When you purchase a home, you will have a number of fees to pay. One of those could be something called private mortgage insurance. Private mortgage insurance (PMI) is insurance to protect your lender in the case that you default on the loan. Here is what you need to know about private mortgage insurance:
Local Home Loan Programs in Kansas City
When looking for home loans in KC, you have a variety of local loan programs to choose. If you are just starting to review your options, here are a few of the basic KC programs to be aware of:
- First time homebuyer programs
- USDA home loans
- VA home loans
- FHA Loans
First Time Homebuyer Programs
If a lack of funds for a down payment and closing costs have kept you from purchasing a home, first time homebuyer programs may be able to help. Many of these programs offer forgivable loans to eligible borrowers that can greatly reduce the out-of pocket costs associated with buying a home. Some cities such as Blue Springs and Lee’s Summit have their own first-time home buying programs. Each features a different grant amount. They also have their own qualification guidelines and most are based on income limits as well as the location of the property.
One of the most popular first time homebuyer programs for home loans in KC is MHDC’s First Place Cash Assistance Program. This program matches 3% of the KC home loan to cover down payment or closing costs. In addition, MHDC sets the interest rate for the mortgage loan. However, this program applies only to homes in the state of Missouri.
USDA Home Loans
If the home you are planning on purchasing is in a designated rural area, you may eligible for USDA home loans in KC. A USDA loan is a home mortgage that provides 100% financing to eligible borrowers. USDA loans help low-income individuals and families purchase homes in rural areas.
VA Home Loans
VA home loans in KC are available to veterans, reservists, active duty personnel, and surviving spouses of veterans based on military entitlement. This type of financing allows these individuals to benefit from 100% financing of their home and no required down payment.
FHA home loans in KC allow borrowers to purchase a home with as little as 3.5% down. This is a popular option with those who do not have enough money for a large down payment and also people with poor credit histories. Historically, FHA loans have been easier to obtain when compared to conventional loans. The qualifying guidelines are generally more flexible.