Loan Programs
Yellowstone offers all types of residential financing in Colorado, so let me explain the options available to you.
For the most part, these descriptions apply equally to purchase loans or refinances.
- FHA
- FHA 203(k)
- Conventional Loans
- Investment Property Loans
- Construction Loans
FHA
This government insured loan program is popular to homebuyers and homeowners alike (for refinancing).
- 3% down payments (3.5% after Jan 1, 2009)
- lower credit scores acceptable
- first time buyers may be able to obtain down payment assistance
- FHA loan limits in metro Denver are $362000 and $406250
FHA 203(k)
This is an FHA rehabilitation loan to enable a buyer or owner of their personal residence to finance the purchase price plus up to $35,000 in remodeling costs. On purchases, buyers can put as little as 3% down on the price plus cost total. It is a great way to get minimum down payment financing on a home that needs a little work, or if you simply want to improve a property to right when you buy it. Remember the property will still need to appraise for at least the package price as if the improvements had already been done. The rehab money is escrowed after closing and you can access the funds to pay for the improvements.
It is not as complicated as it might sound, so give me a call if you have questions.
CONVENTIONAL LOANS
As a general rule these loans become the best deal when a borrower has at least 10% to put down and they have credit scores at least in the 640-660 range. As you may know, if you put less than 20% down on a purchase, or have less than 20% equity for a refinance, you (the borrower) will pay some extra costs for mortgage insurance. We used to have second mortgages in plenty that were a tool to save a little money by not having mortgage insurance, but they have almost all gone away, the remaining being available to only the higher credit score borrowers.
Conventional loans use the borrower’s credit scores to determine the interest rate charged. These days if you have a score less than 720, you’ll pay slightly higher rate and, of course, the lower the score, the bigger the adjustment upward on the rate.
We can easily analyze the best options for you, whether on the phone or by email.
INVESTMENT PROPERTY LOANS
Considering buying a rental? Interested in a second home here in Colorado? We offer many competitive loan products designed around these transactions. Remember that for rental properties, down payments are practically at 20% or more (lower down payments are available, but they cost even more) and you should budget for rates at about one half of a percent higher than personal residences. Second homes with 10% or more down have rates the same as personal residences.
CONSTRUCTION LOANS
Have some land in Colorado and you dream about building a house on it? There is financing available to purchase raw land or building lots. There is financing available to build a house or to buy the land and build the house at the same time. However, the lending climate in these loans has changed dramatically in the last year making it harder to qualify—both for the borrower and for the land / house situation.
If you want to consider any of the above, please call and we can discuss your options.
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