Understanding all the aspects of a Real Estate purchase in Steamboat Springs is what we do well at Buyer’s Resource. From the inspection period to the title work and all the minor nuances are important aspects to appreciate and understand. One of the most important is, of course, lending. Even though interest rates are at historic lows there are still ways to save, possibly, thousands of more dollars through the term of the loan. One of these is through Origination points.

  

Origination points are often misunderstood. Points are nothing other than interest paid at the time of closing to obtain a lower interest rate on a loan. One point is equivalent to 1% of the loan amount. If you are going to borrow $300,000 on your loan, one point would equal $3,000. This generally generates 1/8 to 3/8 of a percent lower interest rate, depending upon the loan program. As always, current market conditions dictate what the best choice will be at the time you want to buy a home.

  

When deciding whether or not you should pay points, take into consideration where interest rates are at when you seek financing. Compare that to historical market trends. When interest rates are low it makes more sense to pay points, particularly if you think you will be living in the property for an extended period of time. When rates are higher then historical norms it probably isn’t prudent to pay for points because there is a strong likelihood that the interest rates will come down again will bring up the opportunity of refinancing. If you refinance too early then you would lose the money that you spent buying down the points.

  

Another strategy when negotiating the price of a property and you have reached an impasse is to pay a little more for the home and have the Seller buy down the interest points. This could be a win-win situation as the Seller gets the higher dollar amount while you, the Buyer, could save the extra money that you have paid for the property over the length of the loan. In some cases it may even help a Buyer qualify for a higher loan amount.

  Being savvy with the entire purchasing process is what we pride ourselves in at Buyer’s Resource.   

What a great feeling of exhilaration one has when initially finding out that you are under contract. Be it your first home, a family getaway condo or your retirement property. It is a feeling of accomplishment and achievement. The process of working toward a successful closing is underway. The appraisal has been ordered from your lending institution and the home inspector has been scheduled. Your Steamboat Springs Exclusive Buyer’s Agent has prepared a detailed list of check list items like change utilities over to your name and secure property insurance. You’re comfortable in the fact that your Exclusive Buyers Agent will help guide you through the four to six week process. In fact you’re so comfortable that you decide to reward yourself and open up a new charge account and refurbish your wardrobe. Oops!

  

Our best advice is that during this process you develop a new relationship, a very close relationship, with your loan officer or mortgage broker. The entire lending climate has changed in the past year and is still in a mode of flux. Every week seems to bring new changes, stipulations and horror stories to the Real Estate world. Although your Exclusive Buyers Agent can use their knowledge and expertise to council you through a myriad of issues they are neither attorneys nor bankers. No matter how hard they try there is no possible way that they can keep up with all the changes occurring in the lending industry. Quite frankly even people who work full time in that industry are barely keeping their head above the knowledge waters.

  While you are under contract the lending underwriters have you under great scrutiny. They are looking for anything even slightly out of the ordinary, constantly monitoring credit scores and recent transactions. Are you transferring monies from business accounts to personal accounts? Opening or even closing credit card accounts? Purchasing new vehicles or changing jobs? All are red flags that may impede and/or cancel the lending process that you have undertaken. Any significant financial transaction (and even some that you believe to be trivial) should be reviewed and approved by your loan officer or mortgage broker.   We understand that this process seems to be tremendously invasive but for the four to six weeks that it will take to muddle through this process just be on your best behavior and tred lightly on those pins and needles of money management.