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This guide outlines the steps you can take to help secure your dream home and your ideal home loan. With this information, you can gain knowledge and confidence to help you reach your goals. If you have any questions, please don't hesitate to ask your loan officer.
Down payments are usually between 3.5%[cite::158::cite] and 20% of the purchase price of a home. The size of your down payment will help determine the type of mortgage loan that's best for you.
In general, a larger down payment can help you avoid paying mortgage insurance. This type of insurance may be required when you have a down payment of less than 20% of a home's purchase price.
To determine the price range of home you can afford, use the worksheet below to figure out your debt-to-income ratio. This ratio shows how much of your monthly income would be used to pay debts.
Mortgage lenders look for debt-to-income ratios that are typically below 43 percent.
Once you've completed the tables below, recalculate them using a larger or smaller mortgage payment to see how it affects your ratio. The worksheet can also help you determine how paying off a credit card or auto loan would affect your ratio.
|MONTHLY EXPENSE FOR NEW HOME|
|Mortgage (principal and interest)|
|Homeowner's association dues||+|
|Monthly home payment total||$|
|MONTHLY DEBT PAYMENTS|
|Monthly home payment total|
|Other monthly payment total||+|
|Monthly debt payment total||$|
|ALL OTHER MONTHLY DEBTS|
|Home equity loan payments|
|Auto loan payments||+|
|Credit card payments||+|
|Student loan payments||+|
|Other monthly payment total||$|
|DEBT TO INCOME (DTI) RATIO|
|Monthly debt payment total|
|Gross monthly income||/|
|Debt to income ratio||=|
CONVENTIONAL FIXED–RATE MORTGAGE
A mortgage loan with predictable monthly payments for the life of the loan. Fixed rates available for conforming loan amounts. The interest rate is guaranteed to remain unchanged during the stated period of the loan. Any mortgage loan made without the guarantee of a government agency.
A mortgage loan where the initial loan balance is greater than Fannie Mae loan maximum which currently is $424,100. These loans typically require higher down payments than conventional mortgages. Fixed-rate and adjustable-rate mortgages are available.
ADJUSTABLE RATE MORTGAGE (ARM)
A mortgage loan where the interest rate is fixed for an initial period and then adjusts annually or as specified thereafter. The interest rate on an adjustable mortgage loan is typically lower than a fixed–rate mortgage prior to adjustment.
ONE-TIME CLOSE CONSTRUCTION LOAN
A construction–to–permanent loan to help build a single family residence. One closing for both the construction and permanent mortgage loans.
Government Mortgage Loans
FHA – FEDERAL HOUSING ADMINISTRATION LOANS A government guaranteed mortgage loan. FHA loans require a 3.5% down payment and the borrower must pay upfront and monthly mortgage insurance premiums.
VA – DEPARTMENT OF VETERANS AFFAIRS LOANS A government guaranteed mortgage loan available to service members, veterans, and eligible spouses. 100% financing is available. Mortgage insurance premiums are not required; however, borrowers must pay an upfront VA Funding Fee.
CHFA – COLORADO HOUSING FINANCE AUTHORITY Loan programs for home purchase or refinancing needs. Programs with low down payments or grants and second mortgage loans for down payment and closing. This ispayment and closing cost assistance are available.
UNITED STATES DEPARTMENT OF AGRICULTURE (USDA) RURAL HOUSING LOANS A mortgage program insured by the U.S. Agriculture Department. USDA Rural Housing Loans helps to provide home ownership opportunities in rural areas.
There are many important things to consider throughout the process, especially if you’re a first–time homebuyer. Click Here for some information that will keep you on track.
Whether you’re a first time buyer, or a seasoned real estate professional, we may have the property you’ve been searching for. Vectra Bank maintains a list of bank–owned properties that are for sale to the general public at extremely attractive prices. Go ahead, make an offer!
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Our friendly staff is here to help you with all your mortgage needs. We will use our expertise to find the right program for you. Please give us a call at: 800–737–6620 (Mon – Sat, 7am – 7pm MST), or complete the form below.