Currently over 25% of home buyers use FHA loan to purchase their home in Colorado Springs

For a free Buyers Guide, Email Kathy Torline at KTorline@msn.com

Related Article: 

• Financing matters!
• Why do I have to pay mortgage insurance?

The Department of Housing and Urban Development set forth a legislative mandate in Section 202 of the National Housing Act for ensuring that FHA’s Mutual Mortgage Insurance Fund remains financially sound.  As part of these changes, and in an attempt to strengthen their financial position, there is a mandated increase in the Annual Mortgage Insurance Premiums for case numbers dated on or after April 18, 2011. 

At first glance these changes may not seem like much.   But due to the significant increase in the Annual Mortgage Insurance Premium from .55% in April 2010 to 1.15% in April 2011,  it definitely decreases your buying power

What is Mortgage Insurance?

When buyers are approved for FHA home loans, they are required to carry mortgage insurance.     That includes both a Mortgage Insurance Premium (MIP) and an Up Front Mortgage Insurance Payment (UFMIP).     The Upfront Mortgage Insurance Premium payments go into an escrow account set up by the U.S. Treasury Department and the funds are used to protect the government in case the borrower defaults on the FHA loan.

 Here’s a summary the major differences on a $250,000 FHA loan during the last year

• In April 2010, the FHA Up Front Mortgage Insurance Premium (UFMIP)was 2.25% and the Mortgage Insurance Premium (MIP) was a factor of .55%.
• In October 2010, The FHA UFMIP changed to a flat fee of 1%, but the MIP increased to .9% annually.
• Beginning April 2011, the FHA UFMIP will continue at a flat fee of 1%, but the MIP will increase again to an annual factor of 1.15%. 

Portions of this article were furnished by Bev Cresswell with Academy Mortgage in Colorado Springs

 If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

Kathy (719-287-1049)   KTorline@msn.com

Are you asking why I would say this?   Essentially, financing matters.

If you would like information about selling your Colorado Springs Home, call Kathy Torline at 719-287-1049

Related Articles:

• Smells don’t sell 
• How long should it last?
• Why didn’t my house sell? Top 6 list of reasons
• Why didn’t my house sell? Part II
• hat are polybutylene pipes? Colorado Springs homeowners beware! 
• Why didn’t my home sell?
• Make every showing count
• 134 questions for sellers to disclose

Different financing options effect home sellers in different ways

• Buyers who use FHA and VA financing have certain closing costs they cannot pay for, hence the seller ends up paying for these costs.   Over 50% of Colorado Springs buyers are currently using VA or FHA loans.
• Both FHA and VA buyers typically take about 45 days to close.
• Conventional loans can typically close even faster than FHA and VA loans, maybe within 30 days.
• If a home needs substantial repairs, a great option is to market it to be financed with a FHA 203K loan. 
• Both VA and FHA appraisals can come back with appraisal conditions that can be required home repair items to be fixed before the loan can be processed.  As an example, FHA requires the home to meet minimum living conditions which could cost the seller money; including repainting areas on the exterior of the property where paint is flaking and peeling.
• Both VA and FHA loans limit how much a seller can contribute towards the buyer’s closing costs and down payment

Here’s a chart that shows the financing for homes sold in Colorado Springs for the first two months of 2011.

If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

Kathy (719-287-1049)   KTorline@msn.com

Search for Colorado Springs HUD homes

Related Articles:  

• Facts, figures, and details from HUD
• How do I find HUD homes listed for sale in Colorado Springs? 
• Bids on Colorado Springs HUD homes are handled 2 different ways 
• No utilities are on for most Bank-owned properties in Colorado Springs 
• HUD’s Good neighbor program, Half price homes

There are currently 43 HUD homes for sale in the Colorado Springs area and 12 under contract.   With new properties coming on the market every day, home buyers have some great opportunities to purchase these homes.  Many of them need some repairs; and are perfect candidates for an FHA 203K loan.

What is a FHA 203K loan?

HUD has an FHA 203K loan that allows home buyers to finance an additional $35,000 in repairs into their mortgage purchase.  This program allows the the buyer to have easy access to the funds to improve or repair a property; including improvements identified by a home inspector or an FHA appraiser.  The following is a list of some of the repairs that can be completed under this program.

* Repair/Replacement of roofs, gutters and downspouts
* Repair/Replacement/upgrade of existing HVAC systems
* Repair/Replacement/upgrade of plumbing and electrical systems
* Repair/Replacement of existing flooring
* Minor remodeling, such as kitchens, which does not involve structural repairs
* Exterior and interior painting
* Weatherization: including storm windows and doors, insulation, weather stripping, etc.
* Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwaves.
* Improvements for accessibility for persons with disabilities.
*Lead based paint stabilization or abatement of lead based paint hazards.
*Repair, replacement or the addition of exterior decks, patios and porches.
*Basement remodeling which does not involve structural repairs.
*Basement waterproofing.
*Window and door replacement and exterior siding replacement.
*Well or septic system repair or replacement.

To find out more information about Colorado Springs Foreclosures and Colorado Springs HUD Homes, Call ……

Kathy (719-287-1049)   KTorline@msn.com  

Search for Luxury homes in Colorado Springs

Related Articles:  

• Pre-Qualification or Pre-Approval, which do you need to buy a home?

When the credit crisis hit a couple of years ago, most lenders stop making loan for more expensive homes; which has certainly made it challenging for homes to sell in the $500,000+ range.  Per a recent article in the Wall Street Journal on Saturday, November 6th, it seems that some regional lenders are starting to issue more jumbo loans.

Jumbo loans are classified as loans too big to be issued by Fannie Mae and Freddie Mac; and the maximum amount for these loans in Colorado is $417,000.  According to the WSJ article, Jumbo loans constituted 5% of total mortgages in 2009 and 2010 vs. 20% from 2004 to 2007.

More jumbo loans could certainly help the Colorado Springs luxury home market.  There are currently 683 homes for sale in the Colorado Springs that are priced over $500,000; and 339 homes over $500,000 have sold in the last 10 months; equates to 34 homes a month.     There is 20 months of inventory on the market; making it an BUYER’s market.

Since the consequences of jumbo loan foreclosure are so serious, getting approved for this type of loan is even more difficult.    It is not uncommon for lenders who do participate in the jumbo loan market to utilize very strict guidelines for approving loans; and credit standards are are often more stringent for jumbo loans.   In addition, many jumbo loans require a minimum down payment of twenty percent   In additional jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan.

If jumbo loans start to come back in the market, it certainly will help the luxury homes in Colorado Springs.

If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

To find out more information about buying a home in Colorado Springs or Manitou Springs, call ….

Kathy (719-287-1049)   KTorline@msn.com

I attended a class yesterday’s by Mark J. DeZuba and Janet McMonigal with Farmers Insurance.  As with most classes, I learned lots of helpful information and wanted to pass on my top 6 list.

• T-Locks…………More and more insurance companies won’t insure homes in the Colorado Springs areas that have T-lock roofs.   Many homes in the area were built with T-lock roofs; as they were thought to be more resistance to wind since the shingles lock together.     But these types of shingles are no longer manufactured, hence it’s very challenging for a roofing company to just replace a couple of shingles.   If you are looking at buying a home with a T-lock roof, you may want to check with your insurance company and find out how they handle it and what they cover.   (FYI:  There are several roofing companies in Colorado Springs that have a supply of T-locks.)

T-Lock roofs have a unique look and can be identified by their individual “T” shaped shingles.

Also, if you are interested in a home with Shake Shingles, check with an insurance agent.

• Vacant homes ……….. If you are getting ready to move and your house is going to be vacant while it is being sold, double check with your insurance agent.    Your policy may need to be changed since it is a vacant property.    Same thing if you are insuring a vacation home and won’t be living in it full time.
• Dogs …….. Do you own a dog; or multiple dogs?  Again double check on your policy with your insurance agent  Many of them have exclusions for any liabilities that occur from your dogs.    Don’t just assume your insurance company will cover any expenses if your dog happens to bite someone.  Some policies exclude all dogs; and some only exclude certain breeds.

It’s estimated that 39 percent of American households have at least one dog; and the numbers are probably even higher in Colorado Springs.

• Your belongings …………   We’ve all heard this many times from our insurance agents, but how many of us really do it.    In today’s age of digital cameras, take pictures of each room in your house from multiple angles, then upload the shots to some type of digital storage site.  (Google has an easy way to do it on Picassa.)   That way if your house went up in fire; you’d still have access to all of the pictures to help figure out your personal property.

• Expensive jewelry……   Check your policy or with your insurance agent to see if you should have an additional rider to cover it.  Again, it would be easy to take pictures of your jewelry and save it to Google, or any other online picture storage site.

• Large detached garage or a barn….   Do you live in a small house with a bigger detached garage or a large barn?   Check with your agent to see if you need an additional policy to cover the structures.  If your outbuildings are larger than you house, you may need additional coverage.

   If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

To find out more information about buying a home in Colorado Springs or Manitou Springs, call ….

Kathy (719-287-1049)   KTorline@msn.com

Related Articles:

• 26 criteria used to determine interest rates
• Financial Do’s and Don’ts

One type of financing that many Colorado Springs Realtors don’t know about, is El Paso Bond Money.  According to a recent article in the Gazette, there is still money available for about 150 home owners.   There are a variety of qualifications for home owners including you must be a first time home buyer (or haven’t owned one for 3 years).  The property must be purchased in a targeted low-income area of Colorado Springs,  and the maximum purchase price is $283,000.  There are also certain maximum income requirements

Here’s a link to the information on the El Paso County web site.

According to the article  “The county has provided mortgage assistance to local homebuyers since 1979, when the federal government began supporting single-family housing initiatives, McCann said. About 6,000 local homebuyers have taken advantage of the programs in the past 30 years.”

One important thing to know about the program is that the Down Payments Grants are not a loan and the program is only for owner occupants, not investors.

There are a variety of lenders that participate in the program, but here at two lenders that I’ve used and am very confident in recommending, Ent Federal Credit Union and Academy Mortgage.

To find out more information about Colorado Springs homes, Call ……

Kathy (719-287-1049)   KTorline@msn.com  

For a Free Colorado Springs Relocation Guide, Email Kathy Torline at KTorline@msn.com

Related Article:

• How do I get a down payment for Homes in Colorado Springs?

Here’s a quick run-down on the Colorado Springs Housing Market

• Sales in Colorado Springs are down 24% from September 2010 to September 2009
• VA Loan continue to be a popular choice for Colorado Springs Home Buyers
• 15% of the sales in September 2010 were paid for by cash
• The numbers of homes purchased by Conventional Loans has continued decrease, reflecting the state of the current lending environment.

To find out more information about Colorado Springs, Call ……

Kathy (719-287-1049)   KTorline@msn.com

Are you moving to Fort Carson?  Schriever AFB?  Peterson AFB? Air Force Academy?

Related Articles:

• How do I get a down payment for Homes in Colorado Springs?
• Credit score explanation
• Financial Do’s and Don’ts
• Local lenders vs. a National lender

With your VA Guaranteed Home Loan benefit you can still obtain a loan with no down payment and a fixed interest rate that is as good as or better than a conventional mortgage rate.   Let’s start with some of the basics about VA loans.

What is a VA Guaranteed Home Loan?

Some people have the misconception that the military is the organization loaning the money.   Not true.   Your VA Guaranteed Home Loan will be made by a private lender, such as your bank or a mortgage company of your choosing that has VA lending approval. 

The guaranty means the lender is protected if you fail to repay the loan.  This is also why you will not have to pay private mortgage insurance (PMI).    Normally, a lender would require a down payment and/or PMI to obtain a loan.   

For even more facts about VA Guarantee Home Loans in Colorado Springs, go the web site for the United States Department of Veteran Services.

You still must meet loan requirements

If there are items in your credit history that are derogatory, you can be denied a loan even though you have your Certificate of Eligibility.    The VA cannot demand a lender make a loan to you that would violate their lending practices. 

Lenders also must comply with the VA rules and policies when it comes to income and credit standards.    Just having the benefit is not enough, you must be credit worthy and have the correct debt to income ratios.

Is a VA Appraisal the same as an Inspection?

No, these are not the same thing.    Many issues can affect a VA appraisal and certain things must be repaired before a VA Loan can close. These are normally safety issues, such as stairs with no railings, back doors without decks, or peeling paint.   Additional conditions that can cause issues are rotted exterior wood trim,  roof leaks, broken windows, plumbing leaks and exposed electric wiring.

The home cannot be in major disrepair. It needs to be livable and in decent condition.

What are the benefits of a VA Home loan?

• No down payment required
• Ability to finance the VA funding fee
• No mortgage insurance premiums
• An assumable mortgage
• Right to prepay without penalty

It could be the perfect time for you to purchase a Colorado Springs home with a VA loan.  Interest rates are at all time lows and home prices in the Colorado Springs have hit bottom.

  If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

Kathy (719-287-1049)   KTorline@msn.com

Related Articles:

• Pre-Qualification or Pre-Approval, which do you need to buy a home?
• Marriage and Mortgages FAQ’s
• How do I get a down payment for Homes in Colorado Springs?
• Why do I have to pay mortgage insurance?
• 26 criteria used to determine interest rates

If you are trying to buy a Colorado Springs home with FHA or VA financing, choosing a nationwide bank or lender can raise red flags for the seller and the Listing Agent.    In theory, the nationwide banks may seem to offer the best pricing and best closing costs; but not being local can cause problems.

• Even if you have a letter from the national lender saying you are pre-approved, the house still needs to appraise.
• I’ve heard from some of other Realtor friends that some of the national banks (who don’t have a local office) are using appraisers who are not local and who may not understand the prices and the market trends in Colorado Springs.
• Even if the appraisal does come in at or over the contact price, some of the larger lenders are requiring second, even third appraisals.
• Also, some of the larger nation-wide lenders don’t assign one key contact to your account.  Hence, if you have a question, you may be transferred to a person in a call center, and sometimes the call center isn’t even in the U.S.    No problem if your loan doesn’t incur any challenges, but if you run into any problems you want one consistent person to talk to to get answers from.
• If you use a local lender, you can walk in their office and talk to a live person.   Sometimes that can make the difference in getting a loan.

If you decide to choose a lender that is a nationwide bank or lender, you won’t necessarily have a bad transaction.    But there are advantages to staying local.

For a list of Colorado Springs Lenders and banks, contact Kathy at KTorline@msn.com

 If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

Kathy (719-287-1049)   KTorline@msn.com

Search for Colorado Springs Condominiums

Related articles:

• 5 reasons townhomes make an easy transition from apartment life
• New rules make condo buying harder
• Colorado Springs Home — Is a Condo or a Townhome right for you?
• Do you know what your townhome insurance covers? 

Have you heard about the HRAP/DELRAP system?  It lists condo developments that meet eligibility requirements set the Federal Housing Administration.  

If you are interested in a purchasing a Colorado Springs Condo, your ability to get an FHA loan will depend on an “approved” rating by HRAP/DELRAP system.

DELRAP stands for Direct Endorsement Lender review and Approval Process and the rules aim to prevent risky loans.   There are a variety of reasons that a complex may be labeled “rejected”:

• More than 15% of homeowners in a development are delinquent on the HOA dues  (This could be the result of homeowners in foreclosure)
• One investor or entity owns more than 10 percent of the project
• Less than 50% of the project is either sold or owner occupied
• More than half of the homeowners have FHA loans

You can go to HUD’s web site, and search for information on specific communities, you can even search by zip code.    I’m not sure that the database is fully populated, so some developments that deserve a “rejected” rating may still be added.

If you enjoyed reading this article, why not Subscribe to be notified of the next one? 

Kathy (719-287-1049)   KTorline@msn.com