At some point, you probably have entertained the idea of paying off a house in full with cash. However, most people can’t afford to buy a home this way. While it might sound like a good idea to pay off your home immediately using only cash, a mortgage is a better option for several reasons. At Animas Mountain Mortgage in Durango, CO, we will walk you through the mortgage process and work with you to determine the best mortgage options for you!
If you are in the market to purchase a home, finding the best mortgage option can be intimidating. Thankfully, government loans have made home buying easier than ever before. In Durango, Colorado, Peter Pritchard of Animas Mountain Mortgage has detailed experience navigating the world of mortgages and is here to help you choose the right mortgage. There are a few different options for government loans, the most prominent options being a Federal Housing Administration (FHA) home loan, a USDA home loan, or a Veterans Affairs (VA) loan. Read on to find out the details on each!
FHA Home Loan
An FHA home loan is a popular choice for homebuyers because this loan type requires a low down payment, low rates, and flexible guidelines. But this benefit was not always in reach for homebuyers, says Dan Green of themortgagereports.com. In 1934, the country was emerging from the Great Depression, and only 2 out of 5 households owned their house. In that same year, the Federal Housing Administration was established as a response to difficult mortgage terms that made it incredibly hard to purchase a home. Mortgages at the time often required a 50% down payment and short loan terms of only 5 years. FHA home loans made it possible for hopeful homebuyers to affordably purchase a home anywhere in the country, in part by extending the loan term from 5 years to 15-30 years, and also requiring a smaller down payment, 3.5% compared to 50%. Thanks to the low down payment, homebuyers today can more easily budget for the costs associated with buying a home like moving expenses or emergency funds. This is a good option if you are looking to buy a home with less than perfect credit, as the FHA considers a borrower’s entire credit history instead of single credit events. There’s also a lot of flexibility to purchase the home you want, whether it be a condominium, mobile home, or a 2-4 unit home.
USDA Home Loan
This home loan was specifically designed to increase home ownership and economic development for low-income families in nonmetro, rural areas. This home loan goes by a few different names in addition to a USDA home loan, including a Rural Development loan, Section 502 loan, and a Single-Family Housing Guaranteed loan program. Regardless of the name, they all refer to loans that offer 100% financing, low mortgage rates, reduced mortgage insurance, and low or no down payments. For low-income families the down payment is often the most difficult part of purchasing a home, but thanks to the terms of a USDA loan, homebuyers can more easily and quickly become a homeowner. In addition to purchasing a modest new or existing home, this loan can also be used to renovate, repair, or relocate a home. Those seeking to buy a home with less than perfect credit will often find that they qualify for this home loan if they demonstrate a history of predominantly on-time payments.
VA Home Loan
The VA home loan is another affordable option for home buyers but is specifically made for those that served or are actively serving in the U.S. military. This program was created in 1944 as an effort to assist veterans in their return home from war. Regardless of whether you are interested in purchasing a new or old house, a condo, manufactured home, or duplex, the VA home loan can be used to purchase several types of properties. It can also be used to make energy-efficient updates, repairs, or improvements to your home. VA home loans also offer a unique amount of flexibility. Should you choose to sell your home, even right after you’ve purchased it, there’s no penalty for doing so. The most exciting features about the VA loan are the benefit of 100% financing, no need for mortgage insurance, and low or no down payments. Generally, getting a home loan requires a down payment, but for those eligible for a VA home loan no down payment is needed. Additionally, because the federal government guarantees the loan program, those that qualify for the VA home loan need not worry about mortgage insurance. Wondering about eligibility for a VA home loan? Read more here.
Peter Pritchard has been helping people achieve their dream of home ownership for over 15 years and has closed hundreds of loans throughout his career. Interested in learning more about your mortgage options? Call today to learn more! (970) 828-1610
Are You Ready to Buy a Second Home?
There are a lot of reasons that buying a second home could be a good fit for you and your family. While it’s important to consider financing, markets, and home prices, there are a few elements of your own life you should examine first before you pick out your second home. Peter Pritchard at Animas Mountain Mortgage in Durango, Colorado has been helping people achieve their dream of home ownership for over 15 years. Having closed hundreds of loans throughout his career, he has a few points for you to consider in your path to second home ownership.
Why to Buy a Second Home
An extra home. Owning a second home means you’ll have access to an extra space for activities and family events. Whether your second home is on a mountainside or a beach, you’ll have an extra space perfect for family reunions, summer/winter getaways, holidays, and more. People who purchase a second home often have an eye to their future as well, planning ahead for a place to spend their retirement. Some people choose their second homes as a final location for their retirement years, while others might plan to utilize both of their homes, moving between the two depending on the seasons.
An investment opportunity. Buying a second home as an investment opportunity is an added benefit to an extra home. While markets will always tend to fluctuate, there’s evidence that vacation properties weather well. In addition, owning a second home also gives you the advantage of a rental income. Time spent away from your second home offers the possibility to rent the space out, contributing dollars towards your mortgage.
Signs you are Ready to Buy
The ideal candidate to buy a second home is someone who is comfortable financially. Individuals that have paid off the mortgage on their first home, or who are very close to doing so, are in a good place to buy another home. Having a comfortable income is important because the rules surrounding purchasing a second home are a bit different than buying your first home. While your mortgage broker will be the one to get down to the specifics with you, generally speaking your down payment will need to be much larger than when you purchased your first home; at least 25% of the purchase price. There are a whole host of extra expenses that come with owning a second home, so it’s important to consult with your tax professionals and mortgage brokers to find the right fit for you and determine the right course of action to get you closer to your second home.
Age is another factor to buying second home, favoring people around their 50’s. People in their 50’s make great candidates for buying because they are often more financially stable, they generally don’t have small children that depend on them, and they have the time to dedicate to the upkeep of a second residence. Of course, circumstances vary between individuals, and if you are interested in buying a second home while you are above or below the age of 50, you should consult with your mortgage lender to see what options are available.
Are you interested in purchasing a second home? Peter Pritchard of Animas Mountain Mortgage in Durango, Colorado can help! Our beautiful mountain town is the perfect place for your second home. Find out more about making your second home a reality! (970) 828-1610
Works Cited:
http://www.hgtv.com/design/real-estate/buying-a-second-home-are-you-ready
http://www.moneycrashers.com/buying-second-vacation-home/
http://www.shamrockfinancial.com/6-reasons-why-buying-a-second-home-is-a-great-idea/
The decision to buy or rent a home can be daunting, but there are plenty of resources to help you make an educated decision. Peter Pritchard at Animas Mountain Mortgage in Durango, Colorado is here to help you through the process of deciding to buy a home! While there are surely upsides and downsides to both renting and buying a home, buying a home gives you access to freedoms you just don’t have while renting. We’ve put together some reasons why it might be worth it for you to consider purchasing a home. Continue reading
View my video review here. Unemployment Rate is Down again showing strength in the economy and sending interest rates higher. However the Philly Fed Manufacturing index came in negative which indicates a contracting economy.
I think the market is holding on to the low employment numbers and turning higher. However i believe this is only temporary as the overall economy is not showing the signs of strength the Federal Reserve is looking for to increase their overnight lending rates. Click here to watch my video review and see current Mortgage Interest Rates and Loan Products.
CPI was released this morning and came in much lower than the Fed would like. Interest rates are likely to stay low into the foreseeable future. Click here for my review.
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