortgage insurance.

The mortgage insurance can be canceled 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 on Conventional loans. Please feel free to contact a Kansas City Loan Officer to learn more information about the underwriting process.

2022 Maximum Loan Amount

The maximum loan limit in Kansas and Missouri to purchase and refinance loans for 2022 is:

  • $647,200 for a one-family property
  • $828,700 for a two-family property
  • $1,001,650 for a three-family property
  • $1,244,850 for a four-family property

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

Minimum Credit Score

Conventional mortgages 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

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

  • A “rate and term” refinance 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 on conventional mortgages. 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 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 Kansas City 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 financing, 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

* Government backed loans

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

Find us locally

Find us in 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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