Top 10 Home Features
According to the National Association of Realtors Annual Profile of Buyer’s Home Feature Preferences, buyers want:
- Central Air Conditioning
- Garage (2 or more spaces)
- Walk-in closet in master bedroom
- Backyard/play area
- Cable/Satellite TV-ready
- High-speed Internet Access
- Separate shower enclosure in master/main bath
- Patio
- Fencing
- Home less than 10 years old
What do home buyers in Denver want?
- Central Air Conditioning is a maybe, or rather that depends. In the city and the suburbs air conditioning is a favorite feature. However as one gets up into the higher elevations above Denver, air conditioning becomes less and less necessary.
- 2 Car Garage. Once again, that depends. Urban parking doesn’t require or should I say "allow" most home owners to have a 2 car garage. In urban areas designated street parking might be the ultimate cat’s meow. Of course travel a few miles to the ‘burbs and the desire holds true. A 2 car garage is the minimum standard for most homes. Of course when homes are priced over say $400k a 3 or 4 car garage is the minimum standard!
- Walk-in closet. No argument here. Inner city home owners would settle for a closet that is wide enough to fit modern day clothes hangers! Suburban home owners wince at the thought of not having proper storage for all their worldly goods.
- Backyard/play area. Dream on homeowners. Colorado has been "Californicated" the smaller the lot the bigger the smile on the developer/tax collector/water marshall. What we do well in Colorado are parks, open areas and recreation centers.
- Cable/Satellite TV-ready. no argument here. Homeowners have a variety of choices from cable to satellite dishes. To each his own delight!
- High-speed Internet access. Actually this amenity is right up there with "air" when it comes to necessity. Who can remember a world without it?
- Sparate shower enclosure in the master/main bath. Around these parts we call that a "5-piece bath". Count ‘em; 1. toilet 2. double sinks 3. shower 4. tub. = 5 pieces in the bathroom. Most modern homes will have these features.
- Patio. Absolutely! Colorado sunshine is so delightful to soak up. We all enjoy the big bar-b-que out on the patio or deck.
- Fencing. Fido and kids need to have boundaries.
- Home less than 10 years old. It’s true selling a newer home is much easier than selling an older one. However many of our charming older homes have been updated to retain the charm and still present a modern face. Need I say they also sell quicker?
What else would you count as important in a home feature?
Personally, I like spacious, sunny rooms. Most of my time in spent in only a few rooms, so for me the more spacious the better. I can do without the areas of the home that are seldom used. Give me space where I spend my time and do away with everything else!
How about you?
FHA Limit Increased
I received this from one of my lender partners…
The mortgage industry just received a bit of good news with the loan limits for FHA being raised significantly! With this increase, a number of homeowners will benefit in the resale of their existing homes and with the purchase their next residence. For most of the Denver metro counties, the new FHA loan limit for a single unit property will be raised to $406,250. The exceptions are Boulder county @ $460,000, and El Paso county @ $325,000. Currently investors are restructuring their policies to accommodate this change, so more updates will follow.
With FHA financing, there are many advantages beneficial to the borrower:
- FICO scores are more conservative, with a minimum score of 600 for most investors
- $0 down with seller assistance thru non-profit, such as Nehemiah
- More flexibility with the job stability of each borrower
- Metro Denver is not considered a declining market with most investors
- Competitive interest rates, currently 6.00% for a 30 yr Fx rate.
Please let me know of any questions you may have regarding this or any other mortgage concerns. I look forward to assisting your clients with their mortgage financing needs.
Sincerely,
Jim Barnard
Senior Mortgage Banker
Englewood Mortgage Company
Direct 303-414-6850
Cell 720-201-6038
Fax 303-414-1681
Nehemiah Down Payment Assistance
Just got an email notice regarding the popular Down Payment Assistance program called Nehemiah.
Dear Colleague,
I am pleased to announce that Nehemiah was victorious in its litigation against HUD!
Judge Lawrence K. Karlton of the United States District Court for the Eastern District of California upheld Nehemiah’s motion for summary judgment. The Court Clerk’s Office is directed to enter judgment and close the case.
To be clear, the U.S. Department of Housing and Urban Development’s (HUD) rule to ban private down payment assistance as proposed in the “Standards for Mortgagor’s Investment in Mortgaged Property” regulation published October 1, 2007, is permanently set aside.
Mary Steinmeyer, Certified Mortgage Lender
This program enables home buyers to ask the seller for a "grant" for their mortgage down payment. The seller grants the down payment to the buyer via the Nehemiah program. Nehemiah charges the seller a fee for then doing the paperwork and passing the down payment along to the buyer.
This is good news for buyers who lack a mortgage down payment. With down payment assistance they may be able to purchase a home.
I say "may" because typically the seller inflated the price of the home to account for this bonus to the buyer. The appraisal becomes the issue if the value of the house cannot be met. In some markets this may be difficult.
Just the same, buyers say a little thank you to Judge Lawrence K. Karlton. If you ever see him on the street, perhaps buy him a beer! 
First home purchase
Home ownership is the American Dream come true. No where on earth is becoming a
home owner easier than it is in the U.S! Owning a home is part of our heritage and the desire to put down roots is strong.
The home ownership path is not always as easy as one would like. First timers find with house prices so high, they often have to settle for less than they would like. Of course settling for what you can afford vs. what you want is a rule of life for most people. Weeding out the "wants" from the "needs" is a process I help buyers with all the time. It doesn’t matter if they are in the entry level market or purchasing a million dollar home. There is always a gap between want/need.
First Time Buyers Challenges
After the decision is make to purchase a home, the first time buyer will face a few challenges which are generally overcome with a simple strategy.
- Credit; good, bad or lack there of! If a 1st timer has been living within their means, chances are they have good credit or perhaps no credit at all. Establishing a good credit record is the first step in obtaining a loan. If there is no credit a mortgage broker will advise obtaining a credit card and charging a few items on it each month. Paying off the credit card in a timely manner will establish a good track record for the first time buyer.
- Bad credit; It seems first time buyers are tempted early on in college to take out credit cards. Next thing they know they are in over their heads, unable to make timely payments. Late payments, written off charge card accounts, etc. can be taken care of. The remedy will vary from case to case, but a good mortgage banker can advise the best strategy. I’ve been told even the worse credit (including bankruptcy) can be turned around with proper attention.
- Down-payment; Buying a home has almost always required some sort of down-payment from the buyer. In recent years mortgage companies became very liberal in lending practices and made loans with no down-payment necessary. That practice was found be to faulty, so now we are back to requiring the buyer to have some "skin in the game!" The amount of skin required depends on the type of financing obtained.
- Low-income; Mortgage loans are typically made on a ratio of take-home earnings to house payment. An affordable house payment is generally defined as 30% of income. What happens to many potential buyers is their income is not sufficient to warrant purchasing a home in the area they live. In some instances there is a way around this by using First Time Home Buyer Programs.
First Time Home Buyers Programs
In Colorado, every county has some sort of program to assist buyers in purchasing a home. The Colorado Housing Finance Authority (aka CHFA) is a state run organization that makes loans to low income buyers. Typically these loans are made at a better interest rate then offered on the general market.
CHFA programs as do most First Time Home Buyer Programs have very specific requirements the borrower must meet.
- loans are made on an income based scale. Borrower’s income cannot exceed specific amounts.
- Borrower(s) must attend a Home Buying Class put on by the organization that is lending the money. If there are two borrowers on the mortgage, both must attend prior to closing on a home.
- Credit score is important
- Must be "under-contract" with a home before borrower can apply for loan.
I am purposely being a little vague here, because each program has rules that differ from the other. Income limits can be as low as $40,150 for one person to as high as $71,400 for a household of 1 or 2.
For buyers who are lacking a down-payment, there is also Down-Payment Assistance in the form of Denver Bond money. This program GRANTS up to 4% for a down-payment that NEVER has to be paid back. Grants can also be used to bring the cost of the mortgage down by 4% if the buyer is able to have the seller pay for closing costs.
Ok, are you confused yet? These facts actually make my head swirl!
"Putting together a loan package that uses CHFA, Denver Bond Money and other options has become an art form!" said Cindy Howeth CHFA’s top mortgage loan broker at 1st Priority Home Loans.
The important thing to know is there are people who specialize in funding first time home buyers. Whether the buyer qualifies for special financing or not, the process of buying a home for a first timer takes more care and concern. The buying process itself is not much different, but the education process that should accompany is critical in making the experience one of pleasure or one of pain.
In a Nutshell First Time Buyers Need To:
- Consult a Professional who can inform them of their options…all the options.
- Make the time to attend a Home Buyers Class, before purchasing
- Develop a strategy to become a homeowner
- Maintain or become fiscally responsible
- Go find a home you can afford
The journey may look like a maze of confusion, but with a little help first time home buyers can successfully navigate and enjoy the trip.
Other Articles of interest
First time buyers are finding opportunity with CHFA
First time home buyer assistance
First Time Home Buyers in Colorado have many benefits to assist them in purchasing a home. Counties in Colorado offer a wide assortment of programs to assist not just first time buyers, but all home buyers in learning more about the process of purchasing and maintaining a home.
Understanding the process helps future home buyers make better decisions. Once they understand the consequences of making a wrong decision they can avoid doing so. Local governments have prepared educational classes so successful that discounts are given to participants, because they have proven to be more responsible in homeownership.
Rewards for taking the education course comes in a variety of forms:
- lower interest rate
- grants for closing costs
- down payment assistance in the form of a “silent” loan
- discounts on PMI are a few incentives.
If you are looking to purchase a home, I suggest you investigate your eligibility for one of these programs. Each county and some city programs are offered throughout the State of Colorado. Check into the program in the county/city where you are interested in purchasing a home.
City Programs:
- Arvada - House to Home Ownership Down Payment Assistance Loan Program (970)-494-2021
- Aurora - Homeownership Assistance Program or (303) 739-7900
- Boulder - Homeownership Programs (303) 441-3157
- Colorado Springs - Homeownership Programs - Affordable homeownership opportunities (719) 385-5985
- Commerce City - Commerce City Housing Authority or call (303) 289-3698
- Delta - West Central Housing Development - Down payment assistance (970) 874-8204, ext. 24
- Denver - Del Norte’s Homeownership Program or (303) 477-4774, ext. 18
- Denver - Colorado Housing Assistance Corp at (303) 572-9445
- Denver - New West Side Economic Development (NEWSED) or (303) 534-8342 ext. 124
- Denver - Southwest Improvement Council (SWIC) - First Time Homeownership Program (303) 934-2268
- Carbondale - Mountain Regional Housing Corporation - Down payment assistance program (970) 963-9606
- Fort Collins - Home Buyer Assistance Program or (970) 221-6758
- Greeley - High Plains Housing Development Corp. (970) 346-7660, ext. 6540
- Longmont - Down Payment Assistance Program or (303) 651-8530
- Loveland - Larimer Home Ownership Program or (970) 667-3232, ext. 39
- Pueblo - Housing Department (719) 553-2850
- Pueblo - Colorado Bluesky Enterprises - Down payment assistance for individuals with developmental disabilities (719) 546-0572
- Pueblo - Neighbor Works of Pueblo - Affordable Housing Program (719) 544-8078
- Westminster - Home ownership Assistance (303) 227-2075
- Wheat Ridge - WRHA Home Ownership Program (303) 422-8600
Statewide Programs:
- Colorado Housing Enterprise (303) 428-1448
- Colorado Housing and Finance Authority (CHFA) - or (303) 297-7376 or (800) 877-2432, ext. 376
- Colorado Housing Assistance Corporation (303) 572-9445
- Colorado Division of Supportive Housing and Homeless Programs - Section 8 Homeownership Program or (303) 866-7350
County Programs:
- Adams County Housing Authority - Homeownership or Program HOTLINE (303) 227-2089
- Arapahoe County - HomeBuyer Program or (303) 738-8060
- Boulder County - Outside city limits of Boulder - Down Payment Assistance Program or (303) 651-8530
- Eagle County - Colorado Housing Assistance Corp or (303) 572-9445
- El Paso County - Single Family Mortgage Bond Program or (719) 520-6481
- Fremont, Chaffee, Custer and Lake counties - Upper Arkansas Area Council of Governments - Mutual Self-Help Housing or call (719) 269-7687 ext. 107
- Jefferson County - Colorado Housing Assistance Corp or (303) 572-9445
- Larimer County - Larimer Home Ownership Program - Outside city limits of Ft. Collins - (970) 667-3232, ext. 39
- Weld County - High Plains Housing Development Corp. (970) 346-7660, ext. 6540
- Bent, Crowley and Otero counties - Tri-County Housing - Downpayment and closing cost assistance, 2nd mortgages for repairs to a home being purchased, and Home Ownership Counseling (719) 263-5168
- Cheyenne, Elbert, Kit Carson and Lincoln counties - Prairie Development Corp. Down payment assistance program or (719) 348-5562 or (800) 825-0208
- Logan, Morgan, Phillips, Sedgewick, Yuma and Washington counties - Northeast Colorado Housing, Inc. in Fort Morgan - Down payment assistance program call (970) 542-0955
- All counties - Colorado Housing Assistance Corp or (303) 572-9445
Home buying boo boos
There’s not a day that goes by where I don’t learn something new. Occasionally I learn what NOT to do the hard way.
When these lessons thump me over the head, they make an impact. The results are usually a big benefit to my clients, through my lessons of hard knocks I know where NOT to step next time.
Yesterday was a hard knock day. I’m working with a first time buyer relocating to the Denver area from a neighboring state. He’s a sweet young man with an excellent job, outstanding credit and money in the bank. To a mortgage banker he is an A+ buyer.
Mr. A+ decided to pick his own mortgage lender. Not following the references of his buyer broker (that’s me) but instead walking into his local bank and speaking to the resident mortgage person.
Mistake #1 ~ When dealing with a mortgage broker always get a reference.
Mistake #2 ~ Use local mortgage bankers who are familiar with local laws and standards of practice.
As a Realtor I respect loyalty in my clients and never try to force my will on their decisions. Of course in this case it was not one of loyalty but luck. Luck that is on the part of the mortgage banker. She obtained a client based on nothing more than being in the right place at the right time.
Oh well, I figured what could happen? Mr. A+ was a perfect candidate for a loan. What could go wrong?
Colorado contracts have deadlines for various action items. These dates must be met in a timely manner. If a date is not met on or before the deadline, the buyer could risk losing his earnest money.
Here’s the catch. The mortgage broker didn’t read the contract. She went on what the laws and practices were in her state. She thought she was doing it right, but she failed to order the appraisal.
I discovered this by accident. After she said her work was done and loan was approved, she mentioned she just was waiting on the appraisal.
The sirens went off in my head. The appraisal is PART of the loan conditions, so if it wasn’t done how could the loan be done? DUH!
Luckily for us we discovered it in time.Had we not and the home didn’t appraise Mr. A+ may have lost his $4000!
The sad thing is all of this is written in the contract. All she had to do was read it.
In my conversation with her it didn’t take long to figure out she had very little experience. So little in fact I bet this was her first rodeo. OUCH!
I harp on out of state lenders all the time. Seldom do they perform like our local lenders who know the ropes and perform like super stars without my supervision.
Today’s real estate transaction is more complicated than ever. Things go wrong all the time and we fix them. Knowing what to fix and when is critical. It’s nice to be surrounded by capable professionals who work together to make the transaction smooth and seemingly effortless.
My strategy is so simple. When it comes to buying a home follow the voice of experience. Use a mortgage banker you can trust to get the job done and comes recommended by others.
Take advantage of my road rash and avoid having the pain of your own.
(Photo credits to Bill and Jane who know the joys of homeownership and the pain of road rash obtained from one small moment of oops on the road)
Foreclosure Investing for Dummies
First time home buyers, second time home buyers, investors whoever you are, our Denver real estate market in many sectors is prime for making a good deal. Many savvy buyers/investors realize this and are making their purchases now.
Investing in Foreclosures is not for everyone. There are many aspects that need to be considered, researched and understood. If you are thinking about purchasing a distressed property, there’s a new book that might help you understand the process. Written by Ralph Roberts it’s called: Foreclosure Investing For Dummies.
The book is written in plain English and talks about the different foreclosure purchase strategies.
- Banking on Bankruptcies
- Knowing When to Purchase
- Negotiating Short Sales
- Knowing the Lien Holder pecking order
- Tracking down property tax sales
- Bidding for properties at a foreclosure sale
Working with foreclosures is not for the weak of heart. Armed with knowledge of the process, a solid strategy and some investment capital, a wise investor can make a good living by specializing in this market.
The Dummy book is a valuable resource for those who wish to learn or merely brush up on their skills. I highly recommend it!
CHFA ~ an alternative source for financing
Homebuyers are finding their pot of gold at CHFA
Industry news in the finance sector has been scary to say the least. Home buyers are finding themselves with less and less options each passing day. One steady financing resource for purchase funds in Colorado is CHFA.
I received an excellent email from Mark Afman a Senior Loan Consultant with Universal Lending explaining CHFA’s offerings. Mark has given me permission to post his email:
CHFA is a non-profit investor that sells tax free municipal bonds to fund their loans and is there specifically to help low to middle income buyers into homes. They allow FHA and conforming loan programs to be funded through CHFA. The CHFA program is the antidote for the predatory lending practices that are now under so much scrutiny. CHFA sets the Interest rate so a lender could not charge a higher interest rate even if they wanted to and CHFA caps the closing fees that a lender can charge so CHFA is considered a loan program that protects home buyers.
There are 4 programs that CHFA offers. All programs require the buyer to attend a CHFA approved, free first time buyers education course.
1) MRB First Step: This is the program for first time buyers (someone that has not had an ownership interest in a home for at least three years). This is a 30 year fixed loan. There are income limits, for example a 2 person family can not make more then $71,400 a year. There are also purchase limits, for example in the Denver Metro area, the limit is $365,100. CHFA also offers a 3% "Silent 2nd" for down payment assistance. This 2nd mortgage has no interest or payments due for the life of the loan but is is a lien against the property so when the buyer is done with it they have to give it back. So if the buyer sells the property, refinances the mortgage, or lives there for 30 years, the original 3% must be paid back to CHFA. This effectively offers the buyer 100% financing. However, if a buyer uses the CHFA 2nd mortgage for down payment assistance, the interest rate on the 1st mortgage will be 1/4% higher then if they bring their own 3% down payment. The buyer is required to put in a minimum of $1,000 in to the transaction. The interest rates are set by CHFA at an affordable level usually below the normal prevailing market rates. They also cap the amount of closing costs a lender can charge at $600 plus a 1% origination fee. For current rates and information on the training, etc. go to www.CHFAinfo.com
2) Taxable Home Opener: This program is very similar to the MRB First Step program but it allows for non-first time buyers to use the CHFA advantages. The income limits are higher, for example, a 2 person household needs to be under $82,100 and there are no purchase limitations. The rates are about 3/8% higher on the Taxable Home Opener program then the MRB First Step rates but it offers a safe 100% financing option to those that do not have a down payment saved up.
3) HomeStretch: This is a new CHFA program for buyers that may need help keeping their payments lower. It is a 40 year fixed loan and has lender paid mortgage insurance, unlike the other 2 programs. The rates are higher by about 7/8% but with the combination of a longer term and no MI, the payments are generally lower. This program also allows for non-first time buyers to use it. It can also be used for refinancing. This program also allows for Involuntary Unemployment Insurance which pays up to $1500 a month against the mortgage payment for up to 6 months.
4) Home Access: This program is specifically for buyers that have a disability or the parents of a child with a disability. This is for low income, first time buyers. You can find more information at CHFA.
Looking to Denver real estate? Call me! (303-589-2022) Need to finance a home? Call Mark Afman 303-759-7392.
Thanks Mark! We all appreciate your sharing this excellent advice.
FHA steps into the limelight
The mortgage industry is in a flux right now. Companies that funded sub-prime loans are hurting, actually they are closing their doors. Respectable companies that routinely made good loans found themselves in a liquidity crisis and are shutting their doors as well.
As the pendulum swings towards the conservative side of lending, many would be home-buyers are finding themselves scrabbling to find funding for their new home.
Buyers who aren’t blessed with a huge down payment are turning to FHA mortgages. FHA loans are backed by the government and could be the answer for many. 100% financing may be going the way of the dinosaur, remembered fondly but extinct.
Saving for a home is back in vague.
FHA requires only a 3% down-payment. Three percent down is not a lot of money, it’s a manageable down payment. The source doesn’t have to be the borrower, the down-payment can come from family in the form of gift funds.
Saving for a home has many benefits.
Mortgage investors love to see buyers with down payments. Families pull together when they have a common goal. The unity of purpose creates a strong bond for everyone involved. The
No Brainer
There is an ad on the radio that makes my skin crawl. The company shall remain nameless, to protect the annoying. You will recognize the ad by what he says, "We don’t need your money!" Yes, you’ve heard it, they are selling refinances and new home loans direct to us from Gullible Island.
We don’t need your money? Yeah sure, those radio ads pay for themselves.
This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker