Have you dreamed about owning your own home in Colorado? Colorado Springs Mortgage will help you find the right home mortgage loan to help make those dreams come true. We offer a full range of home mortgage loans and will find a custom Colorado mortgage that fits your needs and financial situation. Our Colorado mortgage specialists serve the Colorado Springs and El Paso county areas, specializing in Colorado mortgages tailored to meet your needs.
The decision to purchase a home is one of the largest commitments you will make in your life. For the majority of people looking to purchase a house, financial considerations can be stressful. Home mortgage loans are available to most. Choosing which option makes most sense for your individual situation can seem a difficult task, since there are many varieties of home mortgage loans.
When looking for a home mortgage loan, you should know that there are essentially two types: fixed-rate loans and adjustable-rate loans (ARMs). Fixed-rated loans are very predictable when the contract is made, the rate of interest to be paid on the loan is calculated and locked in. The interest paid on adjustable-rate loans over the years changes with the interest rate, so when rates are low, you pay less each month, but when rates are high, you will pay more accordingly. There are variations to suit the specific needs of individuals, which your home mortgage loan consultant will discuss with you in greater detail. Colorado Springs Mortgage will explain the fees involved in buying a home, for such necessary tasks as appraisal, closing and settlement. We are always on call to help you make the best choices for today, and for the future.
The right type of mortgage for you depends on many different factors, such as your personal financial situation or how long you are staying in the home. The best way to find the correct answer is to discuss your finances, your goals and financial prospects, and your preferences with a mortgage professional.
The most common type of mortgage program is one where your monthly payments with interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable. Fixed rate loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15-year and 30-year mortgages. There are also "biweekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.)
A few options are available to fit your individual needs and your risk tolerance with the various market instruments. Different indexes are available for both purchases and refinances. Choosing an ARM with an index that reacts quickly lets you take full advantage of falling interest rates. An index that lags behind the market lets you take advantage of lower rates after market rates have started to adjust upward.
A common buy down loan is the 2-1 buy down. In the past, for a buyer to secure a 2-1 buy down they would pay 3 points above current market points in order to pay a below market interest rate during the first two years of the loan. At the end of the two years, they would then pay the old market rate for the remaining term.
Another common buy down is the 3-2-1 buy down which works much in the same way as the 2-1 buy down, with the exception of the starting interest rate being 3% below the note rate. Another variation is the flex fixed buy down program that increase at six month intervals rather than annual intervals.
Balloon loans are short-term mortgages that have some features of a fixed rate mortgage. The loans provide a level payment feature during the term of the loan, but opposed to the 30 year fixed-rate mortgage, balloon loans do not fully amortize over the original term. Balloon loans can have many types of maturities, but most balloons that are first mortgages have a term of 5 to 7 years. At the end of the loan term, there is still a remaining principal loan balance and the mortgage company generally requires that the loan be paid in full, which can be accomplished by refinancing. Many companies have other options such as a conversion feature at the end of the term. For example, the loan may convert to a 30 year fixed loan at the thirty-year market rate plus 3/8 of a percentage point. Your conversion can be guaranteed based on certain criteria such as having made your last 24 payments on time.
First time homebuyers may have the income and credit stability to qualify for home mortgages; however, they may not have the necessary funds for the down payments and/or closing costs. Gift funds are available as grants up to $40,000 based on the final sale prices of the homes and the needs of the buyers. The program funds are free monies offered by the program to qualified homebuyers, requiring no repayments, no silent second mortgages and no recapture penalties. The funds are offered towards the purchase of seller-participating homes anywhere in the United States, with no income limitations and no geographical restrictions. The money given to the buyer is a true gift.
Gift money can come from relatives, employers and nonprofit organizations. It can't come directly from sellers. But sellers can contribute money to nonprofits that then pass along the money in the form of gifts to the homebuyer.
A buyer qualifies for the Down Payment Assistance Program by qualifying for any owner-occupied home loan from a lender who accepts grant funds from a nonprofit organization, and by purchasing a participating home from a seller who agrees to make a contribution to the program after the home closes. Buyers may achieve potential tax benefits, appreciation of the property value, build equity, buy a home at lower cost now than at sometime in the future, receive free grants for up-front home buying expenses, and just enjoy that good feeling of home ownership. The availability of a down payment assistance grant can increase their pool of potential buyers, and their bottom-line net is comparable to a traditional loan.