Homeownership brings value to families, communities, and neighborhoods. However, high home prices and increasing mortgage rates are keeping many Coloradans from buying or selling homes. Fannie Mae’s monthly Home Purchase Sentiment Index (HPSI) May survey found that only 19% of consumers feel like it is a good time to buy a home. Additionally, 81% of consumers who are currently renting believe it would be difficult to get a mortgage today.
Despite these statistics and the current holding pattern in the home buying market, Credit Union of Colorado encourages Coloradans to take advantage of this time to assess their current financial status, make necessary adjustments, and understand the latest mortgage options so they are ready to make their move when the time is right.
The HPSI survey also showed that 65% of consumers feel like it is a good time to sell a home. According to Madeline Sears, branch manager of Credit Union of Colorado Fort Collins location, homeownership offers many benefits, including stability and financial perks such as tax breaks, the opportunity to build equity, and predictable housing payments.
“The Credit Union of Colorado team is here to help, whether you are a first-time homebuyer or a current homeowner. I encourage you to come in and let us help you create a plan to make your home buying or selling vision a reality,” says Sears.
Know What You Can Afford
Regardless of your homeownership goals, it is vital to know what you can afford to spend each month on a mortgage payment which typically includes loan interest, property taxes, and homeowners insurance. Mortgage lenders recommend that you spend no more than 36% of your gross income on your home loan and other debts combined. The Credit Union of Colorado’s mortgage calculator can help you determine what you can afford. The team at your local branch can also help you individually based on your unique financial situation.
Focus on Your Credit Score
In the months before you plan to apply for a mortgage loan, see where your credit score is and work to improve it if you need to. That means always paying your bills on time and paying down balances on your credit cards as much as possible. It is also important that you don’t apply for credit you don’t need and hold off closing cards you are not using.
When you decide you are ready to make a move, work with your credit union or bank representative to get pre-approved for your mortgage. This will ensure that you can make a competitive offer quickly when you find your dream home. If you are pre-approved for full financing, you can make a confident offer and stand out from other buyers who won’t be able to close as quickly.
Understand Your Mortgage Options
It is important to understand your mortgage options. You should compare offers and shop around for the best deal at both banks and credit unions. This can save you money in the long run, as lenders’ rates can vary substantially.
For example, the Credit Union of Colorado offers a wide array of traditional and nontraditional mortgage financing options designed to give Coloradans as much access and flexibility as possible. A few of the credit union’s unique options include:
• 100% financing options for homebuyers by utilizing an interest-free second mortgage as the borrower’s standard three percent down payment.
• An 85% loan-to-value (LTV) mortgage loan without private mortgage insurance (PMI). This means you can secure a mortgage loan for 85% of the value of the property you intend to purchase or refinance. Benefits for homebuyers include a lower down payment and lower monthly payments without the added PMI expense.
• 40-year mortgage loans allow homeowners to afford a more expensive home for a lower monthly payment. While this type of mortgage can increase purchasing power by helping some home buyers qualify for a larger loan amount, it can also come with higher interest costs and a greater overall debt burden.
“When it comes to a mortgage – there isn’t a one-size fits all solution. It’s important for home buyers to carefully consider their individual financial situation, goals and long-term plans before deciding on the mortgage loan that is best for them,” says Sears. “That’s where Credit Union of Colorado comes in. We take the time to listen, understand your unique situation, and give you the details of every available option so you can make the choice that is best for you.”
For those interested in learning more about Credit Union of Colorado’s home mortgage offerings, call 800-444-4816 or visit cuofco.org.
Credit Union of Colorado in your community:
Founded in 1934, Credit Union of Colorado is one of the largest credit unions in the state and is deeply connected to the communities where its members live and work. The credit union’s “here to help” culture is demonstrated by its strong support of local communities through financial donations, promotional sponsorships, and employee volunteerism. Credit Union of Colorado offers the latest in banking with 18 full-service locations throughout the state featuring lobby service centers, safe deposit boxes, drive-up tellers, and surcharge-free, drive-up ATMs. The credit union also provides its members with the convenience of digital banking with remote check deposit and access to Zelle®, a fast, safe, and easy way to send money right from your mobile banking app or online banking account.
With more than 85 years of experience, the Credit Union of Colorado is a stable, member-owned financial institution with more than $2 billion in assets serving more than 160,000 members. The Credit Union of Colorado Foundation supports education and emergency human services programs through college scholarships and grants to nonprofit organizations.