If you’re a first time home buyer in Connecticut, it’s important to learn about the best mortgage companies available to you. Read on to familiarize yourself with the mortgage process and other helpful tips for first-time buyers.
Get a Mortgage Quote in Connecticut
Tip: comapre 2-3 lenders
The Best Mortgage Lenders in CT for First-Time Homebuyers:
- Best Overall: Rocket Mortgage
- Best for Self-Employed: Luxury Mortgage
- Best for Low Credit Score: Keller Mortgage
- Best for Flexibility: New American Funding
- Best for First-Time Homebuyer Programs: Wells Fargo
- Best for FHA Loans: GuaranteedRate
- The Best Mortgage Lenders in CT for First-Time Homebuyers:
- The Housing Market in Connecticut: An Overview
- Preparing for a Mortgage
- Mortgage Options
- First-Time Home Buyer Programs in Connecticut
- Current Mortgage Rates in CT
- Closing a Mortgage
- 5 Best Mortgage Lenders in CT for First-Time Buyers
- Your Next Step Toward Home Ownership
- Frequently Asked Questions
The Housing Market in Connecticut: An Overview
Home values in Connecticut have been on the rise in recent years. Let’s take a look at other recent stats:
Total households: 1,301,670
Median list price: $270,000
3 most expensive cities in Connecticut to buy a house:
- New Canaan
3 most affordable cities in Connecticut to buy a house:
Preparing for a Mortgage
The mortgage process can seem intimidating, especially to first-time buyers. But it doesn’t have to be that way.
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 on a down payment, and what a reasonable list price would be for the home you’re looking for.
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 onto 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 2 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 if 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.
|Lender||Minimum Credit Score Required|
|New American Funding||620|
The mortgage type you select can affect many factors of your mortgage, including your down payment requirements and mortgage rate. Here 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. They also offer the benefit of flexible repayment terms, with the most common being 15 and 30 years.
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%.
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 also needs to be your primary residence and it must be in a qualified rural area.
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.
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 Home Buyer Programs in Connecticut
First-time homebuyers in Connecticut may be eligible for programs designed to ease the financial burden of buying your 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 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 CHFA (Colorado Housing and Finance Authority) sales price limits.
The benefits of this program include 0 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 prior to closing on your home. The benefits of this program include below-market mortgage rates and down payment assistance.
Current Mortgage Rates in CT
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 current 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 Type||Current Mortgage Rate|
|5/1 ARM (adjustable rate)||3.47%|
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.
|Lender||Average Days to Close Loan|
|New American Funding||30|
5 Best Mortgage Lenders in CT for First-Time Buyers
There are a great number of lenders out there, and each comes with its unique benefits. Here are some of our favorite lenders for first-time buyers in Connecticut:
1. Best Overall: Rocket Mortgage
Rocket Mortgage is one of the most popular online mortgage lenders available today. 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.
2. Luxury Mortgage: Best for Self-Employed
Luxury 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. Luxury 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. Luxury Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.
3. Best for Low Credit Score: Keller Mortgage
Keller Mortgage is a great option if your credit score falls just below the standard requirement of 620. This lender also offers a program for any borrower that works with a Keller Williams agent on their mortgage.
Its ZeroPlus program offers low rates with 0 origination or lender fees. It also provides $1,000 to you at closing to go toward your 3rd-party costs.
4. Best for Flexibility: New American Funding
New American Funding is a great option if you have a non-traditional situation. It offers the opportunity for you to submit a personal story with your loan application.
This allows you to describe your circumstances and appeal to your lender personally. If you have a non-traditional income source or minimal credit history, this offers you the chance to explain your situation and your ability to make on-time mortgage payments.
5. Best for First-Time 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.
6. 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.
Your Next Step Toward Home Ownership
Congratulations on your decision to purchase a home! As you can see, the mortgage process doesn’t need to be daunting. Take the time to look into the options that best fit your financial situation and reach out to lenders that may be able to help.
Even after you complete your mortgage process, the opportunity to save isn’t over. In the future, you can get a refinance quote for more opportunities to lower your mortgage rate and payments.
Frequently Asked Questions
1) Q: How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
2) Q: How much interest will I pay?
Interest that you will pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
3) Q: How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first-time buyers. Check out the lenders that specialize in making the home buying experience a breeze.