FAQs
Please let us know if you have any remaining questions that are not addressed here. We will be happy to help in any way we can.
- How do I know how much house I can afford? click here
- What is the difference between a fixed-rate loan and an adjustable-rate loan? click here
- How is an index and margin used in an ARM? click here
- How do I know which type of mortgage is best for me? click here
- What does my mortgage payment include? click here
- How much cash will I need to purchase a home? click here
- I’m thinking of moving to Colorado from another country, where do I start? click here
- I’m thinking of selling my house. Should I sell it myself or use a Realtor? click here
- How does the homebuyer tax credit work? click here
Q: How do I know how much house I can afford?
A: Generally speaking, you can purchase a home with a value of two or three times your annual household income; however, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
Q: What is the difference between a fixed-rate loan and an adjustable-rate loan?
A: With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.
Q: How is an index and margin used in an ARM?
A: An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally, the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).
Q: How do I know which type of mortgage is best for me?
A: There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. We can help you evaluate your choices and help you make the most appropriate decision.
Q: What does my mortgage payment include?
A: For most homeowners, the monthly mortgage payments include three separate parts:
- Principal: Repayment on the amount borrowed.
- Interest: Payment to the lender for the amount borrowed.
- Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
Q: How much cash will I need to purchase a home?
A: The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
- Earnest Money: The deposit that is supplied when you make an offer on the house.
- Down Payment: A percentage of the cost of the home that is due at settlement.
- Closing Costs: Costs associated with processing paperwork to purchase or refinance a house.
Q: I’m thinking of moving to Colorado, where do I start?
A: We offer resources for international buyers on our web site that will answer most questions. If the resource you want is not listed, you may contact us by phone, email, fax, or through our web site and request additional information. We have contacts in many industries and we can help direct you to the resources you may be looking for. We do not charge for this service.
We recommend starting the home buying process with the loan so you have a budget to shop for a particular house. See our Buyer’s Information page.
Q: I’m thinking of selling my house. Should I sell it myself or use a Realtor?
A: Many people think the choice between a For Sale by Owner and hiring a Realtor is a choice between paying a commission and selling for free. Instead, it is the choice between learning the job of a real estate agent with one listing and no help, or paying an experienced professional to do the job. If you hire the best available agent, you are hiring someone who knows how to do the job and is not learning without supervision.
Q: How does the homebuyer tax credit work?
A: The homebuyer tax credit is available to anyone who has not owned a home for the previous three years. The home must be purchased on or after January 1 and before December 1, 2009. The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000. For more information on the homebuyer tax credit, click here.
If you have questions that are not addressed here, please Contact Us and we will gladly answer any remaining questions and include them on this FAQ page.
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