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!

 

 

The Colorado Real Estate Market

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.

Direct: 303-578-9202

Currently Renting: Why Not Own a Colorado Home?

Today’s expensive Colorado rental market along with historically low interest rates and home prices on the rise makes the benefit of owning a Colorado home quite practical. Whether you are ready to buy tomorrow or need some time to save up a down payment and/or establish credit and a job history, it may be well worth it to give your local Mortgage Broker a call.

Think you cannot afford to enter the home buying market?

According to Zillow, renters in the Denver market use on average 35% of their monthly income on housing, as opposed to homeowners who allocate 21% of their monthly earnings to their mortgage payments.  Data shows that it is actually less expensive to own a home vs. rent a home right now in Denver! While these numbers are revealing, we can make our own comparisons as well. For instance, let’s assume that an average three-bedroom apartment in Denver goes for $1,800 a month, which is quite realistic right now. And then suggest you would like to buy a $250,000 home instead write another rent check. An FHA loan requires a minimum of 3.5% down and as well as an upfront mortgage insurance premium (UFMIP) of $4,375. Given a rate of 3.875% for a 30-year loan with insurance of $125, monthly taxes of $150, and monthly mortgage insurance of $170.89, your total monthly mortgage payment would run about $1,600.19* You could potentially save $200 a month while owning a home amidst a potentially appreciating market.

Benefits of home ownership        

Buying a house could be one of the best decisions you could make for your financial future. Along with building equity and potentially saving money on rent, you may gain tax advantages by deducting your mortgage insurance from your federal taxes. There is no place like home especially when nobody can raise the rent on you! Colorado Lenders Inc. is a local company with competitive rates, friendly service, and uncompromising integrity. To get started, give us a call at 303-578-9202 and begin your journey towards home ownership.

* Payment assumes an FHA loan with a purchase price of $250,000.00, 3.5% down at a rate of $3.875, and taxes and insurance of $270/monthly. Currently FHA loans carry an upfront cost of 1.75% amounting to $4221.88 and a monthly insurance cost of .85% or $170.89. For the purpose of this example, credit is assumed to be above 680. All loans are subject to an underwriters approval.