What are the advantages of getting pre-approval for a loan to buy a home and why is it so important to get pre-approved for a loan? Typically a first time home buyer will get the itch to buy a home.  Perhaps they’ve been considering and planning this for a long time.  They call a Realtor to go look at a home they’ve found on the internet and the first thing they ask is, “have you been pre-approved for a loan?”  Whoops! Roadblock! So, why is this step in the home buying process so important and what are the advantages?

Save Time by Looking at the Right Homes

If you’ve been searching for homes on the internet or you’ve been setup by your favorite Realtor to receive automatic e-mail listings of available homes, you can ask him/her to change your search criteria to match the selection of homes in the price range that you’ve been pre-approved for. This way you can save your time by checking out homes that you can actually afford to buy.

Focus Your Time Examining the Right Homes

By decreasing the inventory of homes to those that fit your criteria and price range, you can spend your time thinking about the little nuances each home has to offer. Instead of spending your time looking at homes that are out of your price range, you can focus on the details that matter to you in choosing a home.  Are the bedrooms large enough? Will my car fit in the garage?

Gain Negotiating Power

Now when you find that perfect home and you want to put an offer in to purchase, no one can take that away from you by saying you can’t qualify. When your Realtor presents the offer to the seller or the seller’s agent, they will also present your pre-approval letter from your lender. That is one more powerful advantage your offer may have over a competing offer.  You’re giving the seller peace of mind that if they accept your offer, this deal will more than likely close vs. falling apart because the buyer can’t get a loan.

Gain Confidence and Avoid Disappointment

Let’s face it, buying a home can be a very stressful process.  You can minimize your anxiety by getting pre-approved. You can have the confidence that when you find that perfect home, you will be able to qualify for the loan. You can sleep better a night, because there shouldn’t be any last minute surprises.

Enjoy a Faster Closing Period

Because you’ve already met with your lender and submitted all of your paperwork, the entire process can go a lot faster. The lender can order the appraisal right away. The lender will make your deal a priority because they’ve already completed most of the hard work. It’s possible to close the transaction in 2-3 weeks vs. the typical 30 days that it takes to close a transaction.

Typically obtaining loan approval is the longest contingency in your purchase contract. So, by getting pre-approved for your loan, your process will go a lot faster and smoother.

If you’re thinking about purchasing a home and would like to speak with one of the lenders that we work with, get in touch and we’ll hook you up with a reputable lender.

The Colorado Association for Manufacturing and Technology will be working with site selection experts in Denver to find a location for a proposed 200-acre manufacturing and research park.

The park could reportedly house up to 100 businesses and create 10,000 jobs, according to CAMT. The idea is that companies would share facilities for research and manufacturing. NASA has apparently developed technology that could be turned into products with commercial uses in clean energy industries to be manufactured at the facility.

Estimates by CAMT indicated that the proposed “Aerospace and Clean Energy Manufacturing Innovation Park” could create as much as $7 Billion per year in economic output for Colorado. Representing a welcome addition to community coffers and job-seekers alike.

In addition, a surprising rush of interest by many of the proposed backers may force a quicker move than most had anticipated. CAMT executive director Elaine Thorndike said more than a dozen out-of-state companies have inquired about locating to the park. In response, they have opened up from working exclusively with one developer to now working with many site selection experts because they “had more options and much greater interest than they had anticipated”.

READ ENTIRE ARTICLE HERE

Buying your first home in Denver, Colorado can seem like daunting process. In many cases buying a home represents the single largest purchase most people make in their lifetime.  With that being said, it is important that you take the right steps and make sure you are making the right financial decision, which more than likely is a decision that you will live with for a long time. Follow these 5 Steps to Buying Your First Home in Denver, Colorado and you will be well on your way to achieving your dream of home ownership.

Step 1:  Begin with a self analysis. Determine the area that you want to live in. Does it need to be close to your work? Close to schools? Shopping? Think about your lifestyle. Do you spend a lot of time at home? How many bedrooms and baths do you need? Do you need or want a yard? Or do you want maintenance free living such as a condo or townhome?  The answers to these questions will help narrow your search and focus on what your real requirements are.  Many times when I work with first time home buyers in Denver, they have big dreams and they haven’t spent enough time to really analyze their needs.

Step 2:  Find a real estate broker that you are compatible with and will represent your interest. All brokers are not made the same. Spend some time upfront interviewing real estate brokers. Find one that has experience in the type of property that you are looking for and in the area that you want to live. How do you do this? Ask friends and relatives if they’ve worked with a Realtor recently. Stop in at open houses and you can get a pretty good feel right away if the Realtor holding the open house is professional. Talk with them and ask them questions about the market, about financing and about the different types of agency representation.

Step 3: Find a lender and get prequalified. There are hundreds of lenders to choose from in the Denver market. How to choose the best to work with? Ask your Realtor. If you have chosen the right real estate broker, they should be willing and able to refer you to a lender that will provide outstanding service. I tell buyers all the time, “finding a lender that has the lowest interest rate is not the most important thing, finding a lender that will do what they say they will do and will return your calls and provide you with excellent service is the most important consideration.”  I think everyone will agree, there’s a lot of people and businesses out there, and not only lenders but every type of business, that will make you a lot of promises but do not deliver as promised.  Why is it important to get pre-qualified? The most important reason in my opinion is, if you find a property that you want to buy and you’re ready to put an offer in, your real estate broker will want to submit your pre-qualification letter from your lender with the offer.  When a seller is reviewing your offer, the pre-qualification letter is evidence that if they accept your offer, then the potential for closing is much greater than accepting an offer that does not have a pre-qualification letter.  In addition, the pre-qualification process gives you and your broker a limit or range of price and what you can actually afford.

Step 4:  Find a property and make an offer. In the process of searching for your first home in the Denver, Colorado market, you will want to become very educated with values. You will more than likely be searching for homes on the internet and looking at homes with your real estate broker.  Once you’ve found a home that fits your needs, you’ll make a written offer, which of course your real estate broker will write up for you. Once the offer is accepted, the lender will get a copy and you’ll start the process. It’s important to get home inspection. It’s also important to understand and adhere to the dates and deadlines in your contract.

Step 5:  Closing of your loan and moving in. The last step in buying your first home in Denver, Colorado is signing all of the paperwork and making it officially your home. Your real estate broker will setup the closing time with the title company and you’ll sign a lot of papers. So, make sure your signing hand and fingers are all loosened up.  Once everything is signed, the home becomes officially yours and you’re ready to move in.

Congratulations! You’ve just purchased your first home.

These three homes in Aurora are located in the 80013 zip code which has been very active as far as homes being bought and sold. All three of these homes are in the $130K-$140K price range, and all of them have lots of potential.

Take a look at the video below to see a property with lots of potential.

There are millions of homeowners who are looking for answers and don’t know what to do. They are not alone and there are people with resources that can lead them in the right direction. As a Certified Distressed Property Expert, I have training and experience in providing solutions to homeowners facing financial hardship. There’s an overwhelming amount of misinformation about the options available, especially short sales. To give you a better idea of the short sale option, and to set straight some of the myths you may have heard, I’ve decided to post this blog to clear up some misconceptions. Hopefully this post will clarify the following myths:

Myth #1) The Bank Would Rather Foreclose Than Bother With A Short Sale This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.
The qualifications for a short sale include:
• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Myth #2) You Must Be Behind On Your Mortgage To Negotiate A Short Sale While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3) There Is Not Enough Time To Negotiate A Short Sale Before My Foreclosure This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.
The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4) Listing My Home As A Short Sale Is An Embarrassment It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5) Short Sales Are Impossible And Never Get Approved This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not. For example, agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6) Banks Are Waiting On A Bailout And Not Accepting Short Sales You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.
Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”

Myth #7) Buyers Are Not Interested In Short Sale Properties This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.
For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

In conclusion, these ideas are potentially harmful to homeowners seeking real solutions. I hope you’ll review this information for yourself or share it with a homeowner in need. In these times, we all need to know the truth to know how to get back on track.

Recent home buying trends are showing that there are more home loan applications right now than there have been in the past few months. Along with that rise in home loan applications, interest rates on home loans have dropped below 5 percent on a 30-year fixed mortgage, according to one industry group.

The increase over the past few weeks marks approximately an 8 percent increase in mortgage applications since the previous year. This is good news, as the housing market around the country has been hit pretty hard during the current economic crisis. This increase suggests that the housing market is starting to stabilize, after having been in a slump for the past three years.

Still, there is always the possibility that we may not be entirely out of the woods. Some argue that the government programs, such as the new home buyer credit, have propped up the market, and that the market will turn sour again once the program expires at the end of November. There is talk in Washington of trying to extend the program well into 2010.

The rise in the past few weeks comes on the heels of an unexpected rise in the sale of previously owned homes in September, according to statistics provided by the National Association of retailers. Previously owned home sales were at their highest levels in three years, in part because consumers are scrambling to meet the November 30 deadline.

In addition to the new home buyer tax credit, there are other factors that have contributed to the rise in new home loan applications, as well. Not the least of these is the drop in interest rates.

Along with those new home applications, rates have dropped significantly. The average rate on a 30-year fixed mortgage was 4.97 percent at the end of October. While this was still higher than the low of 4.61 percent set in March of this year, these rates are well below the 6.47 percent average of just one year prior.

Refinancing is also increasing, by almost 15 percent in October. These low interest rates are, at least in part, responsible for the increase in refinancing loans.

If you’ve been living in a rental property or apartment, you may not have given much thought to buying a new home. Sure, friends and relatives bug you about getting your own place, but you haven’t necessarily seen a good reason to do so.

Buying your own home, however, has several distinct benefits, each of which is appealing in its own right. Here are just a few:

Appreciation

While real estate values do cycle, overall real estate grows in value. Over the decades, real estate appreciation is consistent. Home ownership can be something of a hedge against inflation.

Tax Considerations

Buying a home has some huge benefits in terms of your taxes. As long as you owe less on your mortgage than your home is worth, you can deduct your interest from your tax return. This can add up to big bucks, as the largest portion of your mortgage payment goes to interest.

You can also get another tax benefit from buying a new home. As long as you have lived in a home for two of the previous vie years, you can reduce your capital gains. Specifically, you can exclude up to $250,000 for an individual or up to $500,000 for a married couple. There is no requirement to buying a replacement home, and there is no age requirement. You can do this every two years, which means you could literally buy and sell a home every two years (under those amounts) tax free.

In addition, if you get more profit than the allowed exclusion when you do sell your home, the profit is considered to be a “capital asset,” which gets preferential treatment for tax purposes.

Finally, you can also deduct property taxes for your home.

Equity

One of the best reasons to buy a home is to build equity. Every month when you make your mortgage payment, part of the payment goes to the principal. As you pay more of your mortgage, you build up a difference between what you owe on your loan and what the home is worth.

Eventually, you can use that equity for a number of purposes. For example, you can take out a home equity loan, which will allow you to get cash for home improvements, medical bills, start a business or even pay off credit cards.

More and more, new home buyers are taking advantage of the FHA-insured home loan options. These loans are insured by the Federal Housing Administration, and have some very specific benefits for home buyers.

The principle behind the FHA home loan is to be able to help families of moderate to low income level become homeowners. The FHA home loan accomplishes this by reducing some of the costs involved. In addition, the loan protects the lender, and encourages the lender to make loans to potential home buyers who might not qualify using conventional underwriting metrics but that still have good credit.

FHA home loans are designed to get families into homes with very little cash out of pocket. However, there is talk in congress that this may change. One bill would change the amount that a buyer is required to put down as a down payment. Currently, FHA home loan borrowers can buy their home putting down 3.5 percent and closing costs can be wrapped into the loan. The bill would raise the cost to 5 percent, and prevent buyers from wrapping in the closing costs.

Depending on the situation, this could astronomically increase the amount that a home buyer would need to put up to get their home. It could go as high as ten percent, including five percent for the down payment and around five percent for closing costs.

The bill’s sponsor, Representative Scott Garrett of New Jersey, says that the bill is “is aimed at shielding taxpayers from the risk that the FHA portfolio presents.” Whether or not the bill would accomplish this is, of course, being fiercely debated. Home buyers and lenders alike are waiting to see what happens.

If you’re thinking about trying to get an FHA loan, there are some things you can do to get ready. First, recognize that each lender sets its own terms on loans, so it pays to do some comparison shopping.

You should also recognize that the lender will want to make a decision as to your risk. They’ll look at your credit history and your debt-to-income ratio, just like if you were applying for a traditional mortgage.

You’ll need to have the same kinds of paperwork ready, too. You’ll need employment documentation, and for an FHA loan need to have been employed for two years in the same field. You should be aware of your credit score, and know that it should be above 620 if you hope to qualify for an FHA home loan.