Category: Colorado Springs Mortgage

Colorado Springs Mortgage – Getting Rid of PMI

February 13th, 2018 by

"Mortgage

Colorado Springs Mortgages - Getting Rid of PMI

I’ve been in the Colorado Springs home loan business for 18 years, and have seen the market cycle a couple of times. As a lender, I’ve helped residents of Colorado Springs secure home financing such as VA Loans when the market has been hot and when the market has been cool. Either way, there’s never a bad time to own your own home. It’s a good idea as a home owner to watch out for certain events to occur such as when the market heats up and market home prices increase. By being aware of the local housing market, and taking advantage of them, you can move ahead of others on the curve of paying off your house and making the most of your home’s equity.

When home prices increase, we as homeowners will experience equity jumps in our local housing market. If you purchased your home with an FHA home loan, or a Conventional home loan such as Fannie Mae or Freddie Mac, you may be paying mortgage insurance when you don’t have to. Mortgage insurance is also known as PMI, and generally once your home’s value is more than 20% than what you still owe on your mortgage, you are eligible to refinance to a mortgage without PMI, saving you a ton of money.

If you did not put down 20% or more on your home, then you are paying mortgage insurance. This insurance that is added to your home payment is an insurance policy that is required by the lender, but it covers the lender’s liability, and does not cover you for anything. Bottom line is you have to pay for it, but there is no benefit to you, so it’s best to get rid of it as soon as you are eligible.

Times like now are a good time to review your mortgage, see if you are paying for something you don’t need, and get it removed either by refinancing or talking to the right people to have it removed.

Call the mortgage experts at Fidelity Mortgage Solutions and we’ll be happy to give you a free review of your mortgage and give you the correct advice for your mortgage and home’s equity.

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First Time Home Buyers: What Are Lenders Looking For To Qualify Someone For A Home Loan

April 11th, 2017 by

First Time Home Buyers: What Are Lenders Looking For To Qualify Someone For A Home Loan

 

Lenders look at potential borrowers similar to the way that you would look at someone that you were going to lend $200,000 dollars to.  But we can break it down into 4 basic criteria that you should know as you start going through the process of buying a house in Colorado Springs.

(LTV) Loan to Value

LTV is a simple percentage of how much you want to finance versus the value of the house. For example, if you want to buy a 200,000 dollar house and want to put down 3.5% ($7,000), then you would be financing 96.5% of the value of the house.

Equity Mortgage Loans in Colorado Springs, CO

VA loans do not require a down payment, but FHA loans and Conventional loans usually do, anywhere from 3.5% to 5%.

Credit Score

Credit tells the lender if you have paid people back when you’ve used credit before. They look at your credit score and your payment histories on each trade-line.  They also look for any bankruptcies, foreclosures, judgments, and collections.  These may not exclude you from buying a house, but they will just factor into the final decision depending on the loan product you choose.

(DTI) Debt to Income ratio

DTI is a simple percentage calculated by the amount of monthly bills that you have on your credit report compared to your monthly gross income each month. So if you have $2500 dollars in bills each month and you show $5000 dollars of income each month, then you are at a 50% debt to income ratio.  Most home loan programs would like to see you at 50% or lower.

Savings

Reserves show the lender that you can save some money for those unexpected hard times that everyone goes though at some point. If you have 1-2 months of money saved up, then you will be more prepared to make a house payment even if you lose your job for a month or two.  Most programs don’t require any reserves, but the more you have, the stronger your loan application will be.

Most loan programs have several hundred pages of guidelines for underwriters to follow to approve the loans.  But in general, these 4 items are where they start.  Being a knowledgeable home buyer will improve your chance of getting approved, and getting the correct loan product that fits your needs the best.

Call Fidelity Mortgage Solutions today and we will give you a free analysis of your situation, and fit you to that best product.