Thinking of buying a home in Connecticut? It could be a really smart move, as The Constitution State is steadily seeing improvements in their real estate values.
According to data from Zillow, Connecticut’s median home value is expected to increase 0.3% within the next year. On top of that, mortgage rates are staying near historic lows and the availability of low money down mortgage programs are favorable. One such program is the FHA mortgage, which allows home buyers to pay as little as 3.5% for a down payment.
Benefits of FHA Financing
Whether you’re buying a house in Hartford, a condo in Stonington or a duplex in Danbury, an FHA loan can likely meet your home financing needs at an affordable cost. Here are a few reasons FHA financing can be very beneficial for Connecticut home buyers:
1. Low down payment requirement, potentially allowing you to “buy more house.”
According to Zillow, the median sale price of a home in Connecticut is $241,885 (as of Feb. 2016). With most conventional home loans, a down payment of 20% is customary in order to avoid paying costly PMI (private mortgage insurance). Well, 20% of $241,885 is $48,377 – no small piece of change.
Buyers who are relying on conventional financing may have to scale down their home buying budget simply to afford the down payment. FHA borrowers on the other hand, have less concern with coming up with tens of thousands of dollars up front, and therefore could be more flexible with their budget.
2. FHA loans allow financing on homes with 1-4 separate living units, as long as the borrower occupies one of the units as his/her primary residence. For example, you could buy a duplex, live in one unit, and rent the other unit out for extra income. This could be a great way to get started in investment real estate.
Connecticut has a lot of duplexes, triplexes and four-unit apartment buildings that are just waiting for the right investor/homeowner to come along! Check out a few we found online:
Here’s a lovely Manchester duplex.
And another one in Hartford.
And this 3-family home in Washington Depot is loaded with charm!
3. The FHA loan limits in Connecticut are fairly high, meaning you can use an FHA loan to finance homes that are priced fairly high, if you need to. Why is this a benefit? Because if the FHA limits were lower, less Connecticut home buyers would qualify, since home prices in CT tend to be higher than in other parts of the country.
And since different parts of each state vary when it comes to home prices, the FHA sets certain limits per county, based on home values in those areas. For example, the FHA loan limit for a single family home n Fairfield County is $601,450. By contrast, the FHA loan limit for a single family home in Middlesex County is $353,050 and in Windham County, the limit is $285,200.
To determine the FHA loan limits for your county, speak with one of our mortgage professionals or check online using the HUD’s official website.
If you’d like to learn more about FHA home loans from Luxury Mortgage, please don’t hesitate to reach out to us. We can provide you with more details of our Connecticut FHA loans and a free rate quote, just for contacting us. And if you decide to move forward, we can get you on the path to pre-approval in no time. Simply call us or fill out the form on this page to request more information.
Call us today: (888) 379-0303
Four Landmark Sq. Suite 300
Stamford, CT 06901