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Hitting Home
Affording, Financing, and Staying in Your Home
Affording and Financing Your Home
Spring is a major home-buying and -selling season. Owning
a home is still a great way to build wealth, but many things have changed
in Colorado and consumers need to be aware of those changes before making
financing decisions they could later regret.
Home Appreciation Rates
People who have lived and owned property in Colorado for a while remember
when homes were appreciating at a tremendous rate. It was not unusual
to make large sums of money after owning a home for only a few years.
However, home appreciation rates have slowed significantly over the last
few years.
Appreciation is when something increases in value over time.
A house tends to appreciate when: inflation rates increase, surrounding
housing is larger and well kept, and the local economy is in a growth
period.
The Office of Federal Housing Enterprise Oversight reported metro Denver
home appreciation grew 4.2 percent for fiscal 2004, placing it near the
bottom for metro areas in Arizona, California, Nevada, Washington, Oregon,
Wyoming, Montana, New Mexico, Idaho, Texas and Utah. The only Western
state metro areas with lower appreciation rates in 2004 were Boulder;
Dallas; Austin, Texas; and Ogden, Utah. The average appreciation rate
nationwide in 2004 was 8.3 percent.
Median prices
Denver's median home price of $239,100 remained above the U.S. median
of $184,100 for 2004. The median price for a condo or townhome was $155,000.
These median prices continue to grow. At these prices, your monthly payment
at current rates would be about $1,385 for a single family, median priced,
home and $900 for a condo or townhome, provided you can qualify for the
best rates.
Personal Income Growth
Colorado ranked 37th in personal income growth between the second and
third quarters of 2004. Adjusted for inflation, per capita personal income
is currently below its 2000 peak. In other words, when thinking about
purchasing a home, don't count on significant increases in earnings.
Not a Sellers Market
Although the number of home sales in Denver has increased about 55% over
last year, the number of homes on the market is rising. This means that
sellers have more competition and buyers may be able to negotiate on pricing.
Colorado's housing market is still in a "bubble."
More House than You Can Afford
Many consumers fall prey to buying more home than they can afford in the
long run. Sometimes it happens when special options are added to the price
of a home or when comparing floor plans and models. Take care to compare
builders and neighborhoods for features that you are looking for and always
keep price vs. value in mind.
Financing Options
With mortgage rates rising again, potential buyers may still not be able
to afford a home on their own. If you are a first time home-buyer, there
may be programs to help you with down payments. Contact a housing counselor
listed on page 2 for more information.
Staying in Your Home
Things can happen to people that may prevent them from making
a mortgage payment. The trends in Colorado show that many people are experiencing
extreme financial difficulty. In 2004, more than 27,500 Colorado households
and businesses sought bankruptcy protection and foreclosures were up 18
percent - the second worst year on record.
If you find yourself in a bind, the best and first thing
to do is contact your lender before you miss a payment. The longer you
wait, the larger the late fees and the more difficult it will be for you
to recover.
Mortgage lenders offer programs called "workouts".
They will often make arrangements with you to pay payment and one half
for the next two payments. Sometimes they will offer loan modifications
to make the loan more affordable.
Housing Counselors Can Help
There are many organizations throughout the state that help
people who are in danger of foreclosure. These Housing and Urban Development
(HUD) certified housing counseling agencies can help you with negotiating
with your mortgage company and will help you understand the process. Most
also provide pre-purchase programs.
Qualifying for your first home can sometimes be a challenge.
If you have some credit problems, or if you need help with a downpayment
for your home, a housing counselor may be able to help.
CITY OF AURORA COMMUNITY DEVELOPMENT DIVISION
Phone: 303-739-7900
BOULDER COUNTY HOUSING AUTHORITY
Phone: 303-441-1544
CONSUMER CREDIT COUNSELING SERVICE OF GREATER DENVER
Greater Metro area, including Boulder and I-70 corridor west to Grand
Junction and Durango
Phone: 303-632-2227
CCCS OF GREATER DALLAS-COLORADO SPRINGS & PUEBLO
Phone: 719-576-0909
ADAMS COUNTY HOUSING AUTHORITY
Phone: 303-227-2075
ACORN HOUSING, DENVER, CO
Phone: 303-388-1989
BROTHERS REDEVELOPMENT, INCORPORATED
Denver
Phone: 303-202-6340-234
CATHOLIC CHARITIES OF DENVER, CO
Phone: 303-742-0828
COLORADO HOUSING ASSISTANCE CORPORATION
Phone: 303-572-9445
DEL NORTE NEIGHBORHOOD DEVELOPMENT CORPORATION
Denver
Phone: 303-477-4774
HOPE COMMUNITIES
Denver
Phone: 303-860-7747
NEWSED COMMUNITY DEVELOPMENT CORPORATION
Denver
Phone: 303-534-8342-101
NID-HCA ENGLISH
Denver
Phone: 303-377-3375
NORTHEAST DENVER HOUSING CENTER
Denver
Phone: 303-377-3334
ROCKY MOUNTAIN MUTUAL HOUSING ASSOCIATION
Denver
Phone: 303-388-9613
SOUTHWEST IMPROVEMENT COUNCIL
Denver
Phone: 303-934-8057
HOUSING SOLUTIONS FOR THE SOUTHWEST
Durango
Phone: 970-259-1086 x15
CCCS OF NORTHERN COLORADO & SE WYOMING
Fort Collins, Greeley, Longmont, Loveland, Sterling
Phone: 970-229-0695
NEIGHBOR TO NEIGHBOR
Fort Collins, Loveland
Phone: 970-484-7498
TRI-COUNTY HOUSING, INCORPORATED
Fowler
Phone: 719-263-5168 x22
CATHOLIC CHARITIES OF THE DIOCESE OF PUEBLO,
Pueblo
Phone: 800-303-4690
NEIGHBORHOOD HOUSING SERVICES OF PUEBLO, INC
Pueblo
Phone: 719-544-8078
COLORADO RURAL HOUSING DEVELOPMENT CORPORATION
Westminster
Phone: 303-428-1448 x202
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