It can be hard to get a Denver home mortgage in the best of times, which these aren’t, as you undoubtedly know already. While the slump in the Colorado housing market has the potential to be a great thing for a Colorado first time home buyer, the collapse of the housing bubble has also made banks and other lenders very skittish about the idea of taking on risk. While a Colorado mortgage lender may have looked at you as an excellent applicant until very recently, it’s now become nearly impossible for many Coloradans to obtain a Denver home mortgage, regardless of their credit history.
Is There A Silver Lining In This Cloud?
It may be tough to get a home loan right now – and if you do qualify for a Denver mortgage loan, it’s likely to be at a very high interest rate which you’d really rather avoid. Many lenders will also require buyers to put down a more sizeable down payment towards the purchase of their home than would have been the case in recent years. Certainly, it’s great to be able to make as large of a down payment as possible, but down payments of 20% and upwards are simply beyond the reach of many a Colorado first time home buyer, especially right now.
However, there are other ways to get a Colorado mortgage lender to give you the home loan you need to stop renting and start building equity in something which is truly yours. The federal government has a program which is designed to make home ownership an option for Americans who may otherwise not be able to take this step. The FHA (Federal Housing Administration) home loan program is one way that a Colorado first time home buyer can qualify for a Denver home mortgage and finally own their own home.
What Does The FHA Home Loan Program Do?
The FHA loan program provides federally backed mortgage insurance for people who meet the program’s eligibility requirements. The criteria are significantly easier to meet than those set by a traditional Colorado mortgage lender; credit histories are less of a hurdle, though it is true that not every applicant will be approved for this program.
With a FHA loan, it’s more affordable to begin owning your own home. In some cases, the down payment required of buyers at closing can be as low as 3.5%; and the buyer also does not need to purchase mortgage insurance, since the home loan is insured by the FHA. While it’s easier to buy a home through this federal program, it can still be a complex process which calls for professional help. If you’re a Colorado first time home buyer, you may want to work with a Colorado mortgage lender which is experienced in helping first time buyers through the FHA loan process and make their dreams of buying a home in Colorado a reality.
Why you must stop renting
