Best Mortgage Lenders for First Time Home Buyers in Connecticut (CT)

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Contributor, Benzinga
December 21, 2023

Purchasing your first home can be a daunting prospect. Fortunately, there are plenty of resources and programs out there that make the process easier. One of the biggest decisions you can make is choosing your mortgage lender and mortgage type. Here are some of the best mortgage lenders for first-time home buyers in CT. 

Quick Look: Best CT Mortgage Lenders for First-Time Home Buyers

Best Mortgage Lenders in CT for First Time Home Buyers

You have many mortgage lenders to choose from, and each comes with its unique benefits. Here are some of Benzinga’s favorite lenders for first-time buyers in Connecticut:

1. Best for Bank Statement Home Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional loans for first-time buyers. Among its many customized loan solutions is its bank statement product for first-time, self-employed borrowers. This loan does not require tax returns and includes a 1099 income option for 1099 earners. 

  • Loan amounts up to $3 million
  • 12 or 24 months of personal or business bank statements
  • Two years out of bankruptcy, short sale, foreclosure or deed-in-lieu
  • Owner-occupied, nonowner occupied, second homes
  • 1099 option available
  • 40-year fixed interest only
  • Delayed financing available
  • Non-warrantable condos allowed

Atlanta-based Angel Oak Mortgage Solutions offers a wide range of loan options allowing you to obtain any mortgage as long as qualification requirements are met. You can also refinance into any of these loans after you get into the home and feel you can benefit from obtaining a lower interest rate. The customer service team is easy to reach via email, phone or the online contact form, and you can begin your journey by searching for a local adviser on the company’s website.

Pros

  • Offers accessible mortgages for self-employed and 1099 employees
  • Offers alternative options for those who don’t qualify for traditional Jumbo mortgages
  • Offers mortgages for owner- and nonowner-occupied buyers

Cons

  • High minimum credit score requirements
  • Requires working with a mortgage broker
  • Its nontraditional mortgage options can be more expensive than other mortgages

2. Best for Online Loans: Rocket Mortgage®

Rocket Mortgage® is one of the most popular online mortgage lenders available. It offers a simple and intuitive loan application process that you can complete online.

Rocket Mortgage® also provides customized mortgage solutions based on your mortgage rate and preferred term. This lender prioritizes efficiency and customer service, providing a mobile app to make the application process even more accessible.

Pros

  • Offers an easy online mortgage application
  • Closing process takes about 26 days on average
  • Online educational tools for prospective homebuyers to use

Cons

  • Does not offer U.S. Department of Agriculture (USDA) loans
  • Does not offer home equity line of credit (HELOC) loans
  • No in-person services, which could be a drawback for some people

3. Best for Self-Employed: CrossCountry Mortgage

  • securely through CrossCountry Mortgage's website
    securely through CrossCountry Mortgage's website
    Best For:
    Self-employed Borrowers
    Rating:
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    Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA 

CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.

It's also easier to get approved if you're self-employed. Tax returns are not required and you'll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.

Pros

  • Offers down payment assistance programs
  • Has a dedicated team to work with self-employed homebuyers
  • Physical branches in most states

Cons

  • No online pre-approval option
  • Current rates not available online
  • Customer support not easily accessible compared to other lenders

4. Best for First Time Home Buyer Programs: Wells Fargo

Wells Fargo is a great option if you’re looking for a lender that can offer you personalized assistance as well as unique programs. With several branch locations in Connecticut, it offers the convenience of online lending as well as the benefits of being able to speak to someone in-person.

Wells Fargo can help walk you through your available options, including its First Mortgage loan program. This program is for low-to-moderate-income, first time buyers who want an opportunity to make homeownership more attainable. With this program, you can put as little as 3% on a down payment.

You may also be eligible for a $750 credit for your closing costs if you complete a homebuyer education course.

Pros

  • Publishes current mortgage rates on its website
  • Offers a mortgage plan with a low down payment
  • Provides a variety of rate-lock options

Cons

  • Does not offer HELOCs
  • Does not offer USDA loans
  • According to the Better Business Bureau (BBB), Wells Fargo has a poor response to customer complaints

5. Best for FHA Loans: guaranteed Rate

guaranteed Rate offers a robust system of intuitive online tools to guide you through the mortgage process. If you are eligible for an FHA loan and looking to save on your down payment, this is a great lender to look into.

It offers low rates and minimum down payments of 3.5% on FHA loans. guaranteed Rate also has several office locations throughout Connecticut. If you’re looking for the benefit of an online lender but feel more comfortable talking to someone in-person, guaranteed Rate may be the right lender for you.

Pros

  • Physical branches in Connecticut
  • Accepts nontraditional financial history
  • Offers easily accessible rates online

Cons

  • Charges a $150 application fee
  • Does not offer USDA loans
  • Does not offer home equity loans

6. Best for VA Loans: Veterans United

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

Pros

  • Offers a free credit counseling service
  • Wide variety of VA purchase and refinance loan options
  • Customer support available 24/7

Cons

  • Does not offer home equity loans or HELOCs
  • Current mortgage rates not published on its website
  • No branch locations in Connecticut

The Housing Market in Connecticut: An Overview

Home values in Connecticut have been rising in recent years. Take a look at recent stats.

Total households: 1,409,807

Median list price: $403,300

Three most expensive cities in Connecticut to buy a house:

  • Greenwich
  • Westport
  • Darien

Three most affordable cities in Connecticut to buy a house:

  • Torrington
  • Naugatuck
  • Bristol

Preparing for a Mortgage

The mortgage process can seem intimidating, especially to first-time buyers. But it doesn’t have to be that way. You have so many things to consider from your monthly mortgage payments to which financial institution you wish to use. Remember, your mortgage broker can help by using a mortgage calculator to gauge the affordability of the homes you are looking at. You need to be ready for the homebuying process instead of going into it with too many questions.

The first thing you’ll want to do is take a look at your finances and list what you need in your new home. Estimate how much you can use for a down payment and what a reasonable list price would be for the home you’re looking for. Mortgage preapproval is just one step in the process.

Familiarize yourself with your credit report. A lender will want to see on-time payments and a robust financial history. This will show your lender that you will be reliable with mortgage payments. Lenders have minimum credit score requirements to approve you for a mortgage. If you have a higher credit score, lenders may offer you a lower mortgage rate.

You can use this information to get a purchase quote from lenders. Then, you’re ready to move on to the preapproval process. Have these documents ready before you fill out your application:

Proof of Income

Gather wage and tax W-2 forms, tax returns and pay stubs from the past two years. These documents prove to lenders that you have a reliable income and steady employment history.

Information About Assets

Submit statements from checking, savings, retirement and investment accounts. You may also submit information about any other assets you own, such as stocks or expensive items such as vehicles. 

Other Relevant Information

Present any other debts you are paying off because lenders need to be aware of that. Lenders also want to know whether you are paying or receiving alimony or child support. If you are, you will need to provide the court order for these payments.

Most lenders offer quick online preapprovals. Once you receive your preapproval, you’ll be ready to make an offer as soon as you find the right home for you.

LenderMinimum Credit Score Required
Rocket Mortgage®620
Keller Mortgage600
New American Funding620
Wells Fargo620
guaranteed Rate620

Mortgage Options

The mortgage type you select can affect many factors of your mortgage, including your down payment requirements and mortgage rate. Below are some of the most important types to familiarize yourself with.

Conventional

The mortgage type you will likely come across most often is the conventional mortgage. These mortgages are offered directly from lenders and usually have fewer eligibility requirements. 

The terms of conventional mortgages can vary between fixed and adjustable interest rates. Conventional loans also offer the benefit of flexible repayment terms, with the most common being 15 and 30 years. 

At the same time, loan estimates and loan approval may be a little more difficult to come by. Application fees may apply, and an online application is generally available. Loan limits here might be higher than normal, and while they tend to come to the consumer as fixed-rate mortgages, adjustable-rate mortgages might also be available.

FHA

The Federal Housing Administration offers a mortgage insurance program commonly referred to as FHA mortgages. This mortgage type is an attractive option for many first-time buyers because it typically requires smaller down payments than the standard 20%, making the homebuying process more affordable. These loans are often recommended to make closing cheaper, ensuring that origination fees and associated costs are lower.

USDA

USDA mortgages are offered by the U.S. Department of Agriculture. If you’re looking to buy in a rural area, it may be an option for you. Note the eligibility requirements including an adjusted household income that is no more than 115% of the area’s median income. The home you purchase needs to be your primary residence, and it must be in a qualified rural area. Real estate agents might recommend these loans to you, or you can check online to see whether a property you like qualifies for a USDA loan.

VA

If you’re a military member, VA loans are a great option to look into. These mortgages are offered by the U.S. Department of Veterans Affairs to qualified military members and their families. The benefit of this mortgage type is the ability to finance 100% of your home purchase, but loan limits may vary. It could be difficult to get a loan estimate, and you may need to be patient as you hope to achieve the dream of homeownership because the VA, like many government institutions, might move slowly when coordinating with your lender.

Jumbo

Jumbo loans are offered by select lenders to buyers who need to finance a more expensive home. Each year, the Federal Finance Housing Agency sets maximum financing limits, and if your home’s price exceeds this limit you will need to take out a jumbo mortgage. Most lenders of jumbo loans require their borrowers to have higher credit scores and incomes than they would for other mortgage types.

First-Time Homebuyer Programs in Connecticut 

First-time homebuyers in Connecticut may be eligible for programs designed to ease the financial burden of buying their first home. The programs include:

Down Payment Assistance Program Loans

If you’re having trouble saving for the down payment on your home, this program might be a good option for you. Requirements for this program include using any household savings above $10,000 toward your down payment unless you qualify for a waiver. You often qualify based on your monthly income. You must also prove your ability to repay both your mortgage and the loan.

HFA Advantage and HFA Preferred Loans

As with most programs, this one requires that the home you’re buying is your primary residence. You also must meet certain qualifying income limits and your home must be within the Connecticut Housing and Finance Authority (CHFA) sales price limits.

The benefits of this program include zero upfront mortgage insurance costs with lower monthly mortgage insurance costs. Under this program, your mortgage insurance premiums will end as soon as you reach 20% equity in your home.

Homebuyer Mortgage Program

Also offered by CHFA, this program is designed for low- and moderate-income families to help them achieve homeownership. Eligibility requirements for this program include income and sales price limits. You will also be required to take a homebuyer education course before closing on your home. The benefits of this program include below-market, competitive mortgage rates and down payment assistance.

Current Mortgage Rates in Connecticut

Mortgage rates are the interest rate set by your lender when you finalize your mortgage. You can choose between fixed and adjustable interest rates. Fixed interest rates stay the same throughout your entire loan repayment, where adjustable rates fluctuate. 

Mortgage rates fluctuate depending on the housing market and economy. If the economy is doing well and there is more competition for mortgages, you can expect mortgage rates to increase. If the housing market is slower, you may find that mortgage rates are lower. Benzinga monitors and updates this chart to reflect the most recent data.

Loan TypeRateAPR
30-year fixed 6.624% 6.706%
15-year fixed 6.06% 6.203%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) 7.081% 7.868%
Rates based on an average home price of $255,555 and a down payment of 20%.
See more mortgage rates on Zillow

Closing a Mortgage

When your offer is accepted and your financing is secured, you will move into the negotiation stage. Now is the time to arrange a home inspection and appraisal of your new home. You will want to thoroughly go through the house to identify anything that you want to be addressed before the home becomes yours.

During negotiations with the seller, you’ll decide who will cover the costs for any work that needs to be done on the home. Once you close on the home, you will be responsible for anything in the home that was not discussed and completed during this stage.

LenderAverage Days to Close Loan
Rocket Mortgage®30
New American Funding30
Wells Fargo90
guaranteed Rate30

Your Next Step Toward Home Ownership

First-time home buyers in Connecticut have several great mortgage lenders to choose from. It’s a good idea to compare the fees and assistance programs that each lender offers before you apply for mortgage preapproval. You should also consider your situation and determine whether you qualify for any government-backed mortgage loans.

Frequently Asked Questions

Q

How do I get pre-approved?

A

To get preapproved for a mortgage, you first need to choose a mortgage lender. Then you need to submit your financial documentation and agree to allow the lender to do a hard credit check. Once you’ve submitted your information, the lender will get back to you. If you’re preapproved, you’ll receive a letter telling you the loan amount and rates you’re preapproved for.

Q

How much interest will I pay?

A

The interest that you’ll pay on a mortgage will depend on a few factors. Your credit score is a major factor in the interest rate that you will qualify for. Other factors include your loan amount and the current Federal Reserve interest rates.

Q

How much should I save for a down payment?

A

The short answer is that you should save as much as you can for a down payment — the higher your down payment is, the lower your mortgage loan amount will be. The general recommendation is to have 20% of the home’s purchase price saved for a down payment. However, there are several programs out there that don’t require a 20% down payment. These programs can come with other fees such as private mortgage interest (PMI,) but can be worth considering. 

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.