As reported by Zillow, the housing market in Connecticut is considered “less healthy.” With a median listing price of $315,000 and a Zillow home value index of $241,800, the state has a somewhat higher-valued market than the typical U.S. market does.
The median national listing price is $275,000, and the national home value index is $220,000, which is lower. Connecticut home values are much higher than they were at the lowest point of the housing crisis that began around 2007 during the Great Recession, although they have yet to recover their value fully.
Overall, Connecticut has a market that is recovering from the downturn and steadily adding value. The October 2008 Zillow home value index for Connecticut was $259,000, but this fell to a low of $212,000 on May 2012. At $241,800 now, Connecticut homes have yet to recover what they were worth completely.
When shopping for a mortgage or refinance in Connecticut, it is important to remember that the national economy does have an impact on mortgage rates. Local economics, Connecticut state laws, foreclosure rates, lender competition for borrowers and average home values also have influence.
In this article, we will talk about some of the factors prospective applicants should think about as they apply for a loan in Connecticut. We will also provide advice for borrowers on how to find the best Connecticut mortgage rates.
Current Mortgage & Refinancing Rates in Connecticut
Critical Elements That Affect Mortgage Rates & Refinance Rates in Connecticut
Many factors impact mortgage and refinancing rates in Connecticut. It is essential to consider how these considerations may change rates, since differences between loan options may save applicants thousands of dollars every year. You can use this information to help you qualify for a home mortgage loan.
Down payment
Applicants should consider paying the largest down payments they can to qualify for the best loan options. Smaller down payments are considered a higher risk to lenders, so they may charge higher interest rates on a mortgage or refinance loans. Paying at least 20 percent down can help you qualify for the best mortgage rates.
Credit score
This is among the most important factors for most applicants. Borrowers with low credit scores are considered to be a higher risk than applicants who have high credit scores, generally speaking.
Borrowers with low credit scores will likely be offered higher interest rates and may be expected to pay a more substantial down payment to qualify for a loan. The best mortgage and refinance terms are generally provided to borrowers with the highest credit scores.
Loan term length
Mortgage loans are commonly offered in 10-, 15-, and 30-year terms. Longer mortgage terms generally result in higher mortgage rates from lenders. Shorter terms typically get the best rates. However, short loans also mean larger monthly payments for homeowners.
Many people choose longer-term lengths in order to get a lower overall monthly payment. This may make the home more affordable each month.
Refinance type
If you are refinancing, pay close attention to the kind of program you choose. Some programs have very low rates, but these rates may differ tremendously. Some borrowers take out a cash-out refinance to use their home equity, while others pay more cash into their home and reduce the remainder they owe. These options may have different rates and monthly payments.
Loan size
Big loans and small loans can both have higher or lower rates depending on how much the home price differs from what is typical for the local or national market.
For example, expensive homes may be seen as a higher risk if large loans are needed to buy them, while a small loan may be risky if the house is low in value because it is in a depressed market with a high foreclosure rate. It is a good idea to shop around, particularly if the loan you need is significantly bigger or smaller compared to your local market.
These factors are not the only relevant considerations, in any case. You should learn more about your market in Connecticut and compare several offers from different lenders and loan types.
How to Get the Best Mortgage & Refinancing Rates in Connecticut
If you get more than one quote, you have a better chance of finding the best mortgage rates and refinancing rates in Connecticut. Often, buyers choose the first lender and end up losing out on a great mortgage deal that meets their needs. This can be expensive.
In some situations, borrowers pay thousands or tens of thousands more over the length of their loans. As the Consumer Financial Protection Bureau notes, just the difference between a 4.0 percent loan and a 4.5 percent loan can add up to $3,500 within the first five years on $200,000 loan.
To start shopping around for the best Connecticut loans, try taking these steps:
Look at more than one type of mortgage or refinance program
Depending on your financial goals, your credit profile and your assets, your best loan may be different from other borrowers. Researching a few different types of mortgage and refinance programs or a few different lenders can pay off.
Many lenders offer special bonuses and incentives, including adding closing costs to loans or waiving their underwriting fees. Don’t forget that you can often negotiate better terms in many instances, too.
Add the full costs and fees for every offer for an accurate comparison
Remember that the rates and specials lenders advertise are not always the cheapest options for you. You should add the total costs for each loan including fees, broker costs, underwriting costs, prepayment penalties, and closing costs.
Asking for a Good Faith Loan Estimate and Closing Disclosure form can tell you what estimated costs to expect with your refinance or purchase.
Recommended Companies in Connecticut
Many different lenders offer mortgages in Connecticut. As you apply, be sure to consider several lenders and compare their quotes. This can help you be more confident about the home buying process and can help you find the best possible loan options for you.
Before you call or speak with a bank or mortgage company, be sure to think of a few questions to ask a potential mortgage lender. Here are a few recommended mortgage lenders in Connecticut:
AmeriSave Mortgage Corporation: Compare rates online for Connecticut mortgages with AmeriSave’s extensive published rate charts. Alternatively, you can fill out a few answers about your needs and get a customized quote.
Rocket Mortgage: Receive approval in minutes and use their RateShield Approval program to lock in your rate for 90 days while you shop for a home.
J.G. Wentworth: Provides online rate quotes without asking for personal information, so you can quickly get a quote to compare with other lenders. CrossCountry Mortgage: Request a custom rate quote online, and a loan specialist will walk you through your options.
