Finance Your Home

The Home Mortgage Process in Denver, Colorado

Most home buyers in the United States create a mortgage when they purchase a home. This creation of a mortgage ( home loan, financing package) is an extremely important part of the home buying process. The good news is that if you have not created a home loan in recent years, it has become a much easier. The advantages of high speed communication makes processing a home loan easier and faster. And with financing information readily available on the WEB, the consumer has the opportunity to be well informed in a competitive environment. However, before you jump on the WEB to secure your loan the easy way, there are some things you need to know.

The decision to buy a particular home is subject to three things: Finding the right home ( I can help you with this), the amount you intend to invest as a down payment, and the amount you intend to pay each month to pay off your mortgage. Use the mortgage calculator to determine the amount of payment that fits your budget. Click on to determine the approximate market interest rates. But wait! Before you rush off to calculate your mortgage payment there is more you should know.

If you an make a down payment of 20% or more of your targeted purchase price, you will avoid paying mortgage insurance, thereby lowering your monthly payment. ( You can still pass on mortgage insurance by packaging a First and Second mortgage and probably still have lower payment than you would with mortgage insurance, but that calls for conversation. So call me.)

Don’t forget property taxes and hazard insurance. Most lenders collect these funds monthly and pay the county taxes and insurance company once a year. Property taxes in the Denver Metroplex vary from .75% of the property value yearly (divided by 12) to 1.20% depending on the county you desire to live. ( There are 6 counties in the Metroplex.) Hazard or Homeowners insurance is the insurance you must carry to protect yourself against loss because of fire, wind, burglary, and etc. The approximate cost in the Denver area is .35% of the sale price. ( Again, divide by 12 for the monthly amount.)

The maximum amount of mortgage payment allowed by most loan guidelines is 28% of your gross monthly income. Remember that your payment must include principle, interest, taxes, and insurance. In addition, your total installment debt, including your mortgage payment, cannot exceed 36% of your total gross monthly income. Such things as automobile payments, credit card debt, and student loans would be included in you total installment debt. In some cases, lenders will exceed the above ratios if the credit is very good or the down payment exceeds 25% of the purchase price.

If you are about to apply for a home loan don’t make any large purchases such as automobiles or boats until after the you have closed on your home. Changes in credit status can disqualify you from receiving your loan.

Don’t forget cash for closing cost, usually about 2-4 % of the loan amount.

All lenders offer pre-qualifying for you home loan This is old hat. Today you can make application for a home loan and have have an approval in less that 14 days, and in most cases 3-5 days. Of course, the final loan approval will be subject to a property appraisal, but you can get the paper part complete before you even look at a home. Believe me when I tell you that an pre-approved loan will make your home purchase easier and faster, and strengthen your negotiating position.  And you can do everything by phone, fax, and the WEB.

Now, a caution. In spite of the fact that you can obtain loans via the WEB, I recommend you shop on the WEB, and buy from a local lender. By working with a lender I have a long term relationship with you can usually obtain a competitive rate with less up-front fees. Is is one of the hidden advantages of working with an experienced Realtor, and I urge you to take advantage of my relationships for your benefit.

There is much more to know about mortgages loans and how to get the best loan for you. Click here to find out more e-mail me your questions and I’ll get back to you.