There Are Many Different Colorado Mortgage Options Available
There are hundreds and hundreds (850+) of different types of loan programs available to homebuyers.
Each of these loan programs has a set of rules that must be known and followed by your mortgage consultant as you work towards qualifying for a new home loan.
These rules address such diverse issues as:
- Acceptable credit score and history.
- Allowable debt to income ratios (front- and back-end ratios).
- Eligible and ineligible property types.
- Rules for documenting income for all types of borrower's income (salary, commissioned, self-employed, etc.).
- Eligible and ineligible borrowers.
- Allowable loan to value (LTV) - this means how much you'll have to put down on your new home - it can range from 65% LTV (putting 35% down) to 100% LTV (putting nothing down, but still paying closing costs) to 103% LTV (putting nothing down with many, if not all, of your closing costs included in your new home loan).
- Allowable combined loan to value (CLTV) - what if any configurations are available to avoid paying private mortgage insurance.
- The rules and rates for applying mortgage insurance.
- How much the home can be worth.
- The maximum loan amount allowed.
- Where the home can be located (e.g., mountains or not) and how much land can be included.
- Some of these rules can change in different situations. For example, if you have stellar credit, you may be allowed a larger debt-to-income ratio and a larger loan amount.
- And the list goes on and on. This is one reason it is so important to work with a mortgage consultant who knows what they're doing and is willing to tell you the truth about your options. Regardless of what the person you talk to says about your ability to get a home loan, there is an objective set of rules that applies to your situation. If you don't meet that set of rules, you won't get the loan.
- These rules are universal - they do not change from lender to lender based on any given type of loan. What does change from lender to lender are the types of mortgages offered, as well as the quality of service.
One of your mortgage consultant's responsibilities is to help you understand which home loans might be a good fit for your situation and financial goals, and what the rules are for each of your home loan options.
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