The Colorado Housing Market

Today’s Colorado housing market is scarce and overpriced. That does not mean there is no opportunity for buyers. In fact, one may argue, there is more opportunity in today’s market than there has been for many years. The Colorado market is strong and prices continue to soar. Rents and appreciation are high and mortgage rates remain historically low. In other words, there are plenty of opportunities in Colorado.

There are also, however, hurdles to overcome. It is very difficult to find and home and once you find the right home, you often have to contend with multiple offers. Buyers may have to overbid the listed selling price by several thousands of dollars. Finding a Realtor is not hard but finding an experienced and knowledgeable Realtor can be difficult.

We help buyers solve problems. Here is a brief outline of the steps to follow when buying a home.

1) Gathering up loan documents and obtaining pre-approval letter from your local lender.

2) Searching for your new home via the MLS (with your Realtor)

3) Placing an offer and getting the home under contract.

4) Ordering the inspection, appraisal, title and providing your lender with the necessary paperwork.

5) Finish up with your loan and setting the closing date and time.

6) The loan closes and you can now move into your new home!

Once you have completed these above steps, most clients may need to find a handyman or two for fixes in the house. A good Realtor will have access to reasonable and responsible people who can help repair and update your new home after the closing.

Contact us today for a loan consultation!

Phone: 303-578-9202

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Buying an investment property in Colorado

Buying an investment property in Colorado can be a very beneficial investment if done correctly.

There are many different strategies for buying investment properties in Colorado and the specific type of strategy depends on your personal financial goals.

Are you looking for immediate cash-flow from your investments or are looking for long term wealth…or both?

Let’s take a look at a couple of generic investment strategies that may be beneficial:

Investment strategy #1:

Assuming you already live in Colorado or would like to move to Colorado, you take out a primary residence home loan and buy a property. This can require between 3-5% down.

You move into the house and pay the mortgage payment for at least one year. After a year, you decide to rent the first house out and buy another property as your new primary residence. You now have two properties, one you live in and the other your rent. Your rental property mortgage payment is being covered by your rental tenant and the principal on the loan is reducing every month.

In theory, you could continue to do this until you have several rental properties. If you can make extra payments on the property with the lowest loan balance, you can eventually pay the loans off and enjoy the cash-flow of the property into the future.

Investment property strategy #2:

This is an idea for people who have access to 25% or more for a down payment to buy and investment property. The idea is to buy roughly a 300k property and put between 60k-150k down on the property. Assuming you have put 150k down and the new loan amount is 150k, you take out a 15 year loan which provides a lower interest rate than a 30 year loan.

Once your tenant is covering the payment on the 150k mortgage, you then add an additional 2-3k per month extra down on top of that payment. This is obviously quite a sacrifice at first but, by doing so, the loan could be paid off approximately just 3 years! The investment property then turns into a cash-flow generator producing usable monthly income. If you are able to pay several properties off in this way, you will end up with several paid off properties and a generous amount of monthly income for years to come. This is obviously easier said than done but with a little good luck and patience, the outcome is well worth the effort.

Here is a website to learn more about property investment strategies.

As mentioned, these are only generic investment ideas. Everyone has their own style. The trick is to tailor your investment property buying strategy to your ideal quality of life and financial reality.

Happy investing!


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Benefits of the VA home loan

The VA home loan is an essential resource for every eligible veteran to think about. Below is a short information guide followed by a case study which outlines how U.S. Military Veterans have benefited from using their VA loan for a place to live and more.

First of all, as you may know, here is a list of what makes a VA loan so special.

  • 100% financing, zero down payment, and often can even have $0.00 in closing costs
  • More flexible FICO score requirements
  • More flexible income and qualification standards
  • The ability to use the loan more than once, and on different properties simultaneously
  • Zero monthly mortgage insurance
  • Lower interest rates
  • Often lower appraisal costs

As you can see, there are many benefits to using the VA loan. Some might say it is the best government-backed loan available.

Case study: A veteran back from Iraq moves to Colorado and starts his job in a technical transportation field. After 3 months of working in the country, he applies for a VA home loan to purchase a home in Arvada, Colorado. His FICO score is ok at 645 but he has more than $14,000 in debt which total over$500 in monthly payments. He calls Colorado Lenders, Inc and starts his mortgage application. After working only 3 months since his military duty, he is qualified for a $350,000 home with 0% down.

In addition, his Mortgage Broker informs him that he can potentially ask the seller for up to 4% of the purchase price in seller concessions which can be used to pay off current debt at closing. Because the debt will be paid off at closing, the bank doing the VA loan is willing to “exclude” the $500 per month of debt for qualification purposes. This allows the Veteran to qualify for more of a home as well as eliminate a $500/month payment from his current debt. The Veteran now has a new home to move into and significantly less in monthly debt – All with $0.00 out of pocket! A great outcome all around.

To get started on the loan process, we always recommend reading as much information as possible on the website. Once you are ready, give us a call at 303-578-9202 to start the mortgage process.

Colorado VA home loans

Buying a Colorado home for the first time!

Buying a home for the first time

Buying your first home can be both exciting and stressful at the same time. A home purchase is often the largest purchase of someone’s lifetime and you want to get it right. The single most important step upfront is to work out your financing. Speak with a Mortgage Adviser. For them to get a good idea of what you can qualify for, you are going to want to have the following items ready.

– Last 2 years of tax returns (All pages)

– Last 2 years of W-2’s (If applicable)

– 30 days of most recent pay stubs

– Last 2 bank statements (All pages, screenshots ok with the URL on the bottom)

– A copy of your driver’s license and social security card.

With this list of items and a completed application, the Mortgage Broker can pull credit and look over your income and bank statements. The Broker will then most likely run the file through what is called an automated underwriting system for preliminary approval. This kind of approval is more powerful than simply a pre-qualification and can ensure the seller accepts the offer over other offers. The Broker will then determine which type of loan is best for you, such as a Conventional Loan, an FHA Loan, or a VA loan.

Once you have a pre-approval letter in hand, it is time to sit down with the Real Estate Agent and look over which areas you would like to live and what is available within your pre-approved price range. The next step is to have your Realtor provide you a  list of properties you are interested in and set the property showings.

After you have seen several properties and have decided on one, you write the offer.

If the offer is not accepted, you must continue on until you find a house which accepts your offer.

After you have an accepted offer in hand, your Mortgage Broker will ask you for a few more items before submitting the loan.

The loan is then submitted and the appraisal is ordered, usually with your credit card.

Once the loan is out of initial underwriting, you will have a list of conditions to work with your Broker on fulfilling.

Some of these items will include:

– Hazard insurance for the home and any other homes you own.

– A title policy (your Broker will obtain this)

– Any divorce decree if applicable.

– A verification of employment (your Broker will call your employer to obtain this.)

– A copy of 1 month of any retirement accounts or accounts to be used for the down payment.

Once all conditions have been fulfilled, the loan will go back to underwriting for final approval.

In the meantime, the appraisal will be coming back. Make sure to look through your copy of the appraisal and keep a copy. During this time, you will also be completing a home inspection and resolving any issues the property has with the seller.

If any loan conditions remain, your Broker will ask for them at this time.

If the loan becomes “clear to close”, then you can sit back and wait for the closing day. (In most circumstances the timeline is pretty tight and the clear to close comes out very close to the closing date.)

The last step is to wire the down payment money to the title company and to schedule a time for closing.

Then you sign your mortgage and receive the keys from the previous owner.

It is then up to you enjoy your house and always pay your mortgage payment!


FHA Loan

Let’s break down the type of home buyer who would like to benefit from an FHA loan. In general, the FHA home buyer would like to only put 3.5% down. They may have less than perfect credit and have a higher debt-to-income ratio. What is debt to income? Debt-to-income is the total monthly debt divided by income. (add this formula to the video: DTI = home payment+monthly debt / income).

FHA has been known to qualify borrowers with up to a 55% debt-to-income. Also, rates are often lower with an FHA loan. The trade off is that FHA loans carry upfront mortgage insurance and monthly mortgage insurance while conventional loans only require monthly mortgage insurance when borrowers put less than 20% down. In summary, FHA loans are a great way for home buyers to buy a home with little money down.

Contact us today to get pre-approved for a home loan.

VA Loan

The VA loan can be considered the best loan available outside of private money. It offers borrowers the option of putting 0% down. The downside is the upfront funding fee which would depend on how much the borrower is putting down and /or whether the borrower is a first time home buyer or not. The VA loan also boast a more relaxed set of underwriting guidelines which allows for borrowers with less than perfect credit to own their own homes.

We at Colorado Lenders are always excited to offer the VA loan. Another trick that can be utilized with the VA loan is using seller credits to pay off existing debt to qualify. Often lowering the borrower monthly obligations substantially. Call today to learn more.

Conventional Loan

Obtaining a conventional mortgage loan can be quite beneficial over the other loan options. The conventional loan is flexible because it does not require any mortgage insurance with 20% down. And with less than 20% down it provides various flexibility in underwriting guidelines.

The ideal conventional borrower has a higher credit score and a greater down payment, however options with less of a down payment are available. The agreeable feature of a conventional loan is that the mortgage insurance goes away often when the LTV (loan to value) ratio reaches 78% of the home value. Contact Colorado Lenders today for more information about qualifying.

The Colorado Real Estate market is booming!

No matter what city you’re in, either a ton of homes are for sale, or everyone is fighting over just a few homes. This means a couple of different things. First, in the cities where everything is for sale, you can probably count on prices being at a higher level than before (that is why everyone is selling) and you may have a pick of quite a few properties. In the cities where very few homes are for sale, you can count on over-inflated prices and multiple offers on each and every property (except, of course, properties with serious problems.)

At Colorado Lenders, Inc., we are very aware of the difficulties and are prepared to work with buyers to overcome these obstacles. This means pre-approving customers to the degree possible before they go out house hunting. It also means being prepared to increase loan amounts and make adjustments to seller credits as inspections are completed.

A final comment toward the Colorado Real Estate market is that many of our clients who have invested in a home to live or rent out have enjoyed growing home values throughout the process. In fact, most all of our buyers after 6 months have accumulated between 5-20% on their home values. The statement is not guaranteed but the fact remains that home buyers around Colorado have enjoyed appreciation along with their home purchases.

If you would like top-notch personal service or are unhappy with your current lender, feel free to call or email and we will respond promptly.

Colorado VA Home Loan

Department of VA

Colorado VA Home Loans

The Colorado VA home loan is an excellent loan. Eligible Veterans, active duty members, and often reserve members of the military can get financing with as little as 0% down. We at Colorado Lenders are big fans of the VA home loan and are versed in the process used to obtain the loan.

Another advantage we have out here in Colorado is our local VA office. They are knowledgeable and organized and have proven time and time again to provide us vital information throughout the loan process.

VA home loans also have lower interest rates when compared to conventional financing, making the loan one of the best in the industry. We have helped veterans obtain financing to buy a home or cash-out of their current mortgage allowing for expensive debt to be consolidated into one home loan.

Borrowers have been able to pay down credit cards, car loans, installment loans and other types of loans often resulting in an improved credit score.

The VA loan can also be used more than once at the same time despite what people may think. The trick depends on the remaining “entitlement amount”. If a Veteran has, for example, a 250k loan and has 150k remaining on his entitlement amount and decides to move into a nicer home, he or she can borrower the 150k to purchase the new home and then must bring an additional 25% of the remaining balance to the table.

For example, if the new home costs 300k, you take the 150k off the purchase price and then are responsible for 25% of the remaining 150k or 37.5k. The borrower is required to move into the new home using this method.

Contact Colorado Lenders today to chat about your Colorado VA home loan options.

Direct 303-578-9202

Colorado Property Investment

Colorado Property Investment.

Colorado Property Investment Strategy

In current times, Colorado is an amazing place to invest in Real Estate. We are mortgage lenders and do not have the authority to suggest how, when or why to invest in Real Estate. However, our staff has funded many investment properties in the past and have picked up on some interesting strategies over the years. Again, I cannot stress enough that property investing is a personal endeavour and strategies vary from person to person and no one strategy is failsafe.

With that said, let me suggest a particular strategy that, if executed correctly, could create long-term wealth with a reasonable amount of risk.

Take an example. Imagine you buy a piece of Colorado Real estate for 300k. Most investment property loans require between 20-25% down. The down payment is usually the biggest obstacle for a real estate investor. In this scenario, 25%  would be 75k, a sizable amount of money for most. There are “other” suggested ways to buy investment properties with “no money down” but they are often flawed. The most proven and, obviously, more difficult way to do it is to save up that down payment!

Suggest that you have the down payment money saved. Remember, the down payment money for an investment property cannot be gifted from a family member like a primary residence purchase can so be sure to have the money in your bank account for at least 3 months prior to beginning the loan.

This strategy also requires more discipline than most investments. The idea is to put the loan term at 15 years instead of 30 years. This ensures much more principal is being paid every month when compared to a 30-year loan. Next, the idea is to “overpay” the 15-year loan schedule. The normal payment without taxes and insurance would be around $1,664.30. The next step would be to pay an additional 1k per month on top of the payment to further reduce the principal of the loan. If the full 15-year payment + the 1k extra per month was paid for the entire life of the loan, the loan would be paid in full in less than 8 years. From the day the last payment is made, the property then turns from a 2664.20/month liability into a 2k/month cash-flow producing property.

The idea of this strategy is to acquire between 3-10 of these properties over the next 3-10 years. With this strategy, an investor could potentially create a wealth-producing machine which would produce between 6-20k per month depending on the number of properties. Once the properties are paid off, the cash-flow remains until they are sold. Appreciation should also be factored into the strategy but for the sake of the philosophy of the investments, the cash-flow is what is most important because it does not end as long as the properties are managed correctly.

Though this strategy requires a great deal of patience and delayed gratification, it can be done, and if done properly, can set an investor up for an early retirement.

To buy an investment property or to inquire about any type of financing questions, contact Colorado Lenders, Inc today!

Happy investing!