Sara’s first concern was how much money would they need? Ideally, the more they have available for a down payment, the better their interest rate will be. I explained to her, that new loans are currently running the gamut of 0% down to 20% and everything in between. I am an advocate of more is better and that ideally there will be enough left over to cover two or three months of living expenses. That gives you a big chunk of personal equity in your purchase as well as the most favorable rate available from the lender. For many first-time buyers, including Sara and Mitch, with good credit history, lenders are willing to finance between 95 – 100 percent of the loan. In an increasing housing market, equity can be established within a few years of home ownership. The problem with this thinking is that in recent years markets in many parts of the country are no longer appreciating. If in fact, the housing market is declining so this type of financing can become very unnerving.

An alternative for Sara and Mitch, who are first-time buyers with excellent credit, is be to pursue CHFA financing. CHFA, the Colorado Housing and Finance Authority, provides low interest mortgages to qualifying buyers. The next step for Sara and Mitch is to meet with the lender we have referred them to for details on a loan that will work best for them. That will be followed with a consultation in our office and soon, the process of hunting for their first home will begin in earnest. ……….ah, the joy of anticipation!

If you would like information on buying your first home in Denver or any other aspects of the Denver real estate market, call a TeamCox member today at 303-400-6060. We will have the answers to all of your questions.