Denver Mortgages & Banking

Selecting and financing a home is an exciting and adventurous experience—and a challenging one. Below is some information designed to help newcomers overcome some of the hurdles they may encounter and to point them in the right direction for obtaining additional information. Also, other factors that are related to buying a home, financial planning and metro Denver banking are provided in this chapter. The U.S. Department of Housing and Urban Development (HUD) provides a Web site (www.hud.gov) specific to purchasing a home in Colorado.

Financing a Home

• Before you start, there are many laws that protect you from scams, unnecessary expenses and discrimination in the process of home buying. The Fair Housing Act prohibits discrimination in the sale, rental and financing of dwellings, and in other housing-related transactions based on race, color, national origin, religion, sex, handicap (disability) and familial status (including children under the age of 18 living with parents or legal custodians, pregnant women and people securing custody of children under the age of 18).
• It is illegal under the Real Estate Settlement Procedures Act (RESPA) for anyone to pay or receive a fee, kickback or anything of value because they agree to refer settlement service business to a particular person or organization. For example, your mortgage lender may not pay your real estate broker $250 for referring you to the lender.
• You can save yourself a lot of wheel-spinning if you take a little time to figure out how much mortgage can you afford. You need to consider current loan interest rates. The lower the interest rate, the more expensive a home you can afford. Home buyers can get a general estimate of what they can afford by going to www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH. Answer a few questions, and the calculator will provide a general estimate of the maximum sale price you may qualify for under Federal Housing Administration (FHA), Veterans Association (VA) and conventional loans. It also estimates your down payment, closing costs, total cash required at closing, monthly mortgage payment, other monthly housing costs and your remaining monthly income. Remember, these are only estimates. You should see a lender for more details.