Neuswanger: Loan options for local buyers in the Vail Valley (column)
The Mountain Mortgage Guy
Ever since Vail opened in 1962 it seems there has been a shortage of available housing for local employees. Few know that where the Potato Patch Club sits there once was a mobile home park housing some of the first individuals who personified the genre of ski bums. Indeed, some of Vail’s more respectable and successful residents today once resided there.
But most people ultimately want to own a home, and combining that dream with owning a home in Eagle County can be daunting. The primary challenge being the price of housing and getting a down payment saved up, and the challenge of qualifying for a mortgage if one holds several seasonal or part-time jobs throughout the year.
But fear not, prospective homebuyer, others have gone before you and figured it out. Getting there might mean taking life more seriously for a year or two first, but it often can be accomplished.
There really are many options that might help. Buyers do have to have verifiable income and enough of it (that means you might have to report your cash tips for a few years), but if you work the same seasonal jobs for two years, or do the same type of work, we can often piece together the income stream side of things. If you work as a river guide one summer and a golf starter the next year you won’t be able to count that part of your income though. Lenders like consistency in career paths, even for river guides or golf starters so you will need to stick with the same line of work consistently.
Buyers also have to have at least decent credit, and generally no open collections or charge off accounts in the last few years. You should check your credit report at least once a year with all three bureaus to make sure there is no incorrect information there. A good way to improve your credit score is to pay down your accounts to less than 40 percent of your credit limit, and pay more on newer accounts. A new account that is a few months old and maxed out will lower your credit score more than an older account with the same balance. We often work with buyers a year or more before they are ready to buy advising them on how to get a good credit score.
In terms of down payment, 5 percent of the purchase price is a good goal but you might be able to get by with less. There is one program you might qualify for that will fund 100 percent of the purchase price. This program has some pretty sticky restrictions and is about the only program you can be disqualified for if you make too much money. Another popular program will work with 3 percent down, but not on a condo purchase (the property would have to be a single family or townhome or duplex).
Another option for Veterans is a VA loan. These can go to 100 percent loan-to-value and don’t have any income caps. There are some ins and outs of qualifying though.
There are also some loan programs from Eagle County that might help you with a low interest down payment loan, but these are not for everyone and take some careful thought to see if it is the right fit even if you do qualify.
There are some alternative documentation programs starting to show up that are easier in terms of documenting undocumented income, but they generally require a down payment of 20% or more and require pristine credit.
Chris Neuswanger is a mortgage loan originator with Macro Financial Group in Avon and may be reached at 970-748-0342. He welcomes mortgage related inquiries from local readers. His blog and a collection of his columns is at http://www.mtnmortgageguy.com