Deano Makowsky - 303.255.4381
A Comprehensive Guide to Buying and Selling a Home
Colorado Real Estate
Selling a home
COLORADO REAL ESTATE AGENT

TYPES OF LOANS

It is important for you to choose the loan that is best for you. You will need to select the one that best fits your situation. In order to obtain a loan for a purchase of a home you will be required to give a mortgage on the home to a lender as security for repayment of the loan. The lender agrees to hold the title or deed to your property until you have paid back the loan, plus intrest. Below I will list several loan and mortgage options that are available.

Conforming Loans-
These loans follow the terms and conditions set forth by Fannie Mae and Freddie Mac. These are two private , congressionally chartered companies that buy mortgage loans from lenders, therby ensuring that mortgage funds are available at all times in all locations around the country. Those loans that don't fit into the limits, may have a higher interest rate, or may have a slightly different underwriting requirement, paticularly in regard to the down payment needed.

Fixed-Rate Mortgages-
If you are planning to stay in the home a long period of time or don't want to play chance with the interest market, than this maybe the loan for you. Your payments will be the same over the life of the loan. There are several fixed-rate mortgages available, with 15, 20, and 30 year terms being the most common. However these types of mortages may require larger monthly payments or a larger down payment.

Adjustable-Rate Mortgages (ARMs)-
ARMs often times intially offer lower interest rates than that of a fixed-rate mortgage. You are also many times able to qaulify for a larger loan. This is attractive to those who know that their income will increase in the future or for those who don't plan on staying in the home for an extended period of time. However the interest rates will adjust to keep in line with the changing market rates. Potentially you may have higher monthly payments if the interest rates climb.

Goverment Loan and Programs-
The Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the Rural Housing Service (RHS) are three agencies that offer goverment-insured loans. Your loan application must fit the requirements demanded by these agencies.

FHA Loans-
You may be able to purchase a home with a very low down payment (3% to 5% of the FHA appraised value or the purchase price, whichever is lower).However FHA mortgages have a maximum loan limit that varies per region depending on the average cost of housing.

VA Loans-
These types of loans allows the qualified Veteran to buy a home costing up to $203,000 with no down payment, and without limit of the location of the property.You may also take a loan for 100% of the purchase price, plus a funding fee that is normally 2% for first time buyers. However you are required to occupy the residence, and the loan is issued in the name of the Veteran, and /or spouse or with another Veteran only.

RHS Loans-
The Rural Housing Service offers low-interest rate loans with no down payment to low and moderate income people who live in rural areas or small towns.

State and Local Programs-
Many states have assistance programs for first time buyers that help them qualify for mortgages.They may offer low down payments or low interest rates for those individuals that meet the guidelines of the criteria. Some states also offer programs that assist the first time buyer with closing cost and down payment. Contact your lender or State Housing Authority to see if you meet the guidelines.

Ballon Loans-
These types of loans offer lower fixed interest rates for a shorter term, usally 5, 7, or 10 years. At the end of the short term, it will require you to pay off the outstanding balance with a lump sum payment, or you will need to refinance. The advantage to this type of loan, is that it will let you apply for a larger loan and will allow for lower payments intially. However there is a chance you will have to pay a fee for refinancing the loan to the current interest rate.

Buyer's Guide
A step by step guide of
what is involved in buying a home.

Buyer's Criteria
Why Should I Use an Agent?
Buyer Cost Breakdown
Items Needed at Loan Application
Loan Application
Increase Your Purchasing Power
Obtaining the Down Payment
What to Avoid
Types of Loans
Mortgage Glossary of Terms
Services I Will Provide

Moving Guide
Packing Tips

 

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