By Paul Mulligan, SVP, Retail Lending
Last year, while many businesses and industries suffered, the real estate market in Connecticut had a phenomenal year, with a 17% increase in home purchases. The 38,641 single-family homes bought was the highest in the state in 15 years. One factor certainly was the fact that the number of people moving into Connecticut in 2020 was more than double what the state enjoyed during 2019.
One of the byproducts of the trend was an increase in home prices, which also grew. As a result, many people may feel they are being priced out of the home market. Renters, in particular, are feeling less confident that they will be able to buy homes. Just over a third of current renters say they are “not very confident” or “not confident at all” in their ability to buy a home. The majority say their lack of confidence comes from home prices being too high or an inability to afford a down payment.
But, that shouldn’t mean renters should stop thinking about buying a home. There are many benefits to owning, including:
- Freedom to renovate/decorate
- Building equity
- Potential tax benefits
- Value could increase over time
- Stability of ownership
- Predictable monthly loan payment (with a fixed-rate mortgage)
There are also many variables to consider when buying a home; including location, size and type of home, features, and of course, cost. If you’re ready to buy a home – or even if you’re just starting to consider it – one of the first things you may want to consider is your priorities? That includes what are the must have, nice-to-have, and unnecessary features. If you’re willing to add flexibility to your process, you should enjoy greater home selection opportunities.
In addition, your local community bank may be able to offer you better mortgage terms that may make it easier for you to get out of paying someone else for your living space and start building equity in your own home. For instance, The Milford Bank offers highly competitive rates with no-cost lock-in, low down payment options, free prequalification to make your home shopping experience easier, decisions made locally by a bank with a long history of serving the local community, and mortgage professionals that focus on your individual needs as a local customer.
In addition, if you’re a renter looking for your first home, The Milford Bank offers a First-Time Homebuyer program within Milford, Stratford, West haven, and Orange; that includes a rate reduction from the standard rate, application fee refund on closing, and low down payment options. The Milford Bank also offers a special rate for single family dwelling purchases, regardless of location throughout the state of CT.
You may also want to consider current versus future plans. When looking at homes and talking to your bank, consider how you might be able to expand a potential home in the future to meet additional needs or to add some of the nice-to-have features that might not be feasible initially. You may even be able to use the equity you build in your home over the years to take out a home equity loan or line of credit to fund home improvement projects. Alternatively, The Milford Bank offers a construction-to-permanent one closing loan option, which includes the option of a fixed rate and an interest only period of up to 12 months during the construction phase.
The bottom line is, if you are looking to buy a home – whether you’re tired of paying a monthly rent to a landlord or association or you simply want the freedom and convenience of owning your own home – don’t let your lack of confidence keep you from achieving your dream. Talk to The Milford Bank’s local mortgage specialists, who can provide you with the information and assistance you need to make a truly informed decision to assist you in purchasing a home that fits your needs and budget.