By Special Contributor: Michelle Bowles, Mortgage Banker with Peoples Bank, Colorado Springs, Colorado
Is anyone actually getting approved for a mortgage loan these days? You may have heard that getting an approval has recently become next to impossible. Well that’s just not true.
The mortgage meltdown crisis with its resulting doom and gloom has understandably left real estate buyers thinking, “Wow, what in the world do we do now?” In this and other articles in this series, I’ll attempt to moderate a factual discussion of both the market and mortgage programs that are still helping Colorado home buyers move into their own homes every day. First off, loans for Denver and Colorado Springs homes are still being approved and homes are still being closed. Yes, the road can be a longer one these days, but I think that the most important thing for you as a mortgage loan consumer is to remember is that you really need to find a trusted loan advisor. Having the right person on your side really does make all the difference. That advisor must have access to virtually all the loan programs available in Colorado instead of just a small cross-section of loan products. Another key in having a trusted advisor is gaining an ally who will tell you the truth and not waste your time, get your hopes up with unrealistic expectations, or crush them with negativity. Many mortgage bankers seem to make you feel as though every conversation you are having with them is some ploy to find out all of your private financial information in order to use that information to “get” you to buy more real estate than you can afford or are comfortable with. That is simply not the way I work when serving your mortgage needs. I take great care in helping my clients every step of the way; helping then find and secure the Colorado mortgage loan that is right for them.
Not everything is as positive as the government tries to make it sound when touting all the programs they are releasing to “help” people hold onto real estate. Conversely, not everything in Colorado mortgage loans is dire either. So what is a person to think? Government program this, Fannie Mae that? Who is Freddie Mac anyway? Misinformation, fear and uncertainty are everywhere. No wonder everyone is so confused. For a long time we found ourselves in the type of real estate loan environment that I love to categorize as “fog a mirror, get a loan!” Well, that was never a sound business practice to begin with. In truth, the artificial good times were fueled by the same regulators now responsible to drive policies to the other extreme – the extreme of inflexibility. I believe that what we all need right now is solid and factual information about the mortgage loan environment in Colorado Springs, in other words: what you can expect during the home buying process in today’s lending environment. Let’s start with a few loan programs that many Colorado home buyers are finding suitable to their financial needs right now.
• If you are a first time home buyer there are two great programs for you. One is the El Paso County Colorado Bond. This program offers a grant of 3% on the home you purchase if you meet their criteria. All of these loans are serviced by Bank of America. However, you can go to a variety of different mortgage banks around the city to apply and get your loan. Funds are available on a first-come, first-serve basis and can be done with or without down payment assistance. This means you do not need any money down for this program. This program is subject to income and purchase price limits and you need at least a 620 credit score. Peoples Mortgage (the company I represent) offers this innovative loan.
• The Colorado Housing and Finance Authority also provides loan programs suitable for many Colorado home buyers. You can check out the CHFA website at www.chfainfo.com. CHFA loans are also subject to income and purchase price limitations and you will also be required to take free home buyers education in order to qualify. You need at least a 580 credit score and $1000 of your own funds to put towards your purchase. CHFA has a list of all participating lenders listed on their website as well.
I ask that you not fall for the rumors circulating around Colorado about both of these programs. One example is a rumor that you have to pay a penalty or tax if you sell the mortgaged real estate before you have lived there for 9 years. This is simply misinformation. For the refreshing facts, please call me in person. Yes, a recapture tax may apply in some situations. Nevertheless, my job is to help you weigh all of the relevant factors and information to assist you making the best decision for your particular situation. Each borrower and each piece of real estate is different. Please educate yourself thoroughly by calling your trusted advisor before drawing your own conclusions.
A Veterans Administration home loan is another outstanding program that frequently gets a bad rap. What the rumors say: “Oh, they take twice as long to close, they have appraisal problems. What about the high funding fee?” Again, the rumors are neither correct nor constructive. A more sophisticated way to understand whether or not a loan truly benefits you is to evaluate all aspects of a loan, in total. For example, the funding fee may well be offset by other advantages offered by this type of loan. Speaking of in total, did you know that VA loans have more benefits than any other loan offered by any other agency? If the person you are getting advice from tells you NO to a VA or they don’t offer them at all, I strongly encourage you to get a second opinion. VA loans are a great tool for veteran borrowers, active duty, discharged, or retired alike. National Guard or Reserves can also be eligible. Best of all, you do not need to go directly through the VA for this loan, in fact, VA does not lend money. They simply guarantee the loan. You need a 620 credit score and no money down for the VA program. The VA continues to offer jumbo loans for amounts greater than $417,000.
That’s all for this installment, please check back in the near future for more info on other real estate loan programs. Until then, continue to research homes on this site.
And please don’t hesitate to give me a call with any questions.
Michelle Bowles, Mortgage Banker
(719) 492-8858 Phone