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Buying
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BUYING YOUR HOME

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Buying a home is one of life’s most exhilarating & adventurous experiences, as well as one of the most challenging, too. Preparation is the key to enjoying and understanding the whole process. Gather up as much information as possible:  speak to a lender about loan qualification & loan programs,  research neighborhood values & trends, and find a Realtor who will best represent you.  Then you can use my tools (links below) to see how much your monthly payment will be, how much you can afford, and options available for down payment assistance programs. From the initial planning stage to the selection of the home that’s ideal for you; below please find some essential steps for buying your new home:

Planning Out the Purchase

When buying a home, it is best to square up the preliminary planning needed for a home purchase.

1)   Take a look at your finances and credit history, and determine (on your own) how much home you think you can afford. Straighten out any errors or disputed items now, rather than during the loan approval time frame.

2)   Obtain financing from an approved lender. This means you need to get pre-qualified or better yet, pre-approved. Also, research what loan option works best for you.

3)   Narrow down your criteria for the type of home you are looking for. Write down a wish list which categorizes features, such as Essential, Nice if Included, Undesired, Don’t want. Remember, that in the end, every home purchase is a compromise & every home has its pros and cons.

4)   Start a savings plan (if you don’t already have one) for the down payment and closing costs of home purchase.

5)   Find a Realtor you are comfortable with. One who listens to your wants/needs and will appropriate enough time to work with you.  Provide your home search criteria to Realtor.

6)   Start looking for your home. Become an educated buyer. Research neighborhoods. Visit Open Houses because it will give you an idea of the market and evaluate real estate agents along the way.

7)   If you are relocating, subscribe to the local newspaper and read the local news and classified ads to get a feeling for the different neighborhoods.

8)   Make an offer on a home, possibly a counteroffer, and close on the deal.

Mortgage

Mortgage Calculator

Selling Price$Down Payment$
Interest Rate%Years
Monthly Payment$Change any combination of fields to calculate.

To see various scenarios for loans, payments, interest rates, etc….CLICK HERE !

Finding the right mortgage is just as important as finding the right house. You must find one that allows you an affordable monthly payment. There are many options available such as loans that are 100% of purchase price or Adjustable Rate Mortgages that offer a lower interest rate for the first few years. The challenge is finding one that fits you. You’ll need to understand:

  • Components of a mortgage loan
  • Fixed-rate mortgages
  • Adjustable rate mortgages
  • Balloon loans
  • Government sponsored Loan programs
  • First Time Home Buyer programs
  • Basic Factors of a Mortgage Loan

A mortgage is an instrument that pledges your home as the lenders security for repayment of the loan. The lender (bank) agrees to hold the title or deed to your property (or in some states, to hold a lien on your title or deed) until you pay back the mortgage loan plus interest. The following are the basic factors of a mortgage loan:

1)   Mortgage Amount and Term: The mortgage amount is the amount of money you borrow from a lender to pay for your house. The term is the number of years over which you have to pay back the amount you borrow. Typically, the length of your mortgage repayment period will affect your monthly mortgage payment. Most popular among mortgage terms is the 30 year loan. If you can afford higher payments and would like to pay off the loan in a shorter time, you can choose a 15 or 20 year loan.

2)   Amortization is the payment of the loan through periodic installments of principal and interest. During the first few years, most of your payments will be used toward the interest you owe. During the final years of your loan, your payments will be applied to the remaining principal.

Important Mortgage Terms

Adjustable Rate Mortgage (ARM)

A mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap.

Balloon Payment (Balloon Mortgage)

A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower (also called balloon mortgage).

Fixed-Rate Loan (Fixed-Rate Mortgage)

A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.

Closing Costs (Settlement Costs)

Customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by geographic location and are typically detailed to the borrower after submission of a loan application.

Debt-to-Income Ratio

A comparison of gross income to housing and non-housing expenses; with the U.S. Federal Housing Administration, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income.

Discount Point

Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.

Down Payment

The portion of a home’s purchase price that is paid in cash and is not part of the mortgage loan.

Below are some Down Payment Assistance Programs Available:

MMAP Down Payment Assistance Program

 

 

 

 

 

Dave Hirsch

 

Buyer Representation: The Benefits

 

CO Rules and Regulations, National Association of Realtors Code of Ethics and the City, State and Federal Laws of Agency requires that Realtors inform and disclose to all Buyers Agency representation rules and laws.  If you decide to work directly with Listing Agent as a Buyer, it is important to know that the Agency agreement amongst parties involved most likely will change to Transaction Broker status.  When this occurs, the Listing Agent no longer represents or is an advocate for the Seller, nor the Buyer.  Simply put, the Listing Agent becomes more like a referee rather than a coach; a facilitator to the transaction.   The Transaction Brokerage Agency occurs after the Change of Status form is signed; which may happen before or after the agreed upon offer.   The problem for the Buyer is that when their offer is submitted, the Listing Agent is working solely for the Seller and not the Buyer, unless the Change of Status form has been executed.  And if the Listing Agent is working for Seller, the Buyer stands to lose in negotiations because their best interests are not being regarded.   Therefore, it is highly recommended that a Buyer utilizes a Realtor for representation.   Plus, the Buyer does not have to pay their Realtor for these services; as the Seller will pay both agents.

 

As a Buyer’s Agent, I will provide the following Benefits:

  • Focus my full attention to the Buyer’s interests & needs
  • Buyer can talk freely, everything said is held in confidence; as it’s my Fiduciary responsibility
  • Suggest alternative home solutions, increasing the supply of appropriate properties
  • Will provide first opportunity to view new listings always given to those in Buyer’s Agency
  • OKAY for Realtor to give advice accompanied by facts to assist in making an objective evaluation of the property’s positive and negative aspects
  • Illustrate price values to Buyer by comparing competing, closed properties, and sales trends
  • Educate the Buyer by planning a negotiating strategy for making offer
  • Suggest procedures that will strengthen the Buyer’s negotiating position
  • Contract will be written with Buyer protective clauses included (ie. Contingencies)
  • Financing options / alternatives will be suggested; having the Buyer’s best interest in mind
  • Negotiate offer on behalf of the Buyer
  • Continue assistance to the Buyer during negotiation, by searching for other appropriate properties for the Buyer, to enhance the Buyer’s negotiating position
  • Strengthen the Buyer’s negotiating position by informing about past offers and any other information about the Sellers that would aid the Buyer
  • Share all information about the seller unless the Buyer agrees otherwise, any information that would aid Buyer’s position must be disclosed
  • Follow through after the purchase contract has been negotiated attempting to solve problems to Buyer’s satisfaction
  • Be available to Buyer after closing; keeping all information confidential and provide assistance and referrals

 

 

Rent Vs. Buy

With the current low interest rates, owning a home is more affordable than you may think.  Find out how much you can save by owning your home by filling out the Rent Vs. Buy Calculator.  (CLICK HERE)

 

See How Much You Can Afford.  (CLICK HERE)

 

Need Help with your Down Payment?

State and local governments offer programs that can help.

CHFA Down Payment Assistance  – CO Housing & Finance Authority (CLICK HERE)

(HOAP) Aurora’s Home Ownership Assistance Program  (CLICK HERE)

Arapahoe County Home Buyer Assistance Program  (CLICK HERE)

 

Government Loans & Programs

The Federal Housing Administration (FHA), the U.S. Dept. of Veterans Affairs (VA) and the Rural Housing Services (RHS) are three agencies that offer government-insured loans. To obtain these loans, you apply through a lender that is approved to handle them. All of these agencies require certain criteria to be met.

1)   FHA Loans FHA offers 15 & 30 year fixed loans as well as 1 Year Adjustable Rate Mortgages. The down payment is 3% to 5% of the FHA appraisal value or the purchase price. FHA has a maximum loan limit that varies depending on average cost of housing in a given county. FHA is a little more lenient with borrowers FICO credit scores and have higher qualifying income ratios.

2)   VA Loans- VA loans are for qualified veterans who are looking to buy a house with no down payment. The maximum loan amount is $203,000. The qualification guidelines for VA loans are a little more flexible than FHA or conventional loans. To be eligible, please contact your nearest regional VA office.

3)   RHS Loans- The Rural Housing Service, a branch of the U.S. Department of Agriculture, offers low-interest rate home ownership loans with no down payment guidelines to low and moderate low income borrowers who live in rural areas or small towns.

4)   CHFA- Colorado Housing and Finance Authority offers 30 year loan programs to first time and non-first time home buyers. The program also offers 2nd mortgages to cover down payment and closing costs. A home buyer educational class is required.

Email me at PMBRKR@aol.com for an Free Exclusive Buyers Guide to assist you with your search !  Get your FREE Home Buyers Guide by the PDF link below:

 

FOR INVESTORS – CLICK HERE for

Real Estate Investment Software for Free!

 

 

Click the link below to get your Home Buyer’s Guide-

 

Selling Price$Down Payment$
Interest Rate%Years
Monthly Payment$Change any combination of fields to calculate.

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