How much of a downpayment do you need in order to buy a home in CT?

You may have heard that you need a 20 percent downpayment, a 10 percent deposit,  five percent down, or even less to buy a home. It really all depends on a  number of factors besides your credit-  including your income, your liquidity (or cash on hand), your debt ratio, and what price range that you are looking in.

Years ago, the accepted standard for a downpayment was 20 percent. Prices were also much lower then, and that twenty percent downpayment was a lot easier to attain. We call that percentage a  conventional downpayment nowadays.  At some point a ten percent deposit was acceptable, as long as you paid the bank Private Mortgage Insurance (PMI).  PMI is essentially insurance to cover the bank  in case of a default. When you reach 20% equity and can prove it, you can usually get the PMI removed. For you professionals out there, yes- I am simplifying it for the masses. If and when you have a question about PMI, it's best to contact your mortgage broker or the bank that holds your loan for their policies.

Around twenty or so years ago,  five percent down became an acceptable downpayment, and much more common than one might think. It has been  fairly common ever since. You can also get a government backed loan with as little as 3.5 percent downpayment (FHA). The PMI is necessary for these loans as well, although some loan providers also allow you to opt to pay a one time PMI  fee, instead of monthly, or a combination of the two.

Now that we have the percentages down, you also have to qualify for the loan amount that you are looking for.  Of course, I can give you an estimate, but it really is best to meet  with a mortgage broker  who can guide you in the right direction with the loan amount and type of loan that's best for you. We  post current financing rates here every Friday  and you can check our blog for rates, and you may wish to Contact a Mortgage Broker to get clarity on your particular situation. We happen to like Jennifer Buchanan, among others. See her contact info at the bottom of Every Friday's Financing Update.

If you really think about it, and you were thinking about just renting a home, you may want to consider buying.  In order to rent anywhere, you generally need three months rent to move in. (That's one months rent, and two months security) That number is usually very close, and in some instances MORE than a 3.5 percent deposit. We can always negotiate closing costs, so you may very well be able to buy when you only thought you could rent. Give it some thought.

The rates are historically low, and prices are very good right now. You would be getting in on the ground floor!

If you are thinking about buying and want to browse the MLS, you can do so with unlimited access right here on our site, or if you are ready to look right now, we can get started right away. We 'll get you the best deal whenever you're ready.

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Connecticut Mortgage Rates and Financing Update September 2, 2011

Rates continue to be historically good, and should be for quite some time. Of course we will see daily fluctuations, but with the Fed firmly in the 0% and plan to stay there mode, mortgage rates should continue to sit around these levels for quite some time.

This week's Financial News

 The Wall Street Journal reported that "Bank of America Corp. intends to sell its correspondent mortgage business, as the troubled lender looks to narrow its focus and bolster its financial strength...Employees could be notified as soon as Wednesday that the lender has decided to exit the correspondent channel because it no longer fits with the long-term strategy for its mortgage unit. The company decided to get out roughly four to six weeks ago, following a review led by mortgage chief Barbara Desoer. The business employs more than 1,000 people."   What this means is, there are fewer and fewer big lenders in the business, the pricing on Chase home loans last week were in excess of 1.00% higher than other lenders - big banks do price themselves out of the market when - they are about to close a division or they have more loans application than they can close.  


The Federal Housing Finance Agency (FHFA) has reported the national average mortgage rate for the purchase of previously occupied homes by combined lenders was 4.57 % for loans closed in July - a decrease of 0.05% from the previous month. The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased to 4.69% in July. The FHFA also reports that the contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.55% in July, down from 4.61% in June. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.67% in July, down 7 from 4.74% in June.


U.S. home prices increased by 3.6% in the second quarter, after having fallen 4.1% in the first quarter, according to new data from the Standard & Poor's (S&P)/Case-Shiller Home Price Indices.

"Looking across the cities, eight bottomed in 2009 and have remained above their lows," says David M. Blitzer, chairman of the index committee at S&P Indices. "These include all the California cities, plus Dallas, Denver and Washington, D.C. - all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities - Las Vegas, Miami, Phoenix and Tampa - as well as the weakest of all, Detroit. These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together."   Today's Mortgage Rates 30 year fixed - 4.250% 0 points for rate 20 year fixed - 3.875% 0   points for rate 15 year fixed - 3.250%  0 points for rate 10 year fixed - 3.250%  + 1.00 lender credit points for rate 5/1 ARM - 2.50 %  0 points for rate 7/1 ARM - 3.00%  + 0 points for rate FHA/VA 30 year fixed - 4.250% +  0 points for rate 5/1 ARM  - 2.75+  0 points for rate 7/1 ARM - 3.250 + 0 point for rate Jumbo - over 729,000  up to 2,000,000 with 20% down on purchase 30 year fixed - 4.750 % with 0  points  for rate 15 year fixed - 4.375 % + 0   points for rate 5/1 ARM - 3.250 % + 0 points for rate 7/1 ARM - 3.75% + 0 points for rate 10/1 ARM -  4.375% with + 0 points cost for rate Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.    Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.    Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)     She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike. Jennifer Buchanan Metlife Loans 203-341-6949

Connecticut Mortgage Rates and Financing Update August 26, 2011

Now more than ever, it's imperative to compare rates, as the big lenders have pipelines full of loans for refinances, they have raised their rates to control their pipelines, and do not show signs of lowering them.  Also, with the market moving at break neck speed the bigger lenders are much slower to update and reprice their loan products. 

This Week's Financial News

MBS dipped from 104  to 103 -16 at super sonic speed. 10 year yields rose from 2.13 to 2.21 in the same instant. Why? Over the last 3 Jackson Hole days 10 yr yields have swung an average of 16 bps.   The fact that recent swings in 10 year yields took them exactly to a technical level and a supportive bounce reinforces the current marketing thinking there is no reason to panic. Fannie 4.0's are back to 103-30 now. 10 year yields are at 2.188.  

“With average prices on distressed real estate trending down and average discounts trending up, this report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” said James Saccacio chief executive officer of RealtyTrac. “Maybe less evident, however, is the good news in this report for distressed homeowners looking to sell, and even lenders saddled with large portfolios of delinquent loans."  

(Reuters) - Federal Reserve Chairman Ben Bernanke on Friday stopped short of signaling further action to boost growth, but said it was critical for the economy's health to reduce long-term joblessness. "It is clear the recovery from the crisis has been much less robust than we had hoped," he said in remarks prepared for delivery to an annual Fed retreat. Bernanke said the Fed will meet for two days in September instead of the planned one to mull its options to provide additional monetary stimulus, among other topics. The Fed chairman said reducing the record high level of workers who have been unemployed for six months or more would help achieve stronger U.S. economic growth. "Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well," he said. (Reporting by Mark Felsenthal; Editing by Neil Stempleman)

Bernanke spoke at this same conference a year ago amid similar fears, and laid the groundwork for an aggressive bond-buying program by the Fed. Some hoped for a similar monetary boost this year. But with inflation inching up, Bernanke has less room to maneuver.

Today's Mortgage Rates

30 year fixed - 4.125% + ..50 points for rate
20 year fixed - 3.75% + .375 lender credit  points for rate
15 year fixed - 3.250% + 0 points for rate
10 year fixed - 3.250%  0 points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 4.250% +  0 points for rate
5/1 ARM  - 2.75+  0 points for rate
7/1 ARM - 3.250 + 0 point for rate

Jumbo - over 729,000  up to 2,000,000 with 20% down on purchase
30 year fixed - 4.750 % with +.50 cost  points  for rate
15 year fixed - 4.375 % + 0   points for rate
5/1 ARM - 3.375 % + 0 points for rate
7/1 ARM - 3.75% + 0 points for rate

10/1 ARM -  4.375% with + 0 points cost for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Connecticut Mortgage Rates and Financing Update August 19, 2011

Purchasing a home is currently cheaper than renting in 74% of major U.S. cities, according to Trulia's Summer 2011 Rent vs. Buy Index , which compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse in the nation's 50 biggest cities

Thursday was one day where the importance of  watching the Treasury market for mortgage rate indications was clear.  Although there are a few instances of lower-than-2% 10 year rates in the ancient past, the fact that 10 year notes dipped into the 1's is an unprecedented event in modern economic history.

With a market this volatile and moving this quickly, the secondary mortgage market simply can't keep pace with the Treasury yields.  These  rapid movements ultimately weaken current mortgage rate offerings.  The best thing for mortgage rates right now is stability.

Borrowing costs are higher this week.  When volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). The added costs are passed down to consumers. These costs are unavoidable.

This Week's News as it Relates to the Mortgage Industry and You.

Some lenders have been adjusting their loan pricing much higher because they can't take-in anymore business.  They have pushed rates higher to encourage consumers to either wait it out or find another lender offering lower rates.  

CURRENT MARKET as reported by Mortgage Rate Watch - The Best Execution 30-year fixed mortgagerate  has fallen to 4.125%.  Several lenders are willing to offer 4.000% and even 3.875% is possible for those interested in buying down the rate with points. 4.250% is widely-available. On FHA/VA 30 year fixed Best Execution is 4.000%, but 3.875 and even 3.750 are available with additional closing costs. 15 year fixed conventional loans are best priced at 3.625% but we're seeing aggressive quotes as low as 3.375%. Five year ARMs are still best priced at 3.25. ARMs seem to have bottomed out.

Today's Mortgage Rates

30 year fixed - 4.125% + .0 points for rate
20 year fixed - 3.750% + 0  points for rate
15 year fixed - 3.375 % + 0 points for rate
10 year fixed - 3.250%  + .50 points credit for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 4.00 % +  .500 points for rate
5/1 ARM - 2.750 +  0 points for rate
7/1 ARM - 3.125 + .250 point for rate

Jumbo - over 625,500 - to 2,000,000 Fairfield County
30 year fixed - 4.625 % + 0  points  for rate
15 year fixed - 4.250% + 0   points for rate
5/1 ARM - 3.125 % + 0 points for rate
7/1 ARM - 3.625% + 0 points for rate

10/1 ARM -  4.250% + 0 points cost for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

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Connecticut Mortgage Rates and Financing Update August 12, 2011

It's easy to be confused, or misled, with seemingly simple numbers. For example, you are saving for your child's college costs, expected be about $100,000.  You are 80 percent funded with $80,000 in your account. The next year, your investment account drops 25 percent in value, to $60,000. The year following year it bounces back 25 percent. Is the value back to where you started? No, because now you have $75,000 in your account. Assume college costs are rising 8 percent per year.  How close to paying for college are you? The answer: 64 percent, because you have $75,000 toward $117,000 of costs.  Even though your investments rose the same percentage as they fell, you're further from your goal than before. This is the same situation faced by pension funds.  This is why, if you are locking in a loan, at these historically low rates, you MUST think of your long term and short term financial plans. 

This week's News as it relates to the Mortgage Industry and You.

The Federal Reserve took the extraordinary step of announcing that it was minded to keep the federal funds rate close to zero for at least two more years. It also restated that it was "prepared to employ" a "range of policy tools" if the economy worsens, which some think might include a third round of bond-buying.  

As stock markets tumbled, the price of GOLD surged to trade above $1,800 a Troy Ounce, reaching parity with platinum prices for the first time since the end of 2008.

AMERICAN INTERNATIONAL GROUP (AIG) lodged a lawsuit against BANK OF AMERICA, claiming BofA sold it low-risk securities backed by "defective" mortgages given to low-income borrowers. It is one of the biggest claims so far to originate from the practices that led to the financial crisis; suits against other big banks are expected to follow.

Today's Mortgage Rates

30 year fixed - 4.125% + .0 points for rate
20 year fixed - 3.750% + .250  points for rate
15 year fixed - 3.250% + .250 points for rate
10 year fixed - 3.250%  + 1.125 lender credit  points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 3.874% +  .500 points for rate
5/1 ARM - 2.750 +  0 points for rate
7/1 ARM - 3.125 + .250 point for rate

Jumbo - over 625,500 - to 2,000,000 Fairfield County
30 year fixed - 4.750 % + 0  points  for rate
15 year fixed - 4.250% + 0   points for rate
5/1 ARM - 3.125 % + 0 points for rate
7/1 ARM - 3.625% + 0 points for rate

10/1 ARM -  4.250% + 0 points cost for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949