Financing

Learn about your financing here

  • The current home market allows a variety of mortgage financing options catering to the desires of buyers. The details of these plans can turn into confussing and disorientating, particularly as new types of loans are presented monthly. Check with your  CENTURY 21 Premiere agent for reliable lenders that service the Durango Colorado Real Estate market.

Who do you choose? 

If you talk to a mortgage broker or loan officer, he they will probably say the lender they work for is "the best" and give you a list of reasons why.  Then you shop the next lender and they say the same thing. Who do you trust?

Agents also have differing opinions and, as a group, their opinions have changed over time.  In the past, most would often recommend their lenders - because they almost always closed the deal.  This is important and referrals are most of the time very good.

But it is really up to you to determine what is the best loan for you. Ask about fees, points, interest rates and closing costs. Some lenders can charge thousands more in the long run but sound good up front.

It is often more important to choose a good loan officer, not the institution.  Loan officers have two jobs.  One is to be your advocate in getting the loan approved.  The other is to deliver quality loans.  You want someone who has proven dependable and ethical in the past -- someone you can trust.

They shouldn't be offended that you shopping them, and if they are not comfortable with that, then they obviously don't have the right loan for you.

All mortgage loans have one of these three parts:

As you discover more about the kinds of financing options, you should notice that a part loans appear to have additional favorable terms. That can suggest that those loans are, indeed, bargains (and it does pay to shop around), but generally it causes that those financing could have some feature that is less tantalizing to buyers. For starters, short term mortgages frequently have slightly lower interest rates contrasted to longer-term loans. Yet, the monthly payment for the equal amount of balance may be higher due to the fact that of the shorter term. Flexible rate financing options mostly have much lower interest rates to amend for the risk the borrower obtains that interest rates are able to appreciate in the future. solutions.

What is APR?

When you see a real estate advertisement that quotes a payment amount, it also must include a number called the APR.  That stands for "annual percentage rate."

When you apply for a mortgage, the lender is supposed to mail you a "good faith estimate" and a "truth in lending statement" within three business days.  The interest rate is quoted, along with the APR. The APR is always higher than the interest rate you are quoted.

Why?

Partly because APR is an artificial number.  It is not the actual rate on the loan and does not determine your monthly payment.  It is calculated according to a formula determined by the government and is designed to provide a method for comparing one mortgage offer against another, even when the rates, points, and fees differ. This is a good resource though for determining who you will be going with.

The following is a simplification of how the APR is calculated:

The lender totals up certain specific costs associated with the loan and the interest rate that was quoted to you.  Those costs are subtracted from the loan amount you inquired about.  That results in a figure lower than your loan amount.  Then the payment for your loan is calculated as if it were the payment on that lower amount.

As a result, the APR is always higher than the actual interest rate you are quoted.  The only exception is when the lender pays for all of your costs, which is often referred to as a no fee loan.  There really are fees, the lender is just paying them for you.

Budgeting is one of the key factors in reducing debt burden. Get proper budgeting tips and repayment plan from qualified professionals, consolidate your unsecured debts and enjoy a debt free life.

 

For more info on Lenders and Loan Officers, please contact our office to be connected to a  CENTURY 21 Premiere Agent who can give you some references to trusting loan officers.

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