Buyers of Breckenridge Colorado real estate are able to take advantage of today’s solid mortgages. After a couple of years of adapting to the mortgage crisis, lenders are offering the purchasers of Breckenridge and Summit County real estate some fair deals on loans. Contrary to popular belief, many lenders have plenty of cash to loan out.
Although the new no-nonsense loans for Breckenridge, Keystone, and Silverthorne CO homes require tighter controls, they seem to be better for all parties—especially the borrowers’ situations. Borrowers must produce documentation for income, assets, and debt load. Applicants must qualify and underwriters are determining if the applicants are actually able to make their monthly payments, and then some.
Some buyers pay cash for Summit County CO real estate (primary residences, vacation homes in Breckenridge and Keystone, and second homes in Colorado’s playground). Others shop around. It is worth investigating products available through FHA-insured mortgages, credit unions, rural home loans, and local and state agencies.
With new loan limits as high as $625,500, FHA loans will account for ¼ of the mortgages in 2009. Between 2003 and 2006, only 4% of loans involved the FHA. The new model for FHA loans is more lenient with credit scores, requires as little as 3% down, may finance the closing costs, limits closing costs to 1% of the mortgage, has no prepayment penalties, and has relaxed the debt-to-income ratios.
However, the Federal Housing Administration (FHA) must approve lenders and appraisals. Buyers with less than 20% down payments must pay Mortgage Insurance fees and monthly Mortgage Insurance premiums that together may increase the loan by 2.25%. If buyers have financial reserves, savings, or investments worth two months of mortgage payments, they will get better rates. Buyers with a 30 to 33% debt-to-income ratio also best rates.
More buyers are turning to credit unions these days. Most credit unions never got involved in the subprime loan industry. Nor did they sell and repackage their loans as investments. Unions normally offer fixed rate, 30-year mortgages, many times at rates lower than the banks. If a buyer banks with a credit union, they generally receive preferential treatment.
Other buyers may find a good deal for “rural” home loans. These loans are for people in designated rural areas where the population is less than 20,000. Backed by the USDA Rural Development Housing and Community Facilities Program, they do not require borrowers to grow crops or raise livestock. These loans are limited to buyers with incomes less than 115% of the household median income for the area. The USDA programs include loans with no money down, construction loans, and more.
For low- to moderate-income families, it is also worth checking into options offered by the city, the county, and the state. Jonna Beardsley of Breckenridge Associates offers a wealth of information about Colorado Rocky Mountain real estate. Call Jonna at (970) 453-2200 for friendly, professional assistance.
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