Housing

Tips for Homebuyers
Find the Mortgage That’s Right for You

Community banks want to establish long-term relationships with their customers and take the extra steps necessary to give potential homebuyers the service and attention they need. Community banks are not only interested in helping a homebuyer purchase a home, but in helping them find a mortgage they can live with so they stay in the home as long as they want to. And in today’s challenging mortgage marketplace, community banks are stable, common sense lenders with money available to lend and a good source for families to turn to for their home financing needs.

Consider the following suggestions when considering a home purchase:

1.    Know your budget: how much you spend on rent, utilities, entertainment, clothing, food and transportation.
2.    Organize paperwork: pay stubs, W-2 forms, tax returns, and bank and investment statements.
3.    Check your credit report and bring it to your community banker. Credit reporting agencies must give you one free report annually. 
4.    Work with your community banker to find out how much you can borrow and which mortgage is right for you.
5.    Get pre-approved. It helps you shop for a home that fits your budget and shows sellers you are a serious buyer who can close on a home quickly.
6.    Learn as much as you can about the home buying process. Your community banker can help explain it to you. Look for classes on home buying and home maintenance. There are free online educational tools at www.hud.gov, www.federalreserve.gov/consumers.htm.
7.    Investigate if there are special first-time homebuyer loan or grant programs available to assist with down payment and closing costs.
8.    Ask your loan officer to carefully explain the wide variety of mortgage options available including rate adjustments and other loan features so that you aren’t surprised by payment increases down the road.  Don’t be taken in by promises of low payments and 100 percent financing.
9.    Request a written good faith estimate to compare the real costs of your mortgage. It will tell you what your interest rate, monthly payment and closing costs will be.
10.    Attend real estate open houses to learn what you are getting for your money and what fits your budget.

Fed Unveils Online Calculator for Consumers

The Federal Reserve Board announced the availability of an online mortgage comparison calculator that can help consumers shop for home loans. The calculator allows home buyers to compare monthly payments for different loans. It also allows home buyers to estimate the amount of equity they will build for up to six types of fixed-and adjustable-rate mortgages.

Shopping For a Mortgage?
Your Application May Trigger Competing Offers

If you apply for a mortgage, your inbox, answering machine, and mailbox may fill up quickly with competing offers from other mortgage companies. It’s not that the company you applied to is selling or sharing your information. Rather, it’s that creditors – including mortgage companies – are taking advantage of a federal law that allows them to identify potential customers for the products they offer, and then market to them. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know why your application for a mortgage may trigger competing offers, how you can use them to your benefit, and how to stop getting them if that’s your choice.

The unsolicited calls, emails, and letters about competing offers often are called “prescreened” or “pre-approved” offers of credit. They are based on information in your credit report that suggests you meet criteria set by the creditor making the offer – for example, you live in a certain zip code, you have a certain number of credit cards, or you have a certain credit score. Credit bureaus and other consumer reporting companies sell lists of consumers who meet the criteria to insurance companies, lenders, and other creditors.

When you apply for a mortgage, the lender usually gets a copy of your credit report. At that point, an “inquiry” appears on your report showing that the lender has looked at it. The inquiry indicates you’re in the market for a loan. That’s why mortgage companies buy lists of consumers who have a recent inquiry from a mortgage company on their credit report. Federal law allows this practice if the offer of credit meets certain legal requirements.

Clearly, some mortgage companies benefit from the practice. But the FTC says consumers can benefit, too: prescreened offers can highlight other available products and make it easier to compare costs while you carefully check out the terms and conditions of any offers you might consider.

Still, some people may prefer not to receive prescreened offers of credit and insurance at all. Here’s how to stop them:

1. Call 1-888-5-OPTOUT (1-888-567-8688) or visit www.optoutprescreen.com. When you call this toll-free number or visit the website, you will be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential, and will be used only to process your request to opt out. Don’t enter any personal information until you have checked for indicators that the site is secure – a lock icon on your browser or a web address that begins https.

Opting out of prescreened offers does not affect your ability to apply for credit or to get it. Your opt out request will be processed within five days, but it may take up to 60 days before the prescreened offers stop coming. If you have a joint mortgage, both parties need to opt out to stop the prescreened offers. If or when you want to opt back in, use the same telephone number or website.

2. Put your phone number on the federal government’s National Do Not Call Registry to reduce the telemarketing calls you get at home. To register your phone number or to get information about the registry, visit www.donotcall.gov, or call 1-888-382-1222 from the phone number you want to register. You will get fewer telemarketing calls within 31 days of registering your number. Your number stays on the registry for five years, until it is disconnected, or until you take it off the registry.

That said, the Federal Trade Commission wants you to know that many companies use other tools to identify marketing prospects, and that the Do Not Call Registry won’t shield you from all telemarket­ers – for example, those with which you have a business relationship. Even if you opt out of prescreened offers and put your number on the National Do Not Call Registry, you can expect some unsolicited offers.

For more information about the Fair Credit Reporting Act, the law that spells out the terms under which companies can check credit reports, visit www.ftc.gov/credit.

The Federal Trade Commission works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The Federal Trade Commission enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Connecting to Your Community
coloradohousingsearch.com - a FREE statewide home search and listing service for affordable rental and for-sale housing

Search for and list:

• Affordable rentals
• Section 8 rentals
• Tax credit rentals
• Special Needs housing
• Affordable housing for sale
• Community services

Brought to you by:

• Colorado Housing and Finance Authority
• Colorado Department of Local Affairs/Division of Housing
• The City of Denver
• United States Department of Agriculture Rural Development

Office of Community Planning and Development-Department of Housing and Urban Development. The Office of Community Planning and Development (CPD) seeks to develop viable communities by promoting integrated approaches that provide decent housing, a suitable living environment, and expand economic opportunities for low and moderate income persons. The primary means towards this end is the development of partnerships among all levels of government and the private sector, including for-profit and non-profit organizations. Financial Education is a principal component of CPD initiatives.

Office of Housing-Department of Housing and Urban Development. The Department of Housing and Urban Development is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. HUD's Housing Counseling program provides advice on buying a home, renting, defaults, foreclosures, credit issues and reverse mortgages through HUD-approved counseling agencies throughout the country.

Office of Public and Indian Housing-Department of Housing and Urban Development. The Office of Public and Indian Housing (PIH) ensures safe, decent, and affordable housing, creates opportunities for residents' self-sufficiency and economic independence, and assures the fiscal integrity of all program participants. Financial Education is a principal component of the Resident Opportunities and Self Sufficiency Program (ROSS) which links public housing residents with supportive services, resident empowerment activities, and assistance in becoming economically self-sufficient.

Freddie Mac CreditWorks. Freddie Mac has established a program through which lenders offer mortgages to borrowers who have completed at least an 18-month debt management plan through one of the program's participating counseling agencies. The debt management plans put families on a strict budget that requires that a certain percentage of their income go to living expenses with the remainder to pay down debts. This program allows families with impaired credit to qualify for secondary market eligible mortgages much faster than would otherwise be possible.

Homeownership Counseling-The U.S. Department of Housing and Urban Development certifies and funds housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages. The American Homeownership and Education Counseling Institute was formed in 1996 to establish national accreditation standards for providers of counseling, to develop a core curriculum for counseling, to research the costs and benefits of counseling, to establish means for self-financing of counseling initiatives, and to establish a clearinghouse for counseling materials and methods.

NeighborWorks Network-Campaign for Homeownership. This joint four-year effort of banks, insurance companies, the secondary market, government, the real estate industry, and others working with more than 100 local Neighborhood Housing Services (NHS) organizations aims to educate families, create new low- and moderate-income homebuyers, and generate of investment. By teaching these consumers about homeownership and preparing them to be homeowners through pre- and post-purchase counseling, local NHS organizations reduce the risk of delinquency and foreclosure. Banks partnering with NHS organization refer borrowers to a local NHS organization for counseling, with some banks actually participating in the counseling. Lenders work with the NHS organization to create mortgage products with features like lower down payments that are tailored to this market.

Fannie Mae-Find A Credit Counselor. These agencies are primarily community-based nonprofit groups that specialize in pre-and post-purchase homeowner education and credit counseling. Some of these agencies also provide homeowner education classes for borrowers who use Fannie Mae's Community Home Buyer's Program and other loan products that require such education as part of the loan approval.

Freddie Mac-Homebuyer Resources. These credit, mortgage finance, and home-buying resources are designed to assist prospective homebuyers and existing homeowners. Recognizing and Avoiding Abusive Lending Practices-Freddie Mac "Don't Borrow Trouble" Campaign. Don't Borrow Trouble is an award-winning anti-predatory lending campaign educating people on how to avoid predatory lending practices that can strip the equity from a home. Local campaigns are active in dozens of cities protecting families, homes and communities from unscrupulous lending practices. The campaign uses a combination of advertisements and public service announcements to educate borrowers about predatory lending practices.