Editors Note: Due to the mortgage and credit crunch, many First Time Homebuyer Programs may no longer be available. If you’re in need of a Denver Colorado mortgage, contact us to discuss your mortgage options.

Today, there are many first time homebuyer programs to choose from. Here’s a sample of what’s available:

• FHA – often the best choice in first time home buyer programs. Requires 3% down and upfront mortgage insurance.
• Neighborhood Champions – allows 97% and 100% financing for Teachers, Firefighters, Policemen, and Medical Workers.
• Credit Flex – allows 97% and 100% financing on 7 year ARMs and 30 year FRMs.
• Fannie Mae Flex 97% – allows 97% on 7 year ARMs and 30 year FRMs.
• Fannie Mae Flex 100% – allows 100% on 7 year ARMs and 30 year FRMs.
• Freddie Mac 97% – allows 97% on a 30 year FRM.
• Freddie Mac 100% – allows 100% on a 30 year FRM.
• Nehemiah Foundation Program – FHA no down payment program.
• Nehemiah Conventional Program – conventional no down payment program.
• VA – military veteran loan that allows 100% financing. Requires a VA Funding Fee.
• 80/20 – no money down combination program. Eliminates mortgage insurance with 80% First mortgage, 20% Second Mortgage.
• 80/15 – eliminates mortgage insurance with 80% First mortgage, 15% Second Mortgage. Requires 5% down payment.
• 80/10 – eliminates mortgage insurance with 80% First mortgage, 10% Second Mortgage. Requires 10% down payment.
• 103% – allows 3% of the purchase price to be rolled into the loan.
• 107% – allows 7% of the purchase price to be rolled into the loan.

Your Monthly Credit Card Minimum Payments May Double

For years, low monthly minimum credit card payments have encouraged us to spend more than we really can afford. Under pressure from the Office of the Comptroller of the Currency (which regulates national banks), the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, some national banks will soon be increasing minimum monthly credit card payments so they are closer to 4% rather than the current average of around 2%. Some major banks have already increased the minimum payments and others are about to follow suit. In the long run, an increase is actually good news for consumers, but in the short-term, it could be devastating for people who have overextended themselves. If an average American, with $10,000 in credit card debt, minimum monthly payments are probably currently around $200(2%). Under the new guidelines, sometime this year, a minimum payments may go up to as much as 4% of the balance, or $400 on a $10,000 credit card balance. In addition, minimum payments and your interest costs will continue to rise as interest rates go up. If $2,000 or more is owed, and only the minimum balance of 2% each month is paid, it will take approximately 30 years to pay off the balance even if another charge occurs under a penny. Under the new guidelines, the minimum payment will have to cover the interest and have enough left over so one could pay off your balance in 10 to 12 years if any new charges were not made. This is good because people will get out of debt sooner and pay a lot less interest over the years (thousands of dollars for many people). First, people should think twice before adding purchases to their credit cards. If they charged a $2500 spring break trip to a credit card or if they just splurged for a $2500 flat screen television and charged it to a credit card, at 18% interest it would take 34 years and six months to pay it off if they paid a 2% minimum balance and never charged another penny to their credit card. In that time, one paid $6,421 in interest in addition to the $2500 original cost. When a purchase is made on a credit, know what the true cost to the consumer will be if they don’t pay it off right away.

Once your loan application is filled out and sent to the lender for review, the first thing they will look for is your ability to payback the loan you are requesting. My team and I have a streamlined loan process to help you get your ducks in a row prior to this review. A grand slam loan package is in perfect order and answers all the important questions up front. We know what the lenders are looking for, based on long-term relationships with them and extensive knowledge of guidelines for a multitude of loan programs that are available today.

What is the lender looking for when they review the loan application?

The lender wants to know about your personal financial picture, including savings and credit history and your employment stability. The co-borrower’s history is also taken into consideration. The lender also considers the loan amount and appraised value of the home you are looking to purchase. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can I do on my end to make it easier?

Before taking out a home loan it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. Aim for having enough savings to cover your down payment, closing costs if necessary, and two month’s expenses in case of emergency. We’ll help you find the loan program that works for you.

If I just started a new job six months ago, can I still apply for a loan?

A stable employment history is important, but the lender does take human factors into consideration. If you’ve recently completed college or vocational training, or were released from the military, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are loan programs that can work with your situation. If you are a freelancer or do contract work, the lender will look for consistency in income over the last two years.

Consistency is the key word in the lender’s mind. But know that lenders have developed many different loan structures to meet the needs of the general public. When your grandparents bought their first home, they probably put 50% down and made a lump sum payment when the note was due. Times have changed, and so have loan programs. My team and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors®, CPAs, Financial Planners and Credit Repair Consultants to lend you additional assistance.

Choosing the right person to represent you in negotiating your home purchase is a major decision. Whenever you see the designation of Realtor® (with a registered trademark) you can rest assured that person is a member of the National Association of Realtors® (NAR), and has a commitment to meeting the standards of the organization. My team and I have a network of Denver professionals that have done a great job for our clients in the past, and we can provide you with a referral to a qualified representative, and pre-approval to shop as a cash buyer.

How will you know which Denver Realtor® is right for you?

Seek to work with an experienced Denver Real Estate professional that works with buyers on a regular basis. A real pro will go the extra mile to show you that they will look out for your best interest and gain your respect. Sincerity is a key word here. This type of Denver Real Estate Agent will act promptly to get you information about their team and their methods of doing business, along with quotes and references from past clients.

Once you set an appointment to meet with a Denver Real Estate Agent and his/her team, they should be rolling out the red carpet for you. You should have a personal introduction to each person you are expected to have contact with throughout the buying process. They should go out of their way to establish a long-term relationship with you, rather than thinking of you as a one-time transaction.

An experienced buyer’s representative will ask many questions regarding your goals rather than tell you what they think you want to hear. He/she will also take your finances into consideration so that they can help you make the purchase you qualify for. They will seek to exceed your expectations in every way by having a system in place that provides complete customer satisfaction.

What can an experienced Denver Realtor® do for you?

An experienced professional will have access to the computerized Multiple Listing Service (MLS), which changes daily. He or she can provide you with new listings to consider as they become available, and will also include important demographics and market value information on the area you are seeking to buy a home. This person will serve as a strong negotiator on your behalf and provide guidance every step of the way. In the long run, using a trained professional will save you time and money. It is important to let your Denver Real Estate Agent know what your goals are so he/she can eliminate the listings that do not meet your criteria.

In recent years, it’s impossible to turn on the television or read the headlines without seeing a warning of impending doom. The media claims that the housing bubble is growing too big, and it’s about to burst! This pessimism has sold a lot of news stories, but it has also created many false concerns for first-time and move-up home buyers as well as investors. We keep hearing about this horrible catastrophe, yet the real estate market continues to boom. Why is that? Because the media neglected to consider one very important factor that is driving our current economic recovery: demographics.

The real estate boom began when mortgage interest rates fell into the single digits, making housing much more affordable. While this certainly contributed to home sales, there are additional causes we can isolate. Dr. David Lereah is a best-selling author and the Chief Economist for the National Association of REALTORS® (NAR). In a recent interview, Dr. Lereah revealed, “The biggest factor that affects real estate today, and has made it immune to some cyclical changes in the economy, has been demographics.”

The most significant and frequently mentioned demographic is the “Baby Boom” generation, which refers to children born in the years following World War II. Economic forecasting expert and author, Harry Dent, has written extensively about how property buying habits occur in a predictable fashion as a generation ages. From needing an apartment in college, to buying a starter home and eventually trading up to something larger, it is all cyclical. Since the Baby Boom generation is the largest so far, their impact has been far greater than the generations that proceeded them.

Now that Boomers have moved into their top earning years, they continue to push the housing market to new levels. They are purchasing larger primary residences as well as vacation homes and investment properties. The statistics for 2004 reflect this trend, with 36% of home sales going toward second homes and 23% of sales going toward investment properties.

Demographic trends don’t end there:

• Immigration - There has been a large influx of immigrants over the past three decades. According to Lereah, it typically takes at least a generation for immigrants to become fully active in the home buying market.
• Children of Baby Boomers - This generation is now in their twenties and looking to purchase their first homes.
• Retirees - While the demand for housing is expanding, the supply is decreasing. With advancements in medicine and treatments of disease, retirees are living longer. This means that they are occupying their homes for more years, which decreases the supply of homes available for purchase.

In addition to the demographic factors listed above, real estate has been a rewarding investment. Stocks and bonds have not performed as well as investors were used to, while real estate has exceeded expectations. In an uncertain world, people are more comfortable investing their money in property which will appreciate.

So if the current boom can primarily be explained by the factors we just discussed, how do we know whether it will continue?

Dr. Lereah says, “We are in the Golden Age of Real Estate.” Even if the economy should slow and interest rates increase slightly in the coming years, the demand for houses is still strong. The biggest impact that such a change would have is to decrease the rate of price appreciation. While this may sound ominous, it really isn’t.

The media likes to refer to the real estate boom in terms of bubbles and balloons. In keeping with that analogy, Lereah indicates that local markets may react to higher interest rates by letting some air out of the balloon. The double digit price appreciation we’ve been experiencing could decrease over the next year or two to a more typical 4-6% range. This is still a higher rate of return than found in the stock market, all things considered.

So if you are looking to purchase a second home or investment property, where might be a good location to focus your attention? Ideally, where the Baby Boomers are planning to retire. The demand for housing in these areas continues to grow. Over the past year, some of the highest price appreciation took place in the resort areas of Florida.

The next time you turn on the television or read the headlines, be secure in the knowledge that the sky is not falling.

Additional Resources:
Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through The End of The Decade – And How to Profit From Them – by Dr. David Lereah

There’s a site called www.gizooggle.com that translates any website into ghetto colloquialism. Here’s an example take from my site:

EXPECT MORE FROM YOUR MORTGAGE PROFESSIONAL

Whether you’re looking to build your dream home, purchase a home, or refinance you should expect more from your mortgage professional. I work as a mortage broker and mortgage banker. As a mortgage broker, we have access to a vast array of loan programs so we’ll find the right one for you. As a mortgage banker, we have control over the lending process and fund your loan with our own money.

was converted to:

EXPECT MORE FROM Yo MORTGAGE PROFESSIONAL

Whetha you’re look’n ta build yo dream home, purchase a home, or refinance you should expect more fizzle yo mortgage professizzle. I wizzay as a mortage drug deala n mortgage playa with the gangsta shit that keeps ya hangin. As a mortgage playa , we hizzle access ta a viznast array of loan programs so we’ll find tha right one fo` you. As a mortgage wanna be gangsta , we have control over tha lend’n process n fund yo loan wit our own money.

All right, i’ll admit there’s nothing gangsta about the mortgage business. However, I do my best to represent and keep it real! Fa shizzle!