2022 Kentucky mortgage limits by county
- You can borrow up to $647,200 with a Kentucky Conforming Mortgage or $420,680 with an FHA Mortgage.
- To take out more than $647,200, you will need to apply for a jumbo mortgage.
- The best type of mortgage for you could also depend on insurance costs or your credit score.
- Check out today’s mortgage and refinance rates in Kentucky on Insider.
If you buy a house in Kentucky in 2022, your mortgage limits will be the same in all counties.
For a conforming mortgage — what you might consider a “regular mortgage” — you can borrow up to $647,200. This is the limit set by the Federal Housing Finance Agency.
The limit is lower for FHA mortgages, which are backed by the Federal Housing Administration. You can borrow up to $420,680 for a single-family unit or more for a multi-family home.
How to determine the type of mortgage that is best for you
Your choice between a conforming, jumbo, or FHA mortgage may depend on how much you want to borrow. You can borrow more with a conforming mortgage than with an FHA loan, and you could get even more with a jumbo mortgage.
Otherwise, it may depend on whether or not you meet the qualifications. A conforming mortgage generally requires a minimum credit score of 620, and you’ll need a higher one for a jumbo mortgage. You qualify for an FHA mortgage with at least a 580 credit score and a 3.5% down payment. You can even get an FHA mortgage with a credit score as low as 500, but you’ll have to put down 10% with a lower score.
If you qualify for all of these types of mortgages, you might base your decision on insurance costs.
“The FHA has something called Initial MIP, or Initial Mortgage Insurance Premium,” says Darrin Q. English, senior community development lending manager at Quontic Bank. “You are not actually paying out of pocket for this MIP funding, but it is added to the loan amount. When you receive a closing disclosure or loan estimate, you will see that there will be a measurement of the amount of your loan, then there will be an adjusted loan amount added to this initial MIP.”
Compliant and jumbo mortgages charge something called private mortgage insurance (PMI) if you place less than 20% down. But the lender cancels the PMI once you earn 22% equity in your home, and you can even request to cancel it sooner when you reach 20% equity. With an FHA mortgage, you must pay the MIP for the entire term of your loan.
There is one major exception to this rule, explains English. If you make a 10% down payment on an FHA mortgage, your MPI will be canceled in the 11th year of your loan.
If you’re unsure which mortgage is right for you, contact a mortgage lender to speak with a loan officer. You can even prequalify with a lender to see what you qualify to borrow, and it won’t hurt your credit score.