Best Vermont (VT) Mortgage Lenders for First Time Home Buyers

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Contributor, Benzinga
February 18, 2022

Are you getting ready to buy your first home in Vermont? Congratulations! Buying your first home is a huge step. Let Benzinga make this process easier by helping you find the best mortgage lenders in the Green Mountain State.

Best Mortgage Lenders in VT for First Time Buyers

Now that you understand the different mortgage types, programs for first time home buyers in Vermont and how rates impact the interest you’ll pay, it’s time to start searching for the right lender for you. We’ve grouped the top lenders in Vermont so you can easily find the lender that best meets your needs.

The Housing Market in Vermont: An Overview

Before we jump into the different mortgage options available in Vermont, it’s important to understand the overall health of the housing market. 

Total households: 240,634 households

Median list price: $314,562

3 most expensive cities in Vermont to buy a house:

  • Burlington median home value: $355,936
  • Essex Junction median home value: $325,227
  • South Burlington median home value $314,466

3 most affordable cities in Vermont to buy a house:

  • Newport median home value: $136,800
  • Rutland median home value: $137,931
  • Bennington median home value: $177,276

Understanding the average home values and listing prices can help you set your expectations as you shop for your new home in Vermont.

Preparing for a Mortgage

You probably have a lot of questions about how the mortgage process works if you’re a first time homebuyer. We’ll walk you through what you’ll need to apply, how the process works and explain any important information you should be aware of.

The First Time Home Buyer’s Mortgage Process in Vermont

The process for applying for a home is typically the same whether you’re a current or new homeowner. Take a look at your financial situation before you start shopping for a home or mortgage lender.

  • Decide how much of a down payment you can afford. You can find options as low as 3% or even no money down. Typically, the more money you can put down on your home, the lower your mortgage rate. Figure out which option is best for you by reviewing your savings.
  • Check on your credit score. It’s a good idea to know where your credit stands before you start applying for a mortgage. Some lenders require a credit score over 700 and some require a lower credit score. Understanding where you fall will help you figure out which lender incentives are most appealing to you.

Your credit score also plays a role in determining your mortgage rate (or interest rate) on your home loan. Typically, the higher your credit score, the lower your rate.

You can start looking for a mortgage that meets your needs once you have a better idea of your financial situation. 

What You’ll Need

You’ll need to have some financial paperwork ready to go when you apply for a mortgage. Here’s what most lenders will ask for when making decisions about mortgage approval:

  • Your Social Security number
  • Taxes from the past 2 years
  • Your pay stubs from the last 2 months
  • The amount of money in all of your banking accounts (checking, savings, investments, retirement, etc.)

Some lenders require additional paperwork, but those are the basic documents you should have ready to go when applying for your home loan.

LenderMinimum Credit Score Required
Quicken Loans®620
Flagstar620
Discover Home Equity620
PNC700
AllyN/A (no minimum credit score)

Mortgage Options

As a first time homebuyer, it’s important to explore all of the mortgage options available to you. Here’s a quick breakdown of the four main types of mortgages in Vermont.

Conventional Loan

A conventional home loan is funded by banks or financial institutions. These mortgages are not backed by the government, and as a result, often have higher interest rates. On the plus side, these home loans tend to have lower eligibility requirements, making it easier for first time home buyers to get approved.

FHA Loan

An FHA home loan is funded through the Federal Housing Administration and is typically for first time home buyers. This government-backed loan typically has below-market interest rates and offers incentives like 3.5% down payment options and 580 credit score requirements. You can apply for FHA loans through most conventional lenders.

USDA Loan

A USDA home loan is funded through the Department of Agriculture for homes located in rural areas of the United States. This government-backed loan typically has below-market interest rates and offers incentives like low- or no-down payment options and 640 credit score requirements. You can apply for USDA loans through most conventional lenders.

VA Loan

A VA home loan is funded through the Department of Veteran Affairs for current or former military members and their families. This government-backed loan typically has below-market interest rates and offers incentives like no down payment options and no credit score requirement (though these can vary by lender). You can apply for VA loans through most conventional lenders and VA-only lenders.

Jumbo Loan

A jumbo loan can be a conventional or FHA loan that is required for properties with a value of over $484,350 — the limit is higher in more expensive areas of the country. These loans typically have stricter credit requirements and higher down payment expectations. Most lenders require 20% down payments for these loans, but some lenders, like Quicken Loans®, only ask for 10%.

Next, we’ll look at some other home loan programs and grants you might qualify for as a first time home buyer in Vermont.

First Time Home Buyer Programs in Vermont

There are grants and down payment assistance programs available to help first time homebuyers in Vermont better afford a home. These programs can often be combined with most loan types, including FHA loans.

  • VHFA Mortgage: This mortgage is offered through the Vermont Housing Finance Agency (VHFA) to help low- to moderate-income buyers afford a home. Incentives include a 0% down payment option, $825 in property tax savings, down payment and closing cost assistance up to $5,000, reduced tax liability and lower monthly payments.
  • VHFA ASSIST: This down payment assistance program can be used with the VHFA Mortgage if you are a first time buyer with less than $30,000 in assets. This program can cover up to $5,000 in down payment costs.
  • MOVE: This mortgage program offers the lowest rates possible through the VHFA to save you more on interest over the lifetime of your loan. You can also save up to $825 in property tax costs.

Current Mortgage Rates in VT

Mortgage rates are the interest rate you’ll pay on your home loan. Locking in a lower interest rate can help you save tens of thousands in interest over the lifetime of your loan. Your lender will determine your mortgage rate based on your credit score, down payment, your home’s location, your mortgage type and your mortgage term (the length of your home loan).

There are 2 major loan terms to choose from: fixed and adjustable. A fixed mortgage allows you to pay a set amount every month for the duration of your home loan. An adjustable-rate mortgage (ARM) does not have a fixed rate. You’ll pay a set rate for an introductory period and then the rate will fluctuate based on the real estate market.

Rates in Vermont vary from city to city and change with the market. Benzinga stays up to date on local market trends and we can provide you with the most current mortgage rate information for your state.

Let’s take a look at some typical loan terms and mortgage rates for the Green Mountain State.

Loan TypeRateAPR
30-year fixed 6.655% 6.739%
15-year fixed 5.958% 6.098%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) 6.938% 7.753%
Rates based on an average home price of $254,234 and a down payment of 20%.
See more mortgage rates on Zillow

Closing a Mortgage

Closing on your mortgage is the last step in the home loan process. You sign all paperwork, verify all information is correct and review and confirm the terms of your home loan. You’ll also need to have your down payment and closing costs ready.

On closing day, you’ll typically walk through the property to confirm its in the agreed-upon condition in your contract. This walkthrough can also be scheduled for the day before. Afterward, you’ll meet with your agent (and sometimes the seller and their agent) to complete all paperwork and finalize your home loan. 

Once all the paperwork is complete, you’ll receive the keys to your new home.

The closing process can take between 30 – 45 days, depending on your lender. Online mortgage lenders like Quicken Loans® can usually speed the process up with faster approvals and quick document verification.

Let’s take a look at some of the average closing days from 5 of the top lenders in Vermont so you know what to expect.

LenderAverage Days to Close Loan
Quicken Loans®30 days
Flagstar3 days
Discover Home Equity45 days
PNCN/A (no data available)
AllyN/A (no data available)

Ready to Buy Your First Home in Vermont?

There are plenty of first time home buyer options and assistance programs available in Vermont. Be sure to review your financial information, decide how much you can comfortably afford to spend and determine which lender incentives are most important to you.

Look for a lender that offers the benefits you’re most interested in and be sure to shop around until you’ve found the right fit. Remember, it’s your financial future — it’s okay to take your time.

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.