Category: First Time Home Buyer

Down Payment Assistance Programs (DPA) – Costs and Benefits

Posted on by madmin

If first-time buyers need down payment help, they can consider applying for Colorado’s CHAC program. CHAC offers low interest, flexible loans for buyers in both the low-income and moderate-income brackets. The program helps qualified first-time homebuyers obtain a second mortgage that can be used for down payment and closing costs.

The CHAC loan will close at the same time as the first mortgage. This loan that must be repaid, usually through monthly payments, and it may be prepaid at any time without penalty.

Additional Requirements

Applicant income restrictions are based on the Area Median Income or AMI. In most areas of Colorado, applicant income may equal 80 percent of the AMI. In Arvada, it’s 100 percent of the AMI. In addition, borrowers contribute a minimum of $1000 to the transaction, or $750 in the disability program. This money must come from the borrower’s own funds. 

Remember this is a loan and it will be serviced by the Colorado Housing Assistance Corporation (CHAC). Before applying for CHAC down payment aid, the homebuyer must complete CHFA/CHAC-approved classes for first-time homebuyers. See CHAConline.org for more information.

How Do You Apply for CHAC?

CHAC partners with your primary lender. You will apply for CHAC through your first mortgage lender. After you select your mortgage package and the property goes under contract, the primary lender will apply to CHAC on your behalf. Terms vary depending on the primary loan package. The terms of your CHAC down payment package could be different from other borrowers. Although CHAC will communicate with you through your lender, you are always welcome to call CHAC directly if you have questions.

Finalizing the CHAC Loan

After the CHAC loan is approved, you will need to sign several documents and legal disclosures. The details of your CHAC loan, including the amount, the terms, and the fees will be revealed on these documents. In addition, CHAC may request you to certify some information. Examples include:  

  • Proof that you have not owned interest in a principal residence for the past three years
  • Promise that you intend to occupy the new property as your primary residence
  • Certification that you do not own other residential property
  • Full disclosure of the income and assets of all persons who will be occupying the home
  • Proof of legal residency for all members of the household

The requested signed documents need to then be returned to CHAC. Then you will attend a borrower counseling session in person or via phone.

Apply Now

To help you find the best mortgage for you, contact Springs Home Mortgage. Contact Keith Courlas at 719-470-0898 to take your first step. Springs Home Mortgage, 5585 Erindale Drive Suite 201, Colorado Springs, CO 80918. 

What Every First-Time Home Buyer Should Know

Posted on by madmin

Let’s discuss some important home loan information for first-time home buyers. When first time buyers delve into financing, they can bump into unexpected delays. That’s why the team at Springs Best Mortgage encourages new buyers to learn the ropes before shopping for homes or mortgages.
Remember, you want a manageable loan with monthly payments that fit your budget. Contact us to sit down and go over the basics. We adjust our guidance to fit your goals and circumstances. We can suggest reputable real estate agents and help with negotiations. Watch how Springs Best Mortgage goes all-in to make the home loan experience start a beautiful new cycle for you and your family.

Pre-Approval Process

The process begins with loan pre-approval. Zeroing-in on the best loan package will give you the best preparation. Springs Best Mortgage will discuss several loan options. Then it’s time to apply for pre-approval from your chosen lender. During the process, lenders will ask for details about your financial life. Lenders will need to see your personal information when you ask for pre-approval. They examine your income, assets, debts, liabilities, and credit score and history. Pre-approval puts you in charge of your time and money.

How Does Pre-Approval Help You?

Pre-approval is free and to your advantage. In fact, don’t even look at homes for sale until after you know how much the lender approves for your mortgage.  Here are some advantages of pre-approval: 

  1. You will know which price range of homes to include in your search. (Or you may decide to go for less expensive homes so you have more discretionary income for travel, private schools, furnishings and landscaping, etc.)
  2. Pre-approval convinces sellers of your earnest desire to buy a home. You might say it is a superior bargaining card in today’s competitive market.
  3. The pre-approval process may alert you to problems with your credit score, funds on hand, or documentation and give you time to fix these issues.
  4. Pre-approval gives you the ability to estimate money needed for down payment and closing costs.

Upfront Costs of Buying a Home

First-time buyers often do not understand transaction costs. At closing, about 3-5 percent of the mortgage value is charged for closing costs and lender fees. Regular closing expenses may be charged to cover loan fees, insurance, taxes, title charges, recording charges, and application fees. Occasionally, the seller or a family member may pitch in to cover these costs.  However, your own savings helps keep your options open. 

Keep in mind that your savings will improve your financial clout. A good down payment may not always be necessary but it sure helps save on interest costs over the life of the loan. 

The Loan Process: What to Expect

Think about the home loan process as climbing a flight of stairs. We’ll show you how to take them lightly. Expect several steps like these:

  1. Initial Meeting
  2. Application
  3. Gather Documentation
  4. Get a Home Appraisal
  5. Underwriting
  6. Conditional Approval
  7. Processing
  8. Final Underwriting
  9. Closing

Apply Now

If you are looking for a home loan in Southern Colorado as a first-time buyer, call Keith Courlas at (719) 470-0898 to take the first step. Springs Home Mortgage, 5585 Erindale Drive Suite 201, Colorado Springs, CO 80918.

Apply Now

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