Colorado Springs Mortgages for First Time Home Buyers

The Colorado Springs real estate market, like the rest of the nation, has seen a HUGE shake up in the mortgage industry. Less people qualify for home loans and refinances are harder to get (which has led to an increase in Colorado Springs foreclosures).

Many people that we have talked to lately, are under the (mistaken) impression that there are very few loan options for first time home buyers. This is not true. Although loans ARE harder to get than they were several years ago (and for good reason), there are some GREAT options for mortgages for first time home buyers in Colorado Springs.

First Time Home Buyer Mortgages in Colorado Springs

VA Loans for Colorado Springs Military

VA Loans are available to soldiers and officers of any United States Armed Forces Branch and are a VERY popular option for someone looking to buy a home for sale in Colorado Springs, Fountain or Monument – seeing as we have about 6 military bases in the area. A VA Loan is a guarantee from the US Department of Veteran’s Affairs, whose mission is “to help veterans and active duty personnel purchase and retain homes in recognition of their service to the Nation.”

For El Paso County, a first time home buyer can buy a home up to $417,000 for ZERO DOWN (as of 11/2008). This is AWESOME, considering the average home price in this area is about HALF that. You will have plenty of great homes to choose from.

FHA Loans

Currently, the best loan available for first time home buyers in Colorado Springs is a FHA loan. A FHA Loan is a government backed loan and does not have a minimum credit score for a first time home buyer to qualify. They base their qualifications off of a variety of different factors. FHA interest rates are generally quite competitive, but you will need to put 3 perent down. (As of January 1, 2009 the minimum down payment will be 3.5 percent.)

“What if I don’t have the 3%- 3.5% down payment?”

If the average home price is about $200,000, then the needed down payment would be $6,000 – $7,000. Not everyone has thousands of dollars just sitting in a savings account – especially in this market. One option is to get a “gift” from a friend or family member. Another option is to get the money from another account that may be available to you (IRA, 401k, etc.)

However, if you don’t have a 3% down payment saved in your bank account and cannot access it through other means, then you may be interested in down payment assistance:

Down Payment Assistance Loan

One way to get 3 percent down is though another government program called CHFA. CHFA is the Colorado Housing Finance Authority (CHFA), and they will will loan a first time home buyer 3% for a down payment. The 3percent is a LOAN. But there are 3 nice advantages to this loan (besides the fact that it helps you buy a home).

First, this loan is INTEREST-FREE. Yes, a real, live interest-free loan. Whoo hoo!

Second, you don’t have to make any payments on this loan.

Third, you do not need to even pay it back until you:

  • Pay off the original mortgage, or
  • Refinance the original mortgage, or
  • Sell the home

The CHFA 3% down payment assistance is a great option when looking to buy a home for sale in Colorado Springs as a first time home buyer.

Down payment Assistance Real Estate Bond Money

Another option to getting the needed 3 percent-3.5 percent down payment for a piece of Colorado Springs real estate is Bond Money.

Bond money is available through different programs through local governments. Some include:

  • El Paso County Bond and
  • Pueblo County Bond

Bond money is available to help first time home owners come up with the down payment in the county the home is purchased in.

So, if you are a first time home buyer in Colorado Springs, you definitely have options.

For more information on how to qualify for a mortgage if you are a first time home buyer in Colorado Springs, please contact Marcy Langlois at Colorado Capital Bank: 719.660.2691