Native Denver Area Real Estate Agent & Relocation Specialist RE/MAX Alliance Arvada - Anthony Rael, Denver Realtor

Home Mortgages - How Much Can You Afford? --- www.anthonyrael.realtor


FINANCING OPTIONS...QUALIFYING FOR A VA HOME LOAN

Financing options can be overwhelming to all of us. There's simply no way to know about all the available options, much less decide which one is best for you long-term. You can choose any lender, but if you want to ensure a worry-free closing, I have access to a team of first-class mortgage experts who always ensure that my customers not only understand what mortgage options are available, but more importantly, receive the best possible rates and terms.

  What are VA Loans and Do I Qualify?
  Mortgage Options
 Key Components to Most Adjustable Rate Mortgages (ARM)
  What Your Monthly Mortgage Payment Consists of
 Questions to Ask Lenders
 How much can I afford?
  What are the current "average" mortgage rates this week?
 

Denver Area Mortgage Lenders
  Home Mortgage Alliance - Tiffany Swisher - (303) 327-6689
  Fairway Independent Mortgage - Kari Abt - (303) 489-1205

 Mortgage Options & Loan Types
30-year conventional fixed rate loan - benefits include:
  • Monthly payments for principle and interest remain the same over the life of the loan
  • Lower monthly payments when amortized over a 30-year payment period.
10, 15 or 20-year conventional fixed rate loans - Benefits include:
  • Monthly payments of principle and interest remain the same over the life of the loan
  • Substantial savings of interest over the life of the loan
  • Payments are approximately 25-30% higher when amortized over a shorter period of time.
No-Point/Zero Closing Cost loan - Benefits include:
  • Less cash needed at closing. The interest rate will usually be ? to ? of a percent higher when compared to loans that have points to pay at closing.
7-year fixed rate balloon w/ 30-year amortization - Benefits include:
  • Slightly lower rate and/or less fees than the conventional 30-year fixed rate loan.
  • Payment of principle and interest remains the same over the 7-year period of time (at the end of 7 years, you will need to pay off the remaining balance with either a lump sum of cash or re-finance the remaining loan amount).
Adjustable Rate Mortgages (ARM) - There are many options with ARMs; the most popular tends to be the 1-year ARM with a 30-year amortization schedule. Benefits include:
  • Lower interest rate for the 1st year
  • Easier to qualify for the loan amount
  • You can qualify for a larger loan amount
  • A year ARM offers the ability to adjust downward at the 1 year anniversary of your loan.
  • I am not a big fan of ARM's because interest rates have been at or near historical levels for the past five years, so an ARM just doesn't make sense.  Anyone applying for this loan type needs to be certain that they understand what the future interest rate adjustments are or you can get into big trouble.
80/10/10 Conventional Loans
  • a loan program that consists of an 80% first mortgage + a 10% second mortgage + a 10% down payment. In this case, since there is no mortgage insurance required, the buyer will save the monthly premium.
  • This loan type (or variations of it) was extremely popular during the past 3-5 years. The primary purpose of this loan is to avoid paying PMI (private mortgage insurance) for buyers who were unable to put down 20%.
  • It is always best to consult with a mortgage broker on the best type of loan program that best meets your needs and does not over-extend your financial situation.


 

 Key Components to Most Adjustable Rate Mortgages (ARM):
  • Index Rate - the rate to which the interest rate on an adjustable rate loan is tied. One of the more popular indexes used is the 1-year U.S. Treasury bill.
  • Margin - the amount added to the index rate that represents the lender's cost of doing business.
  • Interest Rate Cap Per Adjustment - the maximum amount a borrower's interest rate may increase or decrease at the time of adjustment..
  • Life Cap - this is the ceiling that the note rate cannot exceed over the life of the loan.
  • Amortization - a period of time in which gradual repayment of debt occurs by means of systematic payments of principle and/or interest. At the end of the time period the balance is zero.

 
 What Your Monthly Mortgage Payment Consists of:
  • Principle balance: this represents the money you originally borrowed and are paying back over the life of the loan.
  • Interest on loan amount.
  • Real estate taxes: normally 1/12 of the most recent tax bill.
  • Insurance (Home Owners): normally 1/12 of the yearly policy amount.
  • Private Mortgage Insurance (PMI) - Some borrowers who have less than 20% down are required to pay PMI.
  • Assessments (if any, condo, townhome, single family home) - depending on the type of dwelling, you may or may not be required to pay assessments.
 
 Questions to Ask Lenders
  • Based on your situation, what looks like the best program for me & why?
  • What is the projected time for processing and closing a loan?
  • Who services your loans?
  • If PMI (Private Mortgage Insurance) is required, when and how does it go away?
  • What about your rates, terms, fees, etc - are they negotiable?
  • Are there any special underwriting guidelines you follow?
  • What if rates go down during the ?lock-in? period? 
  • What do you need  to get a loan approved?
  • Are there any "junk fees" or administrative/doc prep fees?  If some are identified, can I have it in writing that these will be removed?  If not, I will find another lender.

Need to get pre-qualified for a Mortgage Loan?
Call Anthony Rael at 303.520.3179 or one of my preferred mortgage loan brokers below who can help you
get pre-qualified for a Mortgage Loan.  This is a vital first step in preparing to purchase a property.

 

 


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Anthony Rael  |  REMAX Alliance - Arvada  |  5440 Ward Rd., #110  |  Arvada, Colorado 80002  |  303.520.3179
Colorado Association of REALTORS Media Spokesperson for the Denver Region Quarterly Real Estate Market Updates
Denver Metro Association of REALTORS - Chairman of the Denver Metro Area Market Trends Committee

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