USDA has MONEY to lend for home loans

loan.  There’s help out there for you in the form of a USDA (United States Department of Agriculture) home loan!  That’s right, the USDA has a home loan program geared to help people with a low to moderate income purchase homes in rural areas (you may also be surprised at what rural means).  These loans are backed by the US government and unlike FHA loans, USDA loans do not require the borrower to qualify for monthly mortgage insurance premiums.

To see if you qualify based on the income limits, visit Colorado USDA office adjusted income limits which can provide you the limits based on the county that you want to purchase your home in.

USDA loans offer competitive rates and also allow seller concessions to be used towards closing costs.  There’s no maximum home price, but USDA looks at what the borrower can afford to repay.  Don’t forget their are income limits, so if you don’t qualify for it, you can always look at an FHA loan which only requires 3.5% down payment.

This is a great time to buy as interest rates are at historic lows and  housing prices in general are down.  Don’t forget all the tax deductions you can take with the purchase of a new home.

Not all lenders will do these loans, as there is quite a bit more paperwork involved, but one of our frequent guest writers (who’s also a lender), Bryan Yaninek will be happy to assist you.  His number is 719-457-2200.  He’ll be happy to explain the whole program in detail.

For additional information of purchasing a home in Colorado Springs and surrounding communities, please contact Kathy (719-287-1049) nor Nancy (719-659-4380).  We’re experts in purchasing homes and would be happy to assist.

For some other reading on home loans, you might like enjoy looking through the mortgage and finance area of the blog.

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

I’m looking at buying a house in Rockrimmon, and my Colorado Springs Realtor said that I should check for latent defects, what is she talking about?   A latent defect is a physical weakness not noticeable after a reasonable inspection of the property.  Since some homes in Rockrimmon were built over old mines; you may want to have structural engineer involved in the inspection.

Why do I need to find out if a home in Old Colorado City has lead-based paint in it?  Because, lead-based paint is a hazardous product that is no longer manufactured and it is potentially poisonous   The presence of lead-based paint must be  disclosed to buyers and tenants residing in a property built before 1978.

I’m looking a purchasing a home in Monument, Colorado that is advertised as a lease with an option to buy, what does this mean?   It essentially means that the tenant has the right to purchase the home under certain conditions during the terms of the lease.   Many conditions can be included in the lease which can stipulate the purchase price, the monthly rent, the time frame of the lease, and what portion of the rent goes towards the downpayment.   If you decide to move forward on purchasing this home, you may want to contact a lawyer for legal representation to make sure you understand the lease option.

What is the legal age for buying real estate?   in Colorado, the legal age for real estate is 18 years and older.   This age varies state-by-state.

My Realtor said there are three liens on the property; not sure I understand what a lien is?  A lien is a legal  encumbrance against the value of a property.   The lien is not against the owner of the property.   There are many types of liens that can be filled, including ones for mortgages, for personal property taxes, for mechanic’s liens, and for federal taxes.

I called on a house that was listed For Sale By Owner, and the seller asked me if I had liquid assets to purchase the house, why does he need to know this?  The seller may have wanted to know if you had enough cash (or assets that can quickly be converted to cash) to purchase the home, or to put down an earnest money check.

The Colorado Real Estate contract has a box that my Realtor checked under Liquidated Damages, what is this?   When this box is checked on an offer, you are agreeing to the full and the final amount of damages received if a certain event occurs.  As an example, if you decide not to a buy house the day the closing is scheduled, you may be subject to liquidated damages and could loose your Earnest Money.

Why do I need to sign a Listing Contract to sell my Home in Palmer Lake with a Realtor?   A Listing Contract is essentially a contract between you and a licensed Colorado Realtor for the purpose of providing services to find a ready, willing and able person to buy a particular property under the terms specified in the contract.   It’s essentially an employment contract.

Previous posts:

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

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

I’m looking at an old house in Old Colorado City, and the inspector said it has Knob and Tube wiring and that we should get an electrical inspector to check it out.   What type of wiring is this?    It’s a method of wiring in very old buildings where the wires are attached to porcelain knows and tubes as an insulating method.  The inspector was correct, you should be a licensed electrical contractor inspect it.

The inspector we hired to look at a house in the Old North End said none of the doors have kick plates on them and he suggested we add them.     What did he mean?  Kick plates refer to a metal or plastic strip, placed at the lower edge of a door to protect it from damage by accidental kicking.  It protects the life of your door.

• A is for Absorption Rate
• B is for Building Code
• C is for CMA 
• D is for Deed
• E is for Earnest Money
• F is for Flag Lot
• G is for Gift Letter
• H is for Home Inspection
• I is for Inactive
• J is for Jumbo Loan
• K is for Kick Plate

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

Search for Foreclosed Homes in Colorado Springs

Related Articles:

• 5 things to know about buying foreclosures

While looking through some homes recently with a buyer, we came across a home that said “As Is”.  Whatever does that mean, asked my buyer.  I explained that it means the seller is unwilling or unable to make any kind of repairs to the property to meet the needs of the buyer.  This is actually done for a variety of reasons.

#1-The homeowner is trying to do a “short sale” where they are trying to prevent foreclosure.  If this is the case, the sellers may not have the finances to do any required repairs.

#2-The owner is a bank (REO) owned property that has already gone through the foreclosure process, which in Colorado means its already gone to public trustee sale. Quite a few of these properties need costly repairs and the bank is unwilling to do the repairs to ensure that they can net as much as possible from the sale.  Inspections are still a right, but they are for informational purposes only, so the potential buyer can determine if they want to invest in these costly repairs along with the price of the property. These are good buys for investors as usually VA or FHA will not allow their buyers to purchase a property needing major repairs.

#3-The seller knows that the basement or some other addition was never permitted by the county and they are unwilling to have it done at this date.  If this is the case, you can move on or if you really want the property, be willing to pay for the inspection yourself or agree to take it without the inspection; be careful with this, as when you go to sell, you may have the same problem and if its not up to current code, you’ll either have to upgrade the area, tear the whole thing out or you, too, will need to sell it “As Is”, which means that some potential buyers will not even look at your property. 

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Must Read Posts:

• It’s against the law
• Who is Representing YOU?
• Shop for a Lender like you shop for a house
• Research who you are working with
• 8 biggest mistakes made by home buyers
• Colorado Springs Home — Is a Condo or a Townhome right for you?
• Joint Tenants or Tenants-In-Common, the choice is yours when purchasing a home
• How to choose a Buyer’s Agent

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

Knowledge is Power — Real Estate Dictionary

My sister and I are buying a home in Colorado Springs, and my mother said we should own it in Joint Tenancy.  What does this mean?  Joint Tenancy means that both your sister and you would own the property in equal shares with right of survivor ship; your share would automatically pass to your sister upon your death. If you have questions, ask your Colorado Springs Realtor or contact a lawyer.

Is a second mortgage the same as a junior loan?  Yes, sometimes people will use the two terms to mean the exact same thing. This type of loan has a lower priority than a first mortgage.

What is a jumbo loan? This is a loan that exceeds the limits by Freddie Mac and Fannie Mae; and this amount can be subject to change.

The city of Colorado Springs is looking at taking my property by Eminent Domain to put in a 4 lane road and they said I would get just compensation.   What does this mean?  It means that you are entitled to just compensation equal to the fair market value of the property taken.

What is it called if both my boyfriend and I sign the note for the mortgage for home we are trying to buy in Old Colorado City?  It’s called a joint note and this means you both have equal liability for its repayment.

Previous posts:

• A is for Absorption Rate
• B is for Building Code
• C is for CMA 
• D is for Deed
• E is for Earnest Money
• F is for Flag Lot
• G is for Gift Letter
• H is for Home Inspection
• Real Estate Dictionary, “I” is for Inactive

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

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

 

Knowledge is Power — Real Estate Dictionary

My mother told me that houses are not considered liquid investments, they are illiquid. This means that real estate cannot be quickly converted to cash.

My Colorado Springs Real Estate agent put her license on inactive. What does this mean?  Colorado does allow Realtors put their license on inactive, which means that your Realtor cannot conduct business because her license is not active.  You’ll hear people also refer to this as putting their license in “Ice”

I’m helping my grandmother sell her house in the Old Colorado City in Colorado Springs, and my brother said she is incompetent to make this decision, not sure what he means. Incompetence refers to a person who is not insane but is mentally incapable by reason of old age, disease, weakness of mind and by could easily be misled. You may want to contact legal counsel to get a more complete description.

My father told me to look at the infrastructure of a new sub division in Peyton, on the eastern side of Colorado Springs, and I’m not what I should be looking for. The infrastructure refers to the physical structure of the subdivision, including roads, sewage and draining, highways, etc.

The Colorado Springs title company paperwork said there is an involuntary lien on the property, what’s this? An involuntary lien is created by law; such as a mechanics lien, or a tax lien.  Ask your Colorado Springs Realtor or the Title Company for a more comprehensive explanation.

My Colorado Springs Realtor told me that I can’t consider a room in my house a bedroom but it does have ingress; what is he talking about?  Ingress means that it must have a separate entrance.

I’m looking at buying an older house that was built in the 1940’s; do I need to check the insulation? Yes, it’s a good idea to have your home inspector check the insulation in the house.  The term insulation refers to the heat-retarding material applied in outside walls, top-floor ceilings, or roofs to prevent the passage of heat or cold into or out of a building.

My dad said that my grandmother died intestate, what is this? Intestate means that your grandmother died without leaving a legal will.

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

Knowledge is Power — Real Estate Dictionary

My Colorado Springs Realtor said that landlords are required to keep the property habitable, what does this mean?   Habitable means that the property must be fit to live in. If the property poses an imminent threat to the health or safety of the occupant, it is considered inhabitable.

What is hazard insurance? This insurance is for loss from physical damage to the property due to hazards such as fire, wind, and flood.

I’m looking at a property in Old Colorado City in Colorado Springs that is classified as a Historic Structure, what does this mean? It may be a property that is listed on the National Register of Historic Places located in a Historic district. The IRS provides tax incentives for preservation of designated historic buildings.

My brother said that my Aunt Sally who lived in Old Colorado City had a holographic will, not sure I know what this is.   It’s a will that is written, dated, and signed in your Aunt Sally’s handwriting, but it was not witnesses.  If you have questions about this, contact a local attorney.

Can I make the purchased of my home subject to a home inspection? Yes, in Colorado Springs, there is a section in the Colorado Contract that addresses Inspections, and there is a specific form for Inspection Resolutions items. Your Colorado Springs Realtor will be able to explain this to you in more detail.

My uncle wants to buy a half section of land in east of Colorado Springs, how big is this? A half section is 320 acres, which constitutes 1/12 of a township.

The MLS described a property I’m interested in as a handyman’s special, does this mean it needs a lot of work?   Contact your Colorado Springs Realtor, and they will be able to get more details for you on the property including the current condition and the Seller’s Property Disclosure Form.

What is considered hazardous substances? The EPA’s web site has an extensive list of items that are considered hazardous.

What type of buildings in downtown Colorado Springs are considered high-rises?   High-rises are generally considered higher than 6 stories, but there isn’t a national height standard.

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

What is a gap loan? A gap loan is very similar to a bridge loan, it’s used for temporary financing

My Great Aunt is very ill; can we get a guardian appointed to make legal decisions for her?  You’ll want to discuss this with a legal counsel, as a guardian is lawfully appointed by a court who is vested with the power and duty to care for and manage the affairs of a person who is legally incompetent and unable to do so himself.

My Colorado Springs Realtor said I need a gift letter from my aunt, as she is giving me the money for the downpayment on a house I like in the north part of Colorado Springs. Not sure what they need   A gift letter states that money you’ are receiving is a gift and doesn’t need to be repaid; your lender can tell you exactly what they need.

What is a good-faith estimate?  It an estimate that the lender gives potential borrowers that summarizes the closing costs. 

My mortgage broker told me that I have a grace period every month on the payment of my loan, not sure I understand this?   A grace period refers to the date that you can pay your monthly mortgage without being considered late.   As an example, your payment may be due May 1st, but as long as you pay by May 10th it’s considered current, consequently you have a 10 day grace period.

My realtor in Colorado Springs has the initials GRI behind his name, what is this?  GRI stands for Graduate Realtor Institute which is a professional designation for a Realtor who has completed the 18 classes covering such topics as law, finance, investment, appraisal, sales, marketing, etc.

I’m buying a house in Pleasant Valley in Colorado Springs and the inspector on our house said that we needed to put GFI’s in our kitchen, what are they?  It’s a safety device that is a part of special electrical outlets or circuits that immediately breaks the circuit if a short occurs.  In Colorado Springs, new homes are required to have GFI’s in all areas exposed to water or weather such as bathrooms and kitchens,

Do most of the new subdivisions in Colorado Springs have greenbelts? I’ve heard some people talk about this and I don’t know what it means?  Greenbelts are an area of undeveloped land around a residential area with the intention of preserving the open space and a natural environment. And yes, many new subdivisions in Colorado Springs have greenbelts.

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

Knowledge is Power, Real Estate Dictionary

I’m really interested in selling my house, but I don’t want to sell my oak hand-carved shelves affixed to the wall in the dining room and hallway as they were a gifts from my grandparents. In most states, including in Colorado, the chandlers would be considered Fixtures and would be included with the sale of your house. Make sure your Realtor exclude these items in your listing agreement; or you could take them down.

What is the FHA? Federal Housing Administration (FHA) is an agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is insuring of residential mortgage loans made by private lenders.

I was looking at a property description in the MLS, and it said the house was on a Flag Lot, what does this mean? A Flag Lot usually has the configuration of the flag with a longer driveway and the house on the “Flag”. There are many houses in Colorado and Colorado Springs that are on Flag Lots.

What is Flood Insurance? It’s insurance which covers a homeowner for any loss due to water damage from a flood; often required by lenders for homes located in FEMA-designated flood zones

My Realtor in Colorado Springs said that that as a Buyer’s Agent she has a Fiduciary Responsibility to me. What is this? A Fiduciary Responsibility describes the obligations of a Realtor, which include loyalty, obedience, and full disclosure. There is a complete description of the responsibilities in the Colorado Real Estate Approved Form called the Exclusive right to Buy Document.

The loan on my house is based on a 6 ¼ % rate for the duration of the loan, is this classified as a Fixed Rate Mortgage? Yes, a Fixed Rate Mortgage has a consistent rate for the term of the loan, it will not change.

What is a Flat Fee Broker? It’s typically a real estate broker who charges a fixed or flat fee for brokerage services instead of a commission based on a percentage of the sales price of the property.

Why does my builder say that he needs to place the footings below the Frost Line? Because once footings are below the Frost Line, there shouldn’t be movement in them. The Frost Line will vary in different parts of the Country.

My Realtor said that the seller is supposed to give Full Disclosure; I’m not sure I know what this means? Your realtor was referring to a requirement to reveal all material facts pertinent to a transaction.

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

 Knowledge is Power 

Search for Homes in Colorado Springs

Why do I need to put down Earnest Money when I’m making an offer on a house? In Colorado, Earnest Money is partially used to show your intention to purchase the property; it is consideration for the contract. You don’t have to put down Earnest Money, as you can also sign some type of promissory note, or you can use an Alternative Earnest Money Deadline.

The house that I want to buy in Old Colorado City has a utility easement on the back side of the house.  What is this? It is a right given to a third party to use a portion of the property for certain purposes. The utility company needs access to the property to repair and install power lines and water mains

I read in the paper that some land was going to be taken by Eminent Domain by the state for a highway, what does this mean? Eminent Domain is the right of the government to take private property for public use; with just compensation to the owner. As an example, when the City of Colorado Springs needs to expand the lanes on a road, they may take additional land by Eminent Domain.

My Colorado Springs Realtor said that I should get a survey on the house I’m buying, as the neighbor’s tall stucco fence may be encroaching on my land. What is an encroachment?   Encroachments are classified as unauthorized invasion or intrusion of real property onto another’s property.  They often incur as the result of poor planning; vs. deliberate intent.

I just got turned down for a loan. Doesn’t the bank have to give me a reason? Yes, according to the Equal Credit Opportunity Act (EOCA) passed in 1974; lenders must provide the reasons for denying credit to applicants when requested to do so.

I want someone to represent me in buying a house in Colorado Springs, what type of a Realtor do I look for? Look for an Exclusive Buyer’s Agent, a Realtor working exclusively for buyers as a fiduciary agent.

What is Equifax? It is one of the “Big Three” credit-reporting bureaus that operate nationwide.

Does my Realtor carry E & O Insurance? Yes, in most states, Realtors are required to carry Errors and Omissions Insurance, which covers liabilities for errors, mistakes and negligence; but it does not cover fraudulent behavior. In Colorado, every Realtor is required to carry E & O insurance.

Why is my Earnest Money held in Escrow? Escrow refers to a process of holding money until the satisfaction of the terms and conditions of the contract have been achieved.

Are Realtors held to some type of Ethics? Yes, all Realtors subscribe to a Code of Ethics and are expected to abide by the Code. In Colorado, real estate agents are also required to take periodic Ethic update courses to maintain their license.

Should I get Extended Coverage on my Title Insurance; what does it cover? Extended Coverage typically covers things that aren’t in public records; such as mechanics liens, easement, tax liens.

My friend told me that the contract wasn’t valid because it wasn’t executed. What does his mean? When you execute a contract, you sign or acknowledge it; the method to execute a contract varies in different states.

Do you have a real estate question relating to the letter E?  Leave us your question and we’ll get it answered for you.

• A is for Absorption Rate
• B is for Building Code
• C is for CMA 
• D is for Deed
• E is for Earnest Money
• F is for Flag Lot
• G is for Gift Letter
• H is for Home Inspection
• I is for Inactive
• J is for Jumbo Loan
• K is for Kick Plate

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