Thinking of buying a new home? – Estes Park Trail-Gazette

Here are three things to prepare for home ownership.

1. PREPARE YOUR CREDIT – Mortgage lenders generally require at least 24 months of good credit history for you to qualify for a mortgage. It’s normally a good idea to have a few credit cards, a few installment loans, and a 24-month history of paying rent on time.

2. PREPARE YOUR CASH – Mortgage lenders generally require a debt to equity ratio of less than 45% to qualify for a mortgage. This means that your total monthly debt payments (including the new mortgage payment) should not exceed 45% of your monthly income.

3. PREPARE YOUR SAVINGS – Mortgage lenders generally require you to have a certain amount of savings in reserve to qualify for a mortgage. Your savings must be in your account for at least three months to be eligible, and any large deposits will need to be explained and documented. The amount of savings required will vary depending on the loan program you choose. However, a good goal is to save enough for a 3% to 5% down payment, plus 1 to 3 months of mortgage payment reserves. For example, if your new mortgage payments will be $3,000 per month, you should probably aim to save approx. $9,000 plus the amount of your down payment.

Rich Flanery, Mortgage Solutions

Of course, each lending program has its own guidelines which may be different from the ones I’ve outlined above. That’s why it’s important to speak to a professional who can help you review your options and assess your specific scenario.

Home prices and values ​​are up, but so are loan limits

Here are two ways to benefit from the 2022 loan cap increase.

Home loans that comply with Fannie Mae and Freddie Mac guidelines generally have better terms than non-compliant loans. That’s why it’s good news that the Federal Housing Finance Agency (FHFA) has increased conforming loan limits to $647,200 for 2022. This is an increase of $98,950 from the limits of 2021 loan. In some higher cost areas such as Boulder County, the loan limit has increased to $747,500. There have also been loan limit increases for FHA loans, which provides more options for home financing.

1. BUY A HOUSE – It may make sense for you to consider buying a new home using the higher loan amounts. This may be the perfect time for you to lock in a long-term interest rate, as many economists believe interest rates could rise over the coming year.

2. REFINANCING – It may be worth considering a home loan refinance if: You currently have a home loan that is close to the loan limit. You would like to make improvements to your home. You want to consolidate other debts into your home loan (like home equity loans or credit cards). You pay mortgage insurance and your home has gone up in value since you bought it. You anticipate a change in your cash position in the months to come (financing of studies, retirement, assistance for the elderly, etc.).

Rich Flanery, Licensed Loan Officer, Certified Mortgage Planning Specialist, NMLS: 256117, 501 St. Vrain Ln, Estes Park, CO, 970-577-9200. Licenses and Disclosures Privacy Policy LMB#100012200 Equal Housing Lender ©2018 Mortgage Solutions of Colorado, LLC., dba Mortgage Solutions Financial NMLS #61602.

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