How to Get a Mortgage in Connecticut

Getting a home mortgage loan doesn't have to be a daunting, overwhelming experience. Actually, acquiring a home mortgage can be easy if you connect with the right lending institutions and real estate agent. You can simplify the mortgage loan process with these easy steps, and hopefully save yourself time and money in getting a Connecticut home mortgage loan.

Difficulty: Moderate

Instructions

1. Examine your credit report and clear up any mistakes or inconsistencies.

2. Connecticut has the "Abusive Home Loan Lending Practices Act" which restricts balloon payments and default charges as well as prepayment penalties. It also bans mandatory arbitration clauses and other predatory lending (intentionally coercing consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit) practices.

3. Determine which home mortgage program will suit you best. Contact several different lending institutions like credit unions, banks, online mortgage companies and mortgage brokers (individuals and agencies that arrange financing from a variety of lenders), and shop for the best deals.

4. Connecticut mortgage brokers are required to be licensed and carry a surety bond of $40,000. Politely ask for a copy of their license.

5. Try to avoid Adjustable Rate Mortgages. These move some of the interest rate risk away from the lender and onto you. Basically, if interest rates rise, so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly. If there is a huge spike in interest rates, you could lose thousands.

6. Research home mortgage programs through Connecticut and the federal government. The state of Connecticut offers programs for veterans, disabled, low-income buyers, single parents, senior citizens, and rural home buyers, such as: Urban Rehabilitation Homeownership Program, Teacher Mortgage Assistance Program, and the Police Homeownership Program among others.

7. Decide on a lender and get pre-approved for a home mortgage loan. Remember to bring all paperwork, including pay stubs, tax refunds, investment information, and other specified documents.

8. Look for a real estate agent. Meet with a few different ones if necessary to find one that you're comfortable with.

9. After finding the right home, fill out the final loan documents from your lender, and make an offer.

10. Pay all legal and closing fees and move into your new home.

Tips & Warnings

• Shop around for the lowest interest rates. Even one quarter of a percent can mean thousands of savings over a 30-year mortgage.
• If you don't have your home professionally inspected, you may discover problems with the home too late.
• Do not let a real estate agent pressure you to buy a specific home, they may have another agenda.
• Before you sign anything, make sure that you thoroughly understand all the terms of the mortgage contract.
• Never pay a lender to apply for a loan. No respectable lenders will ask you to pay them to apply for a loan.
• Record low interest rates have led to many lending and loan scams. Have an attorney review any documents before you sign them.
• Check to see that the home title is clear of liens before you buy it.