Common Questions from First-time Home buyers

1. Why should I buy, instead of renting?

Answer : A home is an investment. When you rent you write your monthly check and that money is gone forever. But when you own you home, you can deduct the cost of your mortgage loan interest from your federal taxes. You can also deduct your property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you can enjoy something that is yours - a home that you can call your own.

2. What are HUD homes, and are they a good deal?

 Answer: HUD homes can be a very good deal. When someone with a HUD insured mortgage can't meet the payments, the lender forecloses on the home. HUD pays the lender what is owed; and HUD takes ownership of the home. Then HUD puts the property back on the market and sells it in a bid process. By the way, if you want to buy a HUD home, you are required to use a real estate broker to submit your bid. Our HUD specialists are well seasoned and can guide you through the entire bid process making the experience much easier for you.

3. Can I become a home buyer even if I have had bad credit?

Answer : You may be a good candidate for a HUD home. We at HUD Colorado have co-developed a Home Buyer Club for customers who what to become home buyers. Our home buyers club has complimentary counseling available. They will work with you to repair your credit and provide good sound counseling so you will have an opportunity to purchase a home in the future. Should you like to take advantage of this FREE services please go to the Home Page side bar and click on Information Request. Fill out the information field and submit. You can also call the HUD Colorado hot line 303-327-6641 and leave a message. One of our HUD specialists will contact you as soon as possible.

4. Should I use a real estate broker?

Answer: Using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be overwhelming . Our HUD specialists are all professionals and can guide your through the entire process. Using HUD Colorado.Com will give you immediate access to homes as soon as they're put on the market . And when it's time to make an offer our HUD specialists can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and be there to answer any last- minute questions when you sign the final papers at closing. And you don't have to pay the us anything! The payment comes from the home seller- not from the buyer.

5. How much money will I have to come up with to buy a home?

Answer: It depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer. The downpayment , a percentage of the cost of the home that you must pay when you go to settlement, and closing costs - the costs associated with processing the paperwork to buy a house.

When you make an offer on a home, we put your money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you.The amount of earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $ 500. - $ 2,000.

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10 - 20% of the purchase prices. That's why many first - time home buyers turn to HUD's FHA for help in getting a loan. FHA loans require only 3% down - sometimes less.

Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise. If you buy a HUD home, HUD may pay many of your closing costs for you. Our HUD specialist will help your platform the bid in a way to save you money.

6. What other costs do I need to consider?

Answer: You will have your monthly utilities. You might have homeowners association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes are normally rolled into your mortgage payment.

7. So what will my mortgage cover?

Answer: Most loans have 4 parts: principle: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/ county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans and ARM loans ( adjustable rate mortgages) are available too.

8. When I find a home I want, how much should I offer?

Answer: Again, our HUD specialists will help you here. But there are several things you should consider: 1) Is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? 3) Is the home in the new bid period or is it in the extended bid period. If it's in the extended listing period the seller may be willing to except a lower offer. 4) How much mortgage will be required? Again our HUD specialist will help you out defining whats right for you and whats not. We want to make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted.

9. What if my offer is rejected?

Answer: They often are! But don't let that stop you. If the home is in the bidding period you might end up being in a backup position. If this is the case there still my be a chance that you can move to a first position should the winning bidders financing fall through. If you are making a offer on a home in the extended bidding period and it gets rejected then we begin negotiating. Often, negotiations on a price go back and forth several times before a deal is made.

10. So what will happen at closing?

Answer: Basically, you'll sit at a table with your HUD specialist, and a title representative who will handle the closing paperwork. The title representative will have a stack of papers for you to sign.While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and / or consult with your HUD specialist to make sure you know exactly what you're signing. Before you go to closing it's our job to make sure all your questions are answered. Our HUD specialists will make sure you receive a copy of your settlement statements prior to closing if at all possible.