How does the $2,500 Down and $0 Down Loans Work?
There are FIVE basic loans that most renters can qualify for:
1. 3.5% Down FHA 30-Year Fixed rate
2. $2,500 "Total Cash" FHA 30-Year Fixed rate
3. $2,500 Down Conventional 30-Year Fixed rate
4. $0 Down USDA (north of Denver: Erie, Firestone, etc)
5. $0 Down Conventional loan
The easiest loans to qualify for are the FHA (Federal Housing Authority)
loans. On a $400,000 loan, you'd need a 3.5% Down Payment - or
$14,000 with a 580+ minimum credit scores.
The $2,500 "Total Cash" Down FHA 30-year fixed rate loan - is the 'same' basic FHA loan,
but you need a 620+ minimum credit score PLUS your annual household gross income must be below $120,100, to qualify for this $2,500 down program. The $120,100 is $10,008 per month income. Please call me at 303-622-5700, and I'll explain this FANTASTIC loan program, saving you $13,000 cash out-of-pocket on a $400,000 home!!
The $2,500 "Total Cash" Down Conventional 30-year fixed rate loan - yes, only $2,500 down payment! You'll need a 620+ minimum credit score PLUS your annual household gross income must be below $120,100, which is $10,008/month to qualify for this cool loan.
The true "secret" loan is the $0 Down USDA loan that's ONLY available in the northern Denver Metro cities like Erie, Frederick, Dacono, Firestone, Fort Lupton, Mead, Berthoud, Johnstown, and south of Denver in Larkspur, east of Falcon and Payton. These true $0 Down loans require a 640+ minimum credit score, and can be used at ALL the New Home Builders in these areas too! These loans were created to "help further home development" in outlying more rural areas by the US Government and have the similar qualifying criteria like the FHA loans!
The coolest new $0 Down loan is a $0 Down Conventional loan which requires a 700+ fico score and debt-to-income ratios up to 43%. This new loan from Credit Union of Colorado offers the standard 3% down payment as an "assistance" or second loan at a slightly higher interest rate. The 97% fixed rate 30-year first mortgage loan and an interest free second mortgage for up to 3% of the total loan require NO down payment! The two loans work together to equal 100% financing for your first home.
This chart below will give you a pretty good idea on mortgage loan payments, based upon the home price you are interested in:
Loan Principle & Taxes/ Insurance/ FHA HOA/ P.I.T.I. TOTAL Est’d Monthly Income
Amount Interest month month M.I.P. month? Payment needed (31-40%) to Qualify
$325,000 $1,645 $108 $106 $230 - $2,163 $5,400-$7,000
$350,000 $1,774 $141 $106 $247 - $2,345 $5,670-$7,320
$375,000 $1,985 $144 $106 $265 - $2,499 $6,300-$8,060
$400,000 $2,027 $159 $106 $283 $49 $2,693 $6,730-$8,690
$425,000 $2,250 $187 $106 $300 - $2,843 $7,100-$9,170
$450,000 $2,280 $216 $106 $318 - $2,920 $7,300-$9,420
BTW - not all Subdivisions have Home Owners Associations (HOA's) - but
many popular newer Subdivisions do have them. Highlands Ranch has
1 main HOA, but some of the other subdivisions in Highlands Ranch have
a second HOA. The main HOA fee for most Highlands Ranch homes is
$592/year - or about $49/month. Castle Rock homes in The Meadows
HOA fee is about $72/month - and the popular newer Reunion subdivision
in Commerce City HOA is about $33/month.
The term P.I.T.I - is the total house payment with Principle, Interest,
Taxes & Insurance. In my example above, I included a $49 HOA on the
$400,000 loan, so in Highlands Ranch - you'd pay about $2,693/month
with the extra $49 HOA.
If you choose a loan with a down payment - that money can come from your savings, 401k's - or even a 'gift' from your Mom & Dad, Grandma & Grandpa, brother and sisters, or even your employer.
We’ll discuss “seller paid” closing costs – when you call me! It’s very likely we can go out “house shopping” with you only needing about $2,500-$3,000 cash to close on a beautiful home, as I'm typically able to have the Sellers pay your closing costs & loan pre-paids. I would say that about 80-85% of ALL the home sales I’ve done for renters and first time home buyers – this was all the money they needed to BUY a home. When you get really good expert help, all joking aside, it’s often easier to BUY a nice home, than it is to buy a car!
Let’s discuss YOUR specific renting/home buying situation right now. Simply call me – and we'll get going turning you into a home OWNER instead!
“$100+ Million Personally SOLD/Closed Since 1998”
p.s. - With the 7-10% or so increases in Denver Metro area home prices over the last 3-4 years - most nice neighborhoods keep pricing renters out of buying homes! Quit procrastinating and CALL ME – I’ll help you get finally get “APPROVED” to buy your home - instead of paying your Landlords mortgage loan.