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Good Neighbor Next Door Program – Colorado Springs October 21st, 2010

Patricia

Many Colorado Springs Residents are not aware of the Good Neighbor Next Door Program offered through the Department of Housing and Urban Development (HUD). Buyers that qualify for the program include full-time teachers, firefighters, police officers, and EMTs.

Buyers can choose from HUD homes (FHA insured foreclosures) in specific areas of Colorado Springs that are considered revitalization areas. Qualified buyers can purchase a HUD home for 50% of the appraised value! If the home needs work, buyers may be eligible for an FHA 203(k) Rehab Loan to assist them financially with needed repairs. Once the home is financed, the amount discounted off of the list price is recorded as a silent second (no payments and no interest) mortgage. The second mortgage is released once the home is sold, as long as the buyer met HUD’s required guidelines during the three year period. If the home appreciates, the buyer receives profit made on the sale of the home.

The home teachers, firefighters, and EMT’s purchase must be located in the area where they serve. Additionally, the buyers are required to live in the home as their primary residence for at least three years. HUD may require buyers pay back the amount that was discounted if they live in the home for less than three years.

HUD offers a FAQ on their website regarding the Good Neigbhor Next Door Program.

For further information on available Homes in Colorado Springs contact your Colorado Springs Realtor, Patricia Beck.

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Upcoming changes with FHA financing may impact home buyers December 9th, 2009

Patricia

Many home buyers in Colorado Springs obtain FHA financing for their home purchase and may be affected by the upcoming changes with FHA guidelines. FHA offers a low down payment requirement making it easier for many buyers to purchase a home; currently, home buyers can get into a home with 3.5% down. Although, the amount of the increase has not been disclosed, we can expect to see a higher down payment requirement for FHA financing.

It is not uncommon for sellers to cover buyer closing costs in this market and under the current FHA guidelines, sellers cannot provide more than 6% of the loan amount in concessions to the buyer. The percentage of allowed seller concessions may be reduced to 3% of the loan amount resulting in buyers having to come up with the remaining monies for their closing costs.

FHA borrowers have an additional 1.75% Mortgage Insurance Premium (MIP) added to their loan amount at closing. Buyers will likely see an increase in the MIP and monthly mortgage insurance as well. Update: The Upfront MIP is going to increase to 2.25%

If FHA increases their minimum FICO score requirement to 620 as expected, buyers with less than perfect credit may be impacted. Update: Buyers with a credit score below 580 will be have a higher down payment of 10%.

UPDATE 10/2010: FHA is making changes once again; details regarding the changes can be found on HUD.gov

The Upfront MIP is going to be reduced to 1% from 2.25%
The annual premium will adjust upward from .50% to .85% for buyers who put at least 5% down. For buyers who put less than 5% down, the annual premium increases fom .55% to .90%.

If you plan on purchasing a home in Colorado Springs using FHA financing, speak with your Colorado Springs Real Estate Agent and mortgage lender for more information.

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Colorado Springs Homes: Reverse Mortgages July 30th, 2009

Patricia

For seniors 62 and older, Reverse Mortgages may be a great option for gaining access to the equity in their home for additional income. No monthly mortgage payments are required and the equity pulled out of the home does not have to be paid back until the home is sold.

Unlike other loans, there are no credit score or income requirements to obtain a Reverse Mortgage. Reverse Mortgages allow homeowners to increase their monthly income or to utilize the equity in their home to purchase another home that fits their needs. Best of all, the income from a Reverse Mortgage is not taxed. With an FHA Reverse Mortgage, the borrower nor their children will inherit the debt since the Reverse Mortgage cannot exceed the value of the home.

For further information Homes in Colorado Springs contact your Colorado Springs Real Estate Agent, Patricia Beck.

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Energy-Efficient Mortgages available to VA buyers July 27th, 2009

Patricia

VA is offering Energy-Efficient Mortgages (EEM) to borrowers who are interested in making energy-efficient improvements to their home. New borrowers or current homeowners interested in re-financing can increase their loan amount to account for the Green improvements that will be made to the home.

Depending on how much the borrower’s mortgage payment is increased as a result of the EEM, the improvements made will need to reduce the cost of utilities in the home in order to be worthwhile. There are situations in which the EEM will require approval by the underwriter.

If $3,000 or less is wrapped into the loan for energy-efficient improvements, the borrower will need to have written estimates for each improvement to be completed. If the EEM is more than $3,000 but less than $6,000, borrowers will also need to demonstrate that the increase in their mortgage payment does not exceed the monthly savings in utilities. If the EEM is more than $6,000, the appraisal will have to support the new increase in the loan amount to be approved.

In many instances, the improvements may not be completed before closing so the borrower will have to document that the “Green” money is going to be placed into a separate account, to be used for energy-efficient improvements only. Energy-efficient appliances do not count. Energy-efficient improvements may include: Solar systems, Low-E windows, programmable thermostats, or insulation. Check with VA to find out if installing an energy-efficient furnace or water heater is observed as an improvement.

Wrapping the cost of energy-efficient improvements into the loan should not impact the veteran’s entitlement but may increase the VA funding fee.

Military Relocation

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For more information on Colorado Springs Real Estate or the Colorado Springs Area contact me or visit my website.

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Colorado Springs Real Estate- Assuming VA Loans July 27th, 2009

Patricia

One advantage of having a VA mortgage is that it is assumable. If the interest rates skyrocketed and a buyer wanted to assume the seller’s VA loan instead of obtaining a new loan with a high interest rate, it can be done with approval of VA. If the loan was originated before March 1, 1988, the seller would not need approval to transfer the loan.

If the assumer is a veteran, the seller has the ability to utilize the Certificate of Eligibility to purchase another property since the veteran has substituted his/her entitlement in place of the seller’s. If the assumer is not a veteran, the seller’s Certificate of Eligibility is still tied to the property and cannot be used.

The seller is also released from liability if the buyer who assumed the veteran’s loan misses mortgage payments. However, if the property forecloses, the veteran’s entitlement may not be restored.

Colorado Springs Real Estate Agent, Patricia Beck, providing real estate services to home buyers and sellers.

Military Relocation

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Colorado Springs Home Buyers, Prequalify May 1st, 2009

Patricia

Finding a home is an exciting process; although you may want to start looking at homes right away, it is very important to get prequalified first. The last thing you want to do is find a home you like only to find out that you do not qualify to buy it! Looking at homes you cannot afford is a waste of your time. Knowing how much house you can afford in advance will help you narrow down your search criteria to a specific price range.

There are many homes for sale in Colorado Springs and having a specified price range will help guide you to the right home. The prequalification process doesn’t take long and will speed up the loan process when you actually find the house you want to purchase. Many sellers require a pre-qualification or pre-approval letter from the buyer to accompany the contract offer so it is best to get this part of the buying process out of the way in advance.

There is always the chance you may discover that your credit needs work before you can qualify to purchase a home. If that is the case, you will need to take the appropriate measures to fix your credit before moving forward.

Colorado Springs Real Estate: Changes with CHFA April 29th, 2009

Patricia

Many home buyers in Colorado Springs that would like to buy a home but cannot afford the down payment choose to obtain down payment assistance from the Colorado Housing and Finance Authority (CHFA).

Formerly, borrowers were not required to make any payments on the money received for the down payment (Silent 2nd Mortgage) until they sold or refinanced their home. Now, home buyers who utilize CHFA, have to pay monthly payments on the money borrowed; there are some exceptions with those participating in the JumpStart Program.

Additionally, the maximum amount a buyer can borrow is 3% of the purchase price whereas the minimum down payment requirement for FHA is 3.5%. The JumpStart Program is another avenue where home buyers can borrow up to $6,000 to put toward their down payment or closing costs. Update: Since the tax credit has expired, the JumpStart Program is no longer available. Buyers should contact CHFA for more information.

Additional Reading:

Colorado Springs Home Buyers: CHFA Loans

Colorado Springs Real Estate Agent Patricia Beck, providing real estate services to home buyers.

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Colorado Springs Home Buyers: CHFA Loans April 7th, 2009

Patricia

Many home buyers in Colorado Springs that would like to buy a home but cannot afford the down payment can receive down payment assistance from the Colorado Housing and Finance Authority (CHFA).

CHFA now has a new home loan program available not only to first time home buyers but also to those who have purchased a home previously. Qualified home buyers can receive down payment and closing cost assistance through CHFA after they complete the required education course. There are many CHFA participating lenders that work with home buyers in Colorado Springs and can provide more information about CHFA’s products (HomeOpener and HomeOpener Plus mortgages).

Some of the requirements to qualify for CHFA include:

A credit score of at least 580
Debt to income ratio cannot exceed 45% of income (this includes the mortgage payment)
Required Homebuyer education class is free and can be completed in a classroom or online.
Buyer must meet income limits in order to qualify

Additional Reading:

Can I buy a home in Colorado Springs with no down payment?

Changes with CHFA

For further information on available Homes in Colorado Springs contact your Colorado Springs Real Estate Agent, Patricia Beck.

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$8,000 tax credit available to first time home buyers in Colorado Springs! February 18th, 2009

Patricia

There is another advantage available to first time home buyers who purchase a home between January 1, 2009 and November 30, 2009. First time home buyers or buyers who have not owned a home in the last three years will benefit from the $8,000 tax credit. Additionally, there are income limits (75K single and 150K joint filers) in order to qualify for the tax credit.

So how does the tax credit work? Unlike the most recent $7,500 tax credit that was actually an interest free loan, the $8,000 tax credit does not have to be paid back. Buyers simply claim the $8,000 tax credit on their tax return in order to receive a refund check. If a buyer on the other hand is required to pay any taxes at the end of the year, the $8,000 tax credit will be applied toward the tax bill and any amount remaining will be sent to the buyer.

Buyers can simply amend their 2008 tax return if they do not want to wait until tax season to receive the $8,000 tax credit.

This is a nice perk if you are planning to buy a home this year. Note: Buyers must live in the house for a minimum of three years in order to avoid paying back the $8,000 credit.

If you are a first time home buyer and would like to benefit from the tax credit but do not have available funds to purchase a home, the JumpStart program may benefit you. Under the new program, buyers may receive $6,000 to use toward closing costs. The amount borrowed cannot exceed 3.5% of the loan amount therefore the buyer may not be able to use the entire $6,000. Once buyers receive the $8,000 tax credit, they pay back the $6,000, interest free. If the money is not paid back, interest will begin to accrue on the money borrowed. Check with your lender for more details!

Buyers can now borrow up to $8,000 (bridge loan) through an FHA-approved non-profit organization. This program allows buyers to utilize the money in advance to pay for closing costs or down payment instead of having to wait for the tax credit after their home purchase. As of July 2009, this program is not yet available through any servicers in Colorado Springs.

Additional Reading:

5 Important Things Buyers Should Pay Attention to While House Shopping

10 Valuable Resources for Homebuyers in Colorado Springs

5 must have tools for homebuyers in Colorado Springs

5 reasons you should buy a home right now in Colorado Springs

For further information on available Homes in Colorado Springs contact your Colorado Springs Realtor, Patricia Beck.

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Colorado Springs Real Estate – Loan Modifications December 24th, 2008

Patricia

There are options outside of foreclosure available to homeowners who have fallen behind on their mortgage payments. Many banks have taken measures to slow down foreclosures and help troubled homeowners. Citibank not only has put a moratorium on foreclosures into effect, it is even communicating and working with homeowners who are not currently in foreclosure but at risk of defaulting on their mortgage.

The methods used to modify loans often depend on the bank and mortgage type. Listed below are a few approaches exercised by banks to modify loans including but not limited to:

1.) Deferring all late payments to the end of the loan in order to help the homeowner get back on track.
2.) Increasing the duration of the loan in order to reduce the mortgage payment.
3.) Placing a lien on the property via a 2nd mortgage for the unpaid amount.
4.) Freezing the interest rate for borrowers with an Adjustable Rate Mortgage (ARM)
5.) Refinancing and reducing the loan up to 90% of the current appraised value for subprime borrowers (if permitted by the existing mortgage holder). Note: Once homeowners sell the property, the Federal Housing Administration (FHA) may keep a percentage of the net proceeds.

You can find out if you are eligible for a loan modification by contacting your lender. There are options outside of foreclosure, even if you cannot modify your loan. Contact your Colorado Springs Real Estate Agent for assistance.

Additional Resources:
Colorado Foreclosure Prevention Hotline: 1-877-601-4673
HUD Housing Counseling and Referral line: 1-800-569-4287

Colorado Springs Real Estate information and services

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