Step 2: Assess your credit and finances

The buyers who win in Connecticut's tighter towns are the ones who have their financing sorted before they tour a single house. Sellers take a pre-approved buyer seriously, and a buyer who knows their real monthly number does not waste weekends on homes they cannot afford or walk away from ones they can. This step is about getting those numbers straight.

Check your credit first

Pull your credit reports from all three bureaus, which you can do free once a year, and read them. Look for accounts you do not recognize, late payments that were not late, and balances that are wrong. Disputing an error takes a few weeks and can move your score meaningfully. Your score drives your interest rate, and a small rate difference on a thirty-year mortgage adds up to real money.

In the months before you apply: pay everything on time, pay down revolving balances, do not open new credit cards or finance a car, and do not close old accounts. Lenders like long, boring credit histories.

Down payment: less than you think

Twenty percent down is not required, and most first-time buyers in Connecticut put down far less. Conventional loans start at 3 to 5 percent down. FHA loans allow 3.5 percent. VA loans for eligible veterans and USDA loans in eligible rural areas, which cover a surprising amount of eastern Connecticut, can be zero down. Putting less than twenty percent down usually means paying mortgage insurance, which is a cost worth understanding but not a reason to wait years while prices rise.

Connecticut also has state programs worth knowing about. The Connecticut Housing Finance Authority, or CHFA, offers below-market mortgages and down payment assistance for first-time buyers and buyers in targeted areas, and the state has run additional down payment assistance programs for eligible buyers. Program terms change, so ask your lender which ones you qualify for today.

Closing costs and cash to close

Beyond the down payment, plan for closing costs. For a Connecticut buyer these typically include:

• Your attorney's fee. Connecticut closings are handled by attorneys, and you will have your own.
• Lender fees, the appraisal, and the credit report
• Title search and title insurance
• Recording fees for the deed and mortgage
• Prepaid items: the first year of homeowner's insurance, and property tax and interest adjustments
• Home inspection, radon test, and well and septic tests if applicable, paid at the time of inspection

As a rule of thumb, budget two to four percent of the purchase price for closing costs on top of your down payment, and keep a cushion after closing. In some deals a seller will agree to pay part of your closing costs. Your lender will give you a Loan Estimate that spells out every number, and your agent will help you read it.

Get pre-approved, not pre-qualified

A pre-qualification is a conversation. A pre-approval is a lender actually reviewing your credit, income, and assets and putting in writing what they will lend you. In Connecticut, listing agents expect a pre-approval letter with every offer, and a strong one from a known local lender makes your offer more credible than the same price from a buyer with a generic online letter.

To get pre-approved you will need recent pay stubs, two years of W-2s or tax returns, two months of bank statements, and photo ID. Self-employed buyers should expect to show two years of returns and a year-to-date profit and loss.

Your number is not the lender's number

A lender will tell you the most you can borrow. That is rarely the number you should spend. Work backward from a monthly payment you are comfortable with, including principal, interest, property taxes, insurance, and any mortgage insurance or condo fees. Connecticut property taxes vary a lot by town, and the same house can carry a very different tax bill in Glastonbury than in Colchester, so we build the tax into every payment estimate rather than leaving it as a surprise.

Leave room for heating oil or propane, which most of eastern Connecticut still uses, for maintenance, and for the things a new house always needs in the first year.

Choosing a lender

Rates matter, but so does execution. A lender who misses the commitment date can cost you the house. We work with local lenders every week and know which ones close on time, return calls, and do not spring conditions at the last minute. Get quotes from two or three, compare the Loan Estimates line by line, and let us know who you are working with so we can keep them on schedule.