That's exciting news and Premier Lending can help! As a Boulder mortage lender, we can provide financing for a single-family home or a condominium, and we will guide you through every step of the process from your loan application to closing. We understand that building a home can be stressful and it typically takes longer to complete these purchase deals but we will make the process as smooth as possible with attractive features such as:
Congratulations on being a first time home buyer! Premier Lending understands that purchasing a home can be a rewarding, yet challenging experience for cash-strapped first-time homebuyers. Due to out-of-pocket costs associated with buying a home, you may be wondering about your ability to secure a mortgage. Premier Lending is a Boulder mortgage lender, offering a variety of mortgage solutions in order to help first-time homebuyers attain financing, such as government-sponsored bond programs.
These programs provide down payment and/or closing costs assistance to first-timers who have limited cash reserves. Borrowers who haven’t owned in the previous three years may also be eligible for a bond program.
Many people have the misconception that you need a 20% down payment for a home purchase. However, whether you are a first-time homebuyer or a repeat borrower, you can purchase a property with far less cash. Premier Lending is a Boulder-based mortgage lender that can provide information on down payment assistance programs or low down payment mortgages. FHA home loans require as little as 3.5% down and a standard conventional home loan only requires 5% down.
Lack of a down payment is one of the biggest obstacles to homeownership, but down payment assistance programs may be available in your area. This type of assistance can include grant programs and interest-free second mortgages. If you don’t qualify for assistance, there are other programs such as low down payment mortgage options FHA home loans. In addition, many mortgage programs allow down payment and closing costs gifts from relatives, as well as closing costs assistance from home sellers.
If you are looking for a rural home, our USDA mortgage product may help you get there. For eligible suburban and rural home buyers, it's a 100%, no-money down mortgage loan backed by the U.S. Department of Agriculture (USDA).
Yes - if you are a veteran, an active-duty service member, or the eligible surviving spouse of a veteran, a VA home loan can help you realize your dream of homeownership. You can choose between a fixed-rate or an adjustable-rate mortgage when purchasing a primary residence, or refinance an existing VA home loan to lower your mortgage rate and monthly payment. Program benefits include:
Decreasing your monthly mortgage payment can significantly improve your financial outlook. Refinancing your existing mortgage might be the solution if you are struggling to pay your current payment. Refinancing replaces your current mortgage with a new one, often resulting in a more favorable interest rate and terms. Other benefits of refinancing include:
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A list of common mortgage and financial terms with their meaning.View Our Glossary
Many people are surprised to learn that rates change on a daily and sometimes hourly basis. Interest rates fluctuate in response to changes in the financial markets. The bond market is generally a good indicator of the trend of interest rates, with higher bond rates usually producing higher mortgage rates.
You are ready to buy a home! After you receive your pre-approval, it’s very important to inform us of any changes to your financial picture or credit history as this could impact the amount or type of loan for which you’ll qualify once your loan is fully underwritten.
Mortgage insurance is generally required in one form or another when the down payment is less than 20%, and it protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly mortgage insurance premium. Depending on your particular situation, there may be loan options available that either don’t require monthly mortgage insurance payments or allow your monthly mortgage insurance payments to be dropped at some point in the future.
(Disclaimer: *BPMI = Borrower Paid Mortgage Insurance; LPMI = Lender Paid Mortgage Insurance. LPMI may not be cancelled by the borrower; it terminates only when the loan is refinanced or paid off, and it usually results in a loan with a higher interest rate than BPMI unless discount points are added to lower the rate. BPMI may be cancelled or terminated when the loan reaches 80% of the original value of the property.)
We are often asked why there is so much paperwork mandated by the bank for a mortgage loan application when buying a home today. It seems that the bank needs to know everything about us and requires three separate sources to validate each-and-every entry on the application form.
Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history.
1. The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of affording the mortgage.
During the run-up in the housing market, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.
2. The banks don’t want to be in the real estate business.
Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.
However, there is some good news in the situation.
The housing crash that mandated that banks be extremely strict on paperwork requirements also allows you to get a mortgage interest rate as low as 3.43%, the latest reported rate from Freddie Mac.
The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process but also paid a higher interest rate (the average 30 year fixed rate mortgage was 8.12% in the 1990’s and 6.29% in the 2000’s). If you went to the bank and offered to pay 7% instead of less than 4%, they would probably bend over backwards to make the process much easier.
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
There are some common scenarios that can lead to a longer processing time. Here are some factors that might cause a mortgage lender to take a relatively long time with processing.
1. New mortgage rules require more verification.
In 2014, a new set of mortgage rules took effect, and they’ve had an impact on how lenders originate home loans. The Ability-to-Repay rule, for example, requires mortgage companies to thoroughly verify and document a borrower’s financial ability to repay the loan. As a result of these and other government regulations, mortgage lenders might take a long time to process and approve loans (longer than in the past, anyway.)
2. There are lots of players and paperwork involved.
When you apply for a home loan, your application and paperwork might pass through the hands of half-a-dozen different people (or even more, if you use one of the “big banks”). Loan officers, processors and underwriters, oh my! And additional documents might be requested at each stage. Think of a snowball getting larger as it rolls downhill.
This is another reason why mortgage lenders can take a long time when processing loans. There are many steps in the process, many documents to review, and several different people involved.
Granted, some lenders have made big advancements with streamlining in recent years. This is especially true for those companies that put an emphasis on technology, web-based applications, and the like. But by and large, it’s still a cumbersome process with lots of paperwork along the way.
3. Underwriters often request additional documents.
Home loan applications go through several screening processes. Underwriting is the most intense review. This is when the mortgage lender’s underwriter (or underwriting department) reviews all paperwork relating to the loan, the borrower, and the property being purchased.
Underwriters often request additional documents during this stage, including letters of explanation from the borrower. It’s another reason why mortgage lenders take so long to approve loans.
4. Home appraisals and title searches can delay the process.
In a standard residential real estate transaction, the buyer’s mortgage lender will have the home appraised to determine its current market value. Additionally, a title company will usually step in to verify the seller’s right to sell (and transfer ownership of) the property.
Sometimes these things go smoothly — other times they don’t. For instance, the appraiser might decide the home is worth less than what the buyer has agreed to pay (in the purchase agreement). This can delay or even derail the mortgage process. The title company might have to find and fix problems relating to the title. All of this can make the process take longer.
Sometimes It All Goes Smoothly
Let’s end on a positive note. I don’t want to give you the false impression that mortgage lending is always a slow process. Sometimes it moves quickly and smoothly, with no hang-ups or obstacles along the way.
Some lenders can process an application and approve a borrower in 7 – 10 days. This is especially true when there are no underwriting issues or conditions to resolve.
But if the mortgage company has a backlog of applications, and/or the borrower has a host of financial and paperwork issues, it can take a relatively longer time.