With an affordable housing market, central location, and rising opportunities for employment,
Kansas is an attractive real estate destination for families and young professionals alike.
Whether it's your first time buying a home or you’re a newcomer to the Sunflower State, navigating the real estate market can be overwhelming.
Luckily, broker expert
Jerry is here to set the wheels in motion for your home buying journey. Follow this step-by-step guide and find everything a Kansas homeowner needs to know.
Figure out your finances
While you may be jumping with excitement to view potential properties, there are several hoops to jump through before you can start your search. The first and most significant step in buying a new home is to evaluate your finances.
To determine your price range, you need to understand such financial factors as your credit score and debt-to-income ratio.
Check your credit score
Get started by first checking your credit score, a number calculated based on your financial history. Your credit score is a significant determinant of your likelihood of receiving a loan to purchase property.
Keep in mind that lenders will often require a score of at least 620.
While there are low-credit loan options, you may want to consider waiting to buy a home until you have improved your credit score and can qualify for a better mortgage.
Calculate your debt-to-income (DTI) ratio
As the phrase sounds, your debt-to-income (DTI) ratio is the total of your monthly payments divided by your pre-tax gross monthly income. Lenders evaluate your DTI to determine what you will be able to afford after taking on a mortgage.
Monthly payments to factor into your DTI include:
Minimum credit card payments
Estimated mortgage payment
To understand the DTI percentage more clearly, let’s take a look at an example:
Kansas average monthly payments = $2063
Kansas median monthly income = $4852
The lower your DTI, the more likely you will be approved for a mortgage. Most mortgage lenders will require an after-mortgage DTI of 36%. However, some lenders may approve a DTI of up to 43% if you have a high credit score.
While your DTI does not include other such non-debt monthly payments as groceries, utilities, or retirement savings, it is important to factor in those payments when evaluating what type of mortgage you’re able to afford with your monthly income.
Key takeaway Most Kansas mortgage lenders will approve a conventional loan if you have a DTI of 43% or lower.
Determine your down payment
A down payment is an up-front portion of the total purchase price of your home. Mortgage lenders use down payments to secure your investment in the home and offset the risk that you will fail to make a mortgage payment.
For a conventional loan in Kansas, you will need a down payment of 20%. Buyers will typically take out a loan to finance the remainder of the payment.
For example, to purchase a home in Kansas at the median cost of $167,248, your 20% down payment would amount to $33,450.
Not every prospective home buyer has enough for a down payment sitting in the bank. Luckily, there are other options available that use different means to offset lender risk, including Veterans Administration (VA) loans and Federal Housing Administration (FHA) loans.
VA loans allow veterans to qualify for a loan with no down payment with the one-time payment of a VA funding fee. Similarly, FHA loans allow for down payments as low as 3.5% with the condition that the borrower pays for private mortgage insurance throughout the term of the loan.
Key takeaway A down payment in Kansas is 20% of the property’s purchase price. If you’re unable to make the payment, there are other options for loans.
Prepare for closing costs and other fees
Closing costs are additional payments that are paid by the home-buyer and include such services as appraisal fees, home inspection and loan application fees, property taxes, and homeowners insurance.
Closing costs typically amount to 2-5% of the home’s price. In Kansas, closing costs sit at $2,042 for homes priced at the average of $213,023, amounting to 0.96% of the home’s total price.
Keep in mind that closing costs are typically paid out-of-pocket, so you should have enough savings to be able to cover them.
Key Takeaway Don’t forget about the additional closing fees you will need to pay when purchasing a property.
Look for homeowners insurance
Homeowners insurance is an ongoing expense that you will need to factor into your monthly or yearly payments.
On average, the cost of
homeowners insurance in the United States is $1,387 per year or $115 per month. Homeowners insurance in Kansas is more expensive than the national average, ranging from $2,500 to $3,500 per year.
The cost of insurance accounts for risks unique to Kansas, including tornados and hail storms.
While homeowner’s insurance in Kansas is not required by law, your mortgage lender may require it for you to secure a loan.
Homeowner’s insurance can protect your property from the hazards of wind, hail, and water damage. The best way to start your search for coverage is to compare rates from different insurance companies.
Luckily, insurance broker super app
Jerry can make the comparison process easy: just enter your information, sit back, and let Jerry find you quotes from the nation’s top companies!
Key takeaway Kansas homeowner’s insurance is not required by law but may be a condition of your mortgage loan.
Get pre-approved for a mortgage
The next step in the home buying process is to prequalify for a mortgage. Having a mortgage pre-approval letter confirms to lenders that you are financially capable of buying a home and gives sellers confidence that you will be able to get financing and close the sale.
Pre-approval involves an extensive investigation into your finances by your lender and will require you to fill out an application. You will need to produce such documentation as proof of income, tax returns, and pay stubs, along with a list of all debts you are currently paying.
The investigation process may take as long as 7-10 days. Once the lender has assessed all of your documentation, the loan amount that you qualify for will be determined and a pre-approval letter will be issued.
Key takeaway Pre-qualifying for a mortgage demonstrates to sellers that you are financially qualified to close a sale.
How to pick the right mortgage in Kansas
The two main factors to consider when picking a mortgage in Kansas are the mortgage term and interest rate.
Having a lower interest rate can save you thousands of dollars throughout the term of your mortgage, which may range from 15 to 30 years. However, if you have a shorter-term mortgage, you will have a higher monthly payment.
Consider the different interest rates and monthly payments of each term with the median loan amount for a Kansas home: $133,798.
With a 15-year mortgage term, your interest rate would amount to 2.39% with a monthly payment of $885. On the other hand, a 30-year mortgage term would have a 2.97% interest rate and monthly payment of $562.
In addition to finding the right mortgage term and interest rates, it's important to find a lender who will ensure your mortgage transaction progresses smoothly.
Shop around with various lenders and find one who will provide you with a mortgage that is best suited to your needs.
Look for a house
It’s finally that time. Your finances are in shape and you’ve been pre-approved for a mortgage. Now comes the fun part—house hunting!
To find the house that fits your needs, you should have a strong sense of what those needs are. Consider the following factors to determine what you prioritize in your new home:
Proximity to schools, parks, grocery stores, shopping malls, downtown areas, or walking paths
Number of bedrooms and bathrooms
Dog or child-friendly property
Knowing what you prioritize in a home will allow you to narrow your search and save time viewing properties.
Pick your city or neighborhood
Choosing your desired city can be influenced by such factors as the location’s climate, crime rate, affordability, and cultural attractions.
According to the most recent census data, the most affordable cities in Kansas include Pratt, Mulvane, and Concordia whereas
Lawrence rank as the most expensive.
Buyer’s market vs. seller’s market
Having an understanding of the current housing market in your desired location will allow you to set reasonable expectations of pricing and availability. Additionally, you will be able to make an informed decision when putting an offer on a property.
Known as a seller’s market, the housing market in Kansas currently favors sellers. In this type of market, fewer homes are listed for sale, resulting in increased buyer demand and higher asking prices.
However, prospective buyers need not fret. The cost of housing in Kansas is still lower than the national average, with homes currently listed at an average price of $182,000 or $117 per square foot.
Keep in mind that the real estate market in your desired location may ebb and flow in accordance with the seasons. For example, data from previous years revealed that in Kansas, January had the most number of homes on the market, while November saw the lowest housing inventory.
Key takeaway Do your research to determine what the current housing market looks like.
Find a real estate agent
Your real estate agent will be your main ally throughout your home buying journey. They will provide professional expertise in prioritizing your needs, finding your dream home, and making an offer. Agents can also connect you with lawyers and lenders, should you need such services.
When choosing a real estate agent, pay attention to their qualifications, reviews, years of experience, and transactions in the last year.
Red flags to watch out for in real estate agents include:
They can’t accurately summarise your needs and priorities
They fail to answer your questions
They have poor communication skills
They have only handled a few transactions in the past year
Make an offer
You’ve found your dream home! Now it’s time to make an offer. How fast you need to move will depend on the current housing market.
In Kansas, homes typically stay on the market for 54 days before receiving an offer. Keep in mind that the market fluctuates with the seasons. In February, for example, homes tend to stay on the market for 37 days longer than average.
When in doubt, ask your real estate agent what the current time frame is for making an offer.
If your offer is accepted, and all inspections and appraisals of the home have been completed, you can say hello to your new life as a homeowner!
How to save on homeowners insurance
With all of the other paperwork that goes into buying a house, insurance may not be the first thing on your mind. However, homeowners insurance in Kansas can protect your property from hazardous tornadoes, hail storms, and other damages.
Luckily, the insurance shopping process is quick and easy when you’ve got
Jerry on your side. Jerry can compare rates in as little as 45 seconds and help you
bundle your home and auto policies for savings on both.
Jerry was wonderful! I used it for my auto and renters policies. I trusted it so much that I signed up my homeowners insurance under Jerry as well. All of the agents are amazingly nice and knowledgeable.” —Mary Y.
This app is great, but the customer service is even better! Not to mention convenient! My husband and I got the lowest rate (much lower than the rates I was finding online through my own searches), quickly, and pretty much all through text message! Thank you so much for a hassle free experience👍