Getting Started
In the past Denver mortgage options were limited to 30 year fixed mortgages with 20% down. Today there are many different loan programs to choose from along with options to put less than 20% down on the purchase of your home.
There are several factors to determine which program is best for you, however based on how long you plan to stay in your home and your risk tolerance, there are opportunities that can save you hundreds of dollars on your monthly payments.
Expected Time in Home |
Our Recommendation |
|---|---|
| Not Very Long (1-3 Years) | 3/1 ARM, 1 year ARM or 6 month ARM |
| A few years (3-5 Years) | 5/1 ARM |
| At least 5 years (5-7 years) | 7/1 ARM |
| Around 10 years ( 7-10 years) | 10/1 ARM, 30 yr fixed or 15 yr fixed |
| A long time (10 plus years) | 30 year fixed or 15 year fixed |
Loan Programs
Monthly payments won’t change
- Interest rate fixed
- Protected if rates go up
- Can refinance if rates go down
Advantages
- Higher interest rates
- Higher mortgage payments
Rate does not drop if interest rates improve
Adjustable Rate Mortgages(ARMS)
- Lower initial monthly payment
- Lower payment over a shorter period of time
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
- More risk
- Payments may change over time
Potential for high payments if rates go up
Construction Loans
- Whether you currently own the land or intend to purchase and build
- Risk of rates being higher at the end of the initial fixed period
- Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
First Time Buyer Programs
- Lower down payment
- Easier to qualify
- Sometimes you may get a lower rate
- May be subject to income and property value limitations
- Some programs which have government subsidies may have a recapture tax if you sell the house too early.
Stated Income Programs
- Don’t need to verify income
- Faster approval
Higher rates
Higher down payment
No Point, No Fee Programs
- No closing costs
- Less money required to close
Higher rates
Higher payments
Imperfect Credit Programs
- Potential for reestablishing credit if you pay your mortgage on time
- When used for debt consolidation, you may be able to reduce your monthly debt payment
Higher rates
- Terms may not be as favorable
- Harder to get long term fixed loans
- Loans may have prepayment penalties
