08 Nov

First-Time Homebuyer Mistakes to Avoid

First-Time Homebuyer Mistakes to Avoid

Buying your first home can be exciting and stressful. You are finally going to be able to call a home your own, but must also pay the price that comes with that ownership – the mortgage. While there are many things to consider before and during your home buying journey, RMLEFCU is here to make the whole process a bit easier with these first-time homebuyer mistakes to avoid.

Ignoring or Not Knowing Your Credit Score

Before you even begin planning to buy a home, you must first know if you are financially able to do so. Do you have enough money to pay for the house in cash? If not, how good of a loan will your credit score allow you to get? These are the hard, but important, questions to ask yourself when determining if you are ready to own your own home.

The first, and most basic, step to determine your financial ability, is knowing your credit score. This is the score that banks will look at when determining which home loans you qualify for and, ultimately, which houses you will be able to afford. By being aware of your credit score before meeting with a mortgage consultant, you will be able to more easily communicate your concerns and desires with them and are more likely to be happy with the result.

Looking for a Home Before a Loan

Being realistic about what you can afford is just one of the harsh truths that you must face while buying a home. By looking for houses before you know what kind of loan you qualify for, you may be setting unrealistic expectations for yourself. Instead, know where you stand before you start shopping. Visit our website or come into a RMLEFCU branch and have a financial discussion with one of our mortgage specialists to get pre-qualified for a home loan amount before you start looking.

Being Too Picky

Finding your dream house in your price range is really only a thing of fairytales. Make a list of what’s important to you in a home and decide what you need and what you can sacrifice on. For example, a great school district and large yard might be deal breakers if a home doesn’t have them, but you could maybe live without the dual master bathroom sinks and extra-large walk-in closet. It’s all about finding the happy medium between price and features.

Assuming Your Mortgage is the Only Expense

A common mistake some people make when budgeting for buying a home, is assuming that the mortgage payment will be their only expense. There are many other costs to take into account, such as property insurance, property taxes, maintenance costs, and homeowners association dues (if your residence has them). All these smaller, less significant costs can add up quickly when it comes to home budgeting and affordability. It’s best to over-budget and anticipate for more expenses early on so you’re not left blindsided and broke if anything changes in your financial situation.

The bottom line is that there more first-time home buying mistakes to avoid than you might have originally thought. It’s always better to be over-prepared, and that’s why we’re here! RMLEFCU is ready to help you finance your first home when the time comes and we have the experts here to get it done right. Visit our website or give us a call to get started and see how easy your first-time home buying process can be!

19 Jul

Colorado First Time Home Buyer Tips

colorado first time home buyer

Getting ready to buy your first home can feel a bit like a trip into the unknown – one with pretty high stakes too. By taking the process in stages, you can be sure that you are prepared to take the plunge and properly prepare your finances before the big purchase. Read our Colorado first time home buyer tips to get you started on your path to homeownership.

Get Your Credit Score Up

Buying a home is likely going to be the biggest purchase of your life, so getting a good interest rate will make a huge difference in how much you pay over the life of the loan. Your interest rate is largely determined based on your income and your credit history.

Get your credit score up as high as you possibly can before applying for a mortgage. If your score is low, it is worth it to take some time to work on it. Your score will have a big impact on your interest rate. Check out our credit builder loan to help improve your credit.

A good place to start if you want to get your credit score up is to get a full credit report. This will tell any about any outstanding debts, how long you have had all of your accounts, what your total debt amount is, and will even tell you what’s hurting your score and what’s helping. Take the advice seriously and fix the things you can, like paying off outstanding debt and cutting back your credit card spending. In the months before you apply don’t make any changes to your credit, such as take out a new credit card or apply for anything that might run a hard credit inquiry, this can cause dips in your score.

Get Pre-Approved for a Loan Before You Look

Don’t fall in love with a house you can’t afford! Before you even start to look, meet with a loan officer and get pre-approved for a mortgage amount. Have the loan officer show you what your monthly payment would be at different loan amounts and settle on an amount that is comfortable for you to pay back. Remember – you don’t have to use the total loan amount you are approved for!

Once you start looking, save yourself some pain and don’t go see houses you can’t afford or that would be at the top of your budget. If you are using a realtor, be firm on what your ceiling is. Trying to afford a house out of your reach won’t end well. With enough patience, everyone can find a home that will work for them in their price range.

Pick an Area or Neighborhood & Don’t Settle

You know how they say location, location, location? Well, it’s true how important it is – location is everything. Pick a town or neighborhood you want to live in and stick to it. Weigh your commute to work, proximity to amenities and hobbies, and even the crime rate and school districts.

Is there a part of town you would hate to be in every day? Avoid looking at houses in that area. Is there a neighborhood you would love to live in but are worried you can’t afford it? Just stick with the hunt and go see houses right when they come on the market. With a little luck and patience, you might be the one to snag that rare deal.

Colorado First Time Home Buyer

The Colorado landscape changes quickly and can be intimidating for seasoned investors, let alone first time home buyers. Prepare for your first mortgage as early in your financial life as you can and find a few trusted professionals like us to help along the way.

17 May

Getting Your First Mortgage Through a Credit Union- Lower Rates and No Mortgage Insurance

Mortgage Through a Credit Union

When it comes to buying your first home and applying for a mortgage loan, finding your dream home is only half of the battle. There is the task of making sure you understand all the requirements of applying for a loan, figuring out what type of mortgage is best for you, and making sure that your lender has your best interests in mind. Buying a home is probably the biggest purchase you will ever make, so there is a lot at stake when choosing a lender.

All of these reasons are why getting a first mortgage through a Credit Union like RMLEFCU is becoming more and more popular. Credit Unions operate very differently than big, private banks and in turn can offer you better service, lower rates, lower origination fees, and NO mortgage insurance if you’re putting down less than 20%.

Yes, you heard correctly! NO mortgage insurance required.

No Mortgage Insurance (PMI)

For many first time home buyers, the biggest obstacle to getting the ball rolling is the intimidating task of saving up 20% of the home cost or facing a monthly charge of $100-$300 for mortgage insurance. At RMLEFCU, you can have your cake and eat it too!

Is it up to the lender whether to charge mortgage insurance on loans with less than 20% down, and at Rocky Mountain Law Enforcement Federal Credit Union, there is none required. You can put less than 20% of the total home cost down and still avoid a monthly PMI fee.

Low Interest Rates and Origination Fees

Credit unions are able to offer lower than average interest rates and origination fees because of how their business models differ from that of a traditional bank. Credit Unions (like RMLEFCU) are owned by the members and run as close to cost as possible. Any profits earned don’t go into the executives’ pockets, members democratically decide where they go, which is usually to lowering rates and fees.

On a huge, long term loan like a mortgage, small fractional increases in interest rates can have an enormous impact on how much you will pay out over the life of the loan. Getting as low an interest rate as possible is a vital part of getting the best mortgage.

Better Service

Credit Unions are known for their great service. It all ties back to the business model; a Credit Union is owned by its members and decisions are made democratically. This involvement by members in the innerworkings of the business eliminates the divide between bank employees and you.

In addition, RMLEFCU is a local, Colorado credit union made up exclusively of law enforcement officers, support staff, and their families. Our loan officers understand the Denver real estate climate, your situation, and know you by name. Your experience applying for a loan will be much more personal and specific to you, not just how you add up on a piece of paper.

Make your dream of being a home owner happen sooner than you thought possible by getting a mortgage through a credit union. With no PMI and low rates and fees, you can’t afford not to!

15 Mar

Tips for the First Time Homebuyer in Colorado

 

Imagine you are at the starting line of a marathon. You’re contemplating whether your training was enough, what you ate the night before, and what you will do if things go south. You’re anticipating the reward at the end – the accomplishment of having persevered through unwelcoming territory both mentally and physically. While this narrative is about the sport of running, it could also describe the home buying process in Colorado, especially for a first time homebuyer. You need to be prepared, patient, and ready for roadblocks. But before you take off from the starting line, there’s a lot of prep work to do.

Examine why you want to buy and not rent

Maybe you think there is an opportunity to earn a return – Over time this may be true in our market as home values have been steadily rising, but unless you are very handy, or have the money to hire a contractor to renovate your home – this should be far down on your list of reasons to buy and not rent.

Perhaps you want to buy because rents are just as expensive as a mortgage. Rent Jungle reports for February 2017 show that 1 bedroom apartments in Denver rent for $1,367 a month on average and two-bedroom apartment rents average $1,748. Your mortgage could be comparable. Especially because with a first mortgage loan from RMLEFCU doesn’t ever carry mortgage insurance.

“Pride of ownership” remains one of the top reasons to buy. This one really resonates with buyers who believe buying is the best way to make an investment in their own future and the future they envision for themselves.

If all else fails, you can always leave it up to science and math with this really useful test for renting or buying.

Once you’ve decided to buy – get your affairs in order.

First, check your credit report – Make sure there is nothing surprising. Remember: don’t close old accounts and for Pete’s sake, refrain from making other large purchases if you are hoping to bid and secure a house soon.

Next, prepare copies of everything you will need to apply for a loan. At a minimum you will need:

  • W-2s or federal tax returns for the past two years;
  • Most recent pay stub for proof of income;
  • Most recent statements for any loans or outstanding debt;
  • Statements for bank accounts and other assets for the past three months;

Find out what you can afford by meeting with RMLEFCU’s loan department

The loan application process at Rocky Mountain Law Enforcement Federal Credit Union is easy, quick and attentive from start to finish. We offer competitively low, fixed rates with no PMI (mortgage insurance) to take you from renter to homeowner with a variety of repayment terms to suit your individualized situation. Our loan advisors are local, experienced and can provide fast approvals and loan letters during the bidding process.

Three reasons to use RMLEFCU for your First Mortgage:

  1. No Mortgage Insurance (PMI) – Mortgage brokers and banks require you to have mortgage insurance if your down payment isn’t high enough. We trust our members so we don’t require PMI!
  2. Lower Origination Fees – We keep your initial down payment lower.
  3. Low Fixed Rates – Your payment will stay the same for 30 years. No surprises as interest rates climb.

A word of advice: Aim for a mortgage payment that is no more than between 25-29% of your pre-tax income.

  • Find a realtor in Colorado

Many people look to their immediate social network, i.e. friends and family, when selecting a realtor. But rather than worry about whether your co-worker’s wife will be upset that you went with a different real estate agent, worry more about what an agent should be doing for you.

Here’s a few tips for finding a realtor that matches your expectations.

Once you narrow it down to a few contenders, prepare questions to ask. The most important clue is how responsive they are to you. In a market that depends on 24/7 availability, a realtor needs to prioritize your phone call or email.

  • Take a deep breath as a first time homebuyer.

Prepare for stress by remembering to be patient, aggressive, and motivated. Get ready to chip away at a wish list of things you want in a home and focus on your needs.

  • Do your research for the area where you want to live.

Are there young people nearby, or will you be surrounded by retirees? Is there new development going in that will impact your experience living there? How much of a commute are you willing to deal with? How are the schools? Even if you don’t have kids, consider how the quality of schools may have an impact when you decide to sell.

  • Find a trusted home inspector.

Usually your realtor will have someone they work with. If you decide to branch out, keep these tips in mind.

  • Don’t come to the table with baggage. The less stipulations you have as a buyer, the better.

Consider RMLEFCU your running coach in the marathon that is home buying. We have a local lending team that is experienced and familiar with the needs and wants of law enforcement officers and their loved ones. Put us to work for you and we’ll work hard to show that you’ve made a wise choice.

 

06 Feb

HELOC the Heck out of Your Home Remodel

If you are considering a home equity line of credit, or HELOC loan, to make home repairs and remodels, you are in good company. Year after year, home improvement is the #1 way homeowners use their home equity line of credit. Don’t know what a HELOC is? Watch this quick video and continue reading below.

Since a HELOC’s collateral is the equity in your home, it makes sense to put the money back into what is usually your most valuable asset.

If you live in the Denver metro area, your home value has risen, giving you a larger cushion of equity to use your HELOC for home remodeling. As a result, when you make your home more attractive to potential buyers, the payoff will be well worth the investment when you sell.

Even if you are not planning to sell for a while, you get to enjoy the value add to you and your family’s daily life from these improvements.

Which rooms and improvements deserve your attention? Thankfully, Remodeling Magazine creates an annual report revealing the costs of executing 29 remodeling projects in 99 markets nationwide as well as real estate pros’ views of how much those projects will increase a home’s value at resale. Results below are specific to Denver for 2017. Read More

20 Oct

High Value Home Improvements to Make with Your HELOC

Did you know about 50% of Home Equity Line of Credit loans, aka HELOCs, are used to make home improvements according to the US Census Bureau’s Housing Survey? It’s a common sense move since the updates you make, especially in Denver’s market, are likely to reap rewards when you decide to sell. You can even use some of the new equity in your home you’ve earned with your labor (or a contractor’s) to pay for the old equity you borrowed. Winner! Winner!

How is a HELOC different than just a loan? A home equity line of credit is more like a credit card than a loan. Once the line of credit has been approved, the homeowner decides if and when to use the money and can withdraw it from the account as needed. Payments aren’t due until there’s an outstanding balance on the line of credit.

We published a post about HELOCs and rising home prices in Denver in an April 2015 blog post and one and a half years later, the song remains the same – home prices are still HOT. The average sold home price in metro Denver was around $398,663 then and now it’s just slightly lower at $396,700.

Did you know there are also tax benefits to getting a HELOC? If you itemize your taxes, you may be able to deduct the interest paid on a home equity loan or HELOC if the loan amount is limited to $100,000. It doesn’t matter if you used the money for home improvement, or a car, or a trip of a lifetime.

If you’re ready to build equity and want to choose a midrange remodeling project that will yield the greatest return, check these recommendations. Source: Remodeling Magazine’s Cost vs. Value 2016 edition for Denver, CO.

  1. Minor Kitchen Model
  2. Front door
  3. Deck
  4. Convert attic into a bedroom
  5. Garage Door Replacement

Even if you’re not going to be selling right away, consider how your HELOC can improve your quality of life in the home you’re in now. Consider the following scenario. Your home is worth $300k with a remaining mortgage of $150k, so you have $150k of equity in the home and you decide to invest $50k in a major kitchen remodel. The average ROI on this investment is 65 percent, so the project adds $32.5k of value to the home. While you now owe $200k on the home, it is now assessed at $332.5k. The homeowner has decreased the home’s overall equity by only $17.5k, and now enjoys a brand new $50k kitchen in a home that still has plenty of equity.

Talk to one of our RMLEFCU associates today about a HELOC! Find out more about our HELOC offerings here.