Insider Training Information on Denver area mortgage financing analysis and choices.
More about Denver area mortgage financing.
We’re going to cover a ton of stuff that’s going to help you tremendously in making your decision about your Denver area mortgage financing (www.5280lend.com) . Even if you’ve done multiple mortgage loans here in the Colorado Front Range you’re going to want to stick around and watch some of this valuable analysis that I’m going to get to a little later on. I’m going to show you how to save thousands or maybe even tens of thousands of dollars on your Denver area mortgage financing over the life of time in which you have mortgages. I know that sounds a little optimistic maybe even a bit unrealistic but I think after you go through the analysis you’re going to see how totally valuable it’s going to be to have this information in your pocket.
Before I get to that let’s cover some of the commonly asked financing questions that come up for mortgage clients shopping for Denver area mortgage financing. The first of those is do I use a bank or a mortgage broker. Actually I don’t think there are just two categories. I think there are regular commercial banks, there are mortgage brokers, and there are online lenders, and there’s what I like to refer to as middle tier mortgage companies that’s what my company is. We exclusively deal with Colorado mortgage lending and Denver area mortgage financing. We don’t do any other bank products so we’re totally focused on that type of solution. Let’s start by looking at commercial banks. They are very visible. They’re on every street corner in every city right so you see them constantly. You go in there once or twice a month so it seems logical that walking into a bank and solving your problem there would be an easy solution. The drawback with banks is that they just do not employ experienced people. The reason for that is they just don’t compensate people well enough. Once people develop some experience at a bank, they usually move on to a middle tier mortgage company or other companies that compensate them better and that’s why a bank is probably despite its visibility is probably going to be a drawback. You need an experienced mortgage project manager to handle your transaction. Despite what a lot of people think that the mortgage product is a commodity-based product. Even a lot of lenders consider themselves to be a commodity and that’s why they focus so much on current mortgage interest rates because they just believe: oh it’s just about the lowest mortgage
rate. I think if you’ve gone through a mortgage transaction or two you’ll realize how much value a good lender can bring to your equation and potentially how much bad value of add lender can bring to your equation. You don’t want to suffer through that you don’t want to find out the hard way so take an interest in noting how much experience someone has.
I’ve been in the mortgage business for just under 30 years. I’m going show you some of my Google reviews right now and some other customer reviews for Denver area mortgage financing that people have been so kind as to write up for me.
I think that these are not only a testament to how committed I am to making sure you have a good experience and that you get the thing that you came to me to get but also that I’m comfortable with telling people what they need to hear versus what they want to hear. A lot of Denver area mortgage financing lenders are so concerned about earning your business and earning their Commission that they forget that their first job is to help you get your transaction done efficiently and effectively and to make sure that you are able to borrow money by spending the least amount of dollars. I am focused on that term dollars and importantly distinguishing that from just focusing on interest rate. That’s something that will lead us into this analysis later. Because you pay dollars you don’t pay interest rate OK so let’s focus on that part and I’m planting that seed for later.
So back to the other options for you are online lenders. Online lenders are almost as visible these days as banks because most people shop for stuff online and the big online lenders are all over Google and all over other search engines. So you’ve got companies like Quicken Home Loans which is same as Rocket Mortgage. You’ve got LendingTree. You’ve got New American Funding, and Amerisave. If you’re here in Denver there’s American financing which advertises on the radio and on the Internet a lot. I’ll tell you the common thread with all of these companies is that they are mass production mortgage operations which means they are a conveyor belt mortgage process which is good for them because it creates a real sense of efficiency for their company. You’ll end up talking to 3-4 maybe five different people throughout the processing of your loan. Like I said that’s great for them because they can kind of categorize what people know and they don’t need to train them on certain aspects of the loan but for you that’s a major drawback. You have to end up dealing with explaining your situation to that many different people. That not only is a pain for you to deal with but it also can cause some real communication gaps and some failures in actually getting your loan done. As much as Rocket Mortgage advertising makes it seem like it’s magic, I can assure you that’s one of the most complained about companies when I’m talking to other real estate agents and other professionals around this business. I don’t know about you but I never want to buy anything that’s mass produced unless I’m getting such a huge discount on that thing that that’s that just makes it totally justifiable. I’ll tell you do not get any discount by using those companies. In fact, most often you’re paying more. You just don’t realize it because they’ll maybe give you the same rate or lower rate but you’re paying so much more in closing costs that’s the overall price of a mortgage loan is much higher. The overall price of the loan is the combination of interest rate and closing costs. In our analysis later we’ll dive into that. I only deal with about 5 to 8 clients every single month so that I can stay focused on that those clients from start to finish in their transaction. I’ll be your only point of contact and you may occasionally talk to my processor but for the most part I will be your main point of contact. I’ll have my hands on the whole thing from start to finish. That’s an important distinguishing factor that you want to consider.
Now the next most important question that comes up is obviously how much Denver area mortgage financing do I qualify for. If you’re going to go out and start shopping for houses you have to know how much house you can afford. You need to know how much your monthly payments are going be and you need to know how much down payment you need to get that job done. That is something that I will usually be able to do within about an hour or two of our first phone conversation. I’ll spend 15 or 20 minutes with you on the phone collecting enough information and start working on your numbers for you and then within an hour or two I can get back to you and tell you how much Denver home financing you qualify for. I can you can get out there and start home shopping for Denver Homes, Englewood Homes, Littleton Homes, Highlands Ranch Homes, Aurora Homes, Lakewood Homes, Brighton Homes, Westminster Homes, Boulder Homes, Arvada Homes, Castle Rock Homes, Parker Homes and any other Colorado Homes that you might be looking at.
There are a few other issues to consider in the mortgage pre-qualifying process. There are employment issues, there are credit issues, there are down payment issues. So let’s start with credit issues: I’ve got some really good resources. One of my best resources for mortgage processing is getting your credit scores increased and approved. We’ve got a Credit Rescore Express program which is an analytical tool which will tell us how quickly and how much higher we can improve your credit scores in a short period of time. Longer term credit repair is another aspect that we will do some Credit Repair Consultation on. We can work on both long and short term stuff. Surprisingly, we can pop credit scores up 20 or 30 points very quickly a lot of times to get you into the rate categories that you need to help you qualify for more. The Rapid Credit Rescore or Rescore Express is a great tool to help you.
Home Loan Down payment issues are another element of the qualifying process that I’ll coach you on. Whether we need to use Colorado down payment assistance programs, Denver VA Home Loans, Denver FHA Home Loans, Fannie Mae Home Ready, Freddie Mac Home Possible, or any of the other low down payment options that are available; I can help you through those things. VA is really one of the only Denver area zero down payment options that’s out there anymore. I’ll coach you through getting gifts for down payment scenarios, and 401K loan options, and other retirement account options that will certainly help you out with down payments.
Employment issues are the next most important issue which you will want an experienced person to be able to coach you through. Denver Self-employed people usually have some tax return issues that need to be considered. Or if you are commissioned income or part time employee. All of these things are things that I can coach you through and help you try to figure out because these are difficulties that can sometimes present problems. The earlier on that we know about these problems earlier we can work on a solution. I’ll try to vet that stuff out right in the beginning while we’re gone through our Live Phone pre-qualification.
Now if you’re in the Denver real estate market, Littleton real estate market, Aurora real estate market, Lakewood real estate market, Highlands Ranch real estate market, Arvada real estate market, Brighton real estate market, Thornton real estate market, Westminster real estate market, Broomfield real estate market, or Boulder real estate market; you know how competitive these areas can be. You have to give yourself a leg up in these bids for real estate. You probably are not somebody who can just write a check for more and more money. If you’re a billionaire that’s no problem for the rest of us regular people we have to come up with a little bit more creative solution to give ourselves a chance to out-shine the competition. There might be as many as eight or ten other people offering on a house that you might be looking at. You have to find a way to distinguish yourself from those people. The best way to do that is to get a full Denver Mortgage pre-approval. This is a little bit more extensive process: it’ll take us about a week to a week and a half to get you fully credit approved. We’ll exchange some documents and go through a full credit approval process then you become effectively the same as a Denver cash buyer and that way when you make an offer on a house, at that stage, you can close in a week to two weeks. Then you are essentially the same as a cash buyer. You will still have time to get an inspection and to get an appraisal. At this point though, those are the only two things that’ll be left for you to get done
The last question that I wish people asked me about more because I wish they were more conscious of this issue is the analysis on what’s more important, or at least as important, as a low interest rate. Here is where I’m going to dive into this closing cost analysis.
This is a comparison between a typical Denver mortgage quote and a Denver no closing cost mortgage quote. The first typical one were getting quoted 3.875 we’ve got our closing cost descriptions over here which included origination charge of 1% origination fee it’s just 1% of this loan balance, we’ve got lender charges of 1775 that includes appraisal fees, underwriting fees, and processing fees, and we’ve got title insurance fees of about 1268. All of that stuff totals up to $6443. Now as a comparison on our no cost mortgage option we’re getting a quote of 4.25%. For that higher rate, the tradeoff is that we do not have any origination fee, and we still have our lender charges, and we have title insurance charges. Now the other tradeoff is that we also get a Denver mortgage lender credit of $2922.50. We do not have that on the typical mortgage quote. Now that lender credit will be kept as profit by a lot of other lenders. We will apply that to your closing costs. So the net closing costs you have is only $107.00 versus the typical quote you’ve got $6443. The difference being $6335 now that’s $6335 gets you a 3.875 rate that’s much better right? The big difference is it only saves you $44 a month and payment. If you do the mortgage payment break-even analysis you just divide this Closing Cost Investment you made of $6335 by your $44 monthly savings, it takes you 143 months to break even or to get your investment back in the form of the lower payments. That’s one month under 12 years. That’s a really long break even. This spreads between these interest rates and these credits are not always the same but the break even generally goes from anywhere from as low as three years to as much as 12 to 15 years. So you can see that your investment of the $6000 that you’re spending definitely isn’t worth it. It is also a lot less money out of pocket that you have to come up with. Either way it’s an expense that you incur and it’s not something you can get back. So looking at the period of time that it takes you to recuperate that expense being this long obviously you can tell that during the no cost option is a significantly better financial option.
Remember again where I talked about the dollars that you’re spending. You’re spending dollars, not interest rate. The overall expenditure is really high so think about that this is a chart with 30 year fixed rate mortgage rates from the early 80s through 2021 (https://www.macrotrends.net/2604/30-year-fixed-mortgage-rate-chart) . This chart shows a steady decline of Denver mortgage interest rates for 40 years. That’s not accidental that is intentional economic Federal Reserve policy. A lot of people ask: can Denver mortgage rates go lower than 2.5%? It wouldn’t seem logical, but in Europe, rates are actually negative and have been for like the last six or seven years. Here, in all likelihood, based on this chart we will likely go below 2.5% and at some point possibly negative.
This no cost strategy is one that I have been using for about the last 15 years, and I have to tell you that I really rarely do this thorough analysis where we look at that 40 year history of things. When we look back and see how much savings someone could have realized during that period of time, I am really very surprised myself about how much savings are realized. It’s literally saving people 10s of thousands of dollars. Most people roll in closing costs of 3-4 maybe 5-6 thousand dollars. I’ve seen people roll in as much as $12,000 in closing costs and the discount points. On average people save maybe 100 to 200 a month on Denver area mortgage refinancing. You can do the math.
If you are looking into Denver area mortgage financing options or Buying a New Home in Denver, please think about give us a call and letting us help guide you in the right direction.