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RIFLE, COLORADO - The once steady trail of mortgage applications to bankers’ desks in Western Garfield County has slowed over the past year, partly due to the present state of the economy and difficulties in getting home loans approved.
All kinds of people are trying to get mortgages to pay for a home, but some are hit harder when it comes time for them to try and locate that money for a home.
Mortgage Banker Don Mundy sees around a half dozen mortgage applications on his desk at Bank of Colorado in Rifle each week. He covers Rifle, Glenwood Springs, Basalt, Delta, Olathe and Montrose.
“That’s significantly lower than a year ago,” he said. “With talking to other bankers, applications are down by about half.”
Jay Rickstrew, president of Alpine Bank-Rifle, sees two big issues when it comes to individuals trying to get a mortgage: Clean credit history and down payments.
“Mortgages nationally are tough to get and that’s trickled down to us. To give yourself the best chance, your credit history needs to be good,” he said. “For a while, you could get a mortgage with bad credit, no way now. And a rule of thumb on down payments, historically it’s about 20 percent.”
For those who already have a mortgage, make sure payments are up to date.
“Take care of your mortgage first,” Mundy said. “Missing that one time will hurt you more than missing a credit card payment.”
If you are having trouble making payments, get with your lender sooner rather than later, Rickstrew said.
“You can’t get yourself in a hole,” he added. “If you’re starting to feel the pain, you can’t make payments, meet with your lender. If the lender gets backed into a corner, he has to do something.”
Self-employed people can run into some issues when applying for a mortgage, too. While the guidelines haven’t changed, many lenders require full-documentation of your financial history, dating back two to three years.
“It can be double-edged,” Mundy said. “You can write off some of your earnings for less taxes. But the banker will say that ‘you wrote it off’. So what can be shown for income? Your stated income has gone by the wayside.”
Self-employed individuals don’t necessarily get a paycheck everyday, and that can hurt them, Rickstrew added.
“There has to be verifiable income that isn’t spotty,” Rickstrew said. “There used to be programs that did mortgages on no income verification. These are gone now. You have to have verified income.”
Foreclosures up
Area foreclosures are “certainly up, but we’re doing a lot better than other places,” Mundy said.
“We have a diversified economy here with the drill patches and all that industry brings,” he added. “Some places like Greeley, those neighborhoods have more (foreclosures).”
“We’ve been very insulated,” Rickstrew said. “My concern is that the price of natural gas has dropped in the last 60 days. When the price goes down, the profit margins get bigger. So, I think that is something we should keep an eye on. We’re insulated, but we’re not out of it yet.”
Foreclosures drive down the value of homes and the housing market. Fluctuating interest rates are also causing problems.
“We’re not going to know where the bottom is, that’s the scariest thing,” Mundy said. “We have to slow down foreclosures to turn the corner. With the uncertainty of where interest rates are going, from 7 percent up to double digits, no one knows where the rates will be.”
He also thinks there should be a freeze on all adjustable rate mortgages.
“Freeze it at the start rate,” he said. “If they’re paying what the starting rate was, just keep it right there.”
Mundy stated that the Front Range is No. 6 in the country in foreclosures, and, overall, Colorado is No. 3 in the country, behind California and Nevada.
“Western Colorado has been luckily insulated,” Mundy said. “We’re not quite as dire as many parts of the country because we don’t really have diminishing jobs. When the recovery comes, we’ll bounce back quicker than other parts of the state.”
All kinds of people are trying to get mortgages to pay for a home, but some are hit harder when it comes time for them to try and locate that money for a home.
Mortgage Banker Don Mundy sees around a half dozen mortgage applications on his desk at Bank of Colorado in Rifle each week. He covers Rifle, Glenwood Springs, Basalt, Delta, Olathe and Montrose.
“That’s significantly lower than a year ago,” he said. “With talking to other bankers, applications are down by about half.”
Jay Rickstrew, president of Alpine Bank-Rifle, sees two big issues when it comes to individuals trying to get a mortgage: Clean credit history and down payments.
“Mortgages nationally are tough to get and that’s trickled down to us. To give yourself the best chance, your credit history needs to be good,” he said. “For a while, you could get a mortgage with bad credit, no way now. And a rule of thumb on down payments, historically it’s about 20 percent.”
For those who already have a mortgage, make sure payments are up to date.
“Take care of your mortgage first,” Mundy said. “Missing that one time will hurt you more than missing a credit card payment.”
If you are having trouble making payments, get with your lender sooner rather than later, Rickstrew said.
“You can’t get yourself in a hole,” he added. “If you’re starting to feel the pain, you can’t make payments, meet with your lender. If the lender gets backed into a corner, he has to do something.”
Self-employed people can run into some issues when applying for a mortgage, too. While the guidelines haven’t changed, many lenders require full-documentation of your financial history, dating back two to three years.
“It can be double-edged,” Mundy said. “You can write off some of your earnings for less taxes. But the banker will say that ‘you wrote it off’. So what can be shown for income? Your stated income has gone by the wayside.”
Self-employed individuals don’t necessarily get a paycheck everyday, and that can hurt them, Rickstrew added.
“There has to be verifiable income that isn’t spotty,” Rickstrew said. “There used to be programs that did mortgages on no income verification. These are gone now. You have to have verified income.”
Foreclosures up
Area foreclosures are “certainly up, but we’re doing a lot better than other places,” Mundy said.
“We have a diversified economy here with the drill patches and all that industry brings,” he added. “Some places like Greeley, those neighborhoods have more (foreclosures).”
“We’ve been very insulated,” Rickstrew said. “My concern is that the price of natural gas has dropped in the last 60 days. When the price goes down, the profit margins get bigger. So, I think that is something we should keep an eye on. We’re insulated, but we’re not out of it yet.”
Foreclosures drive down the value of homes and the housing market. Fluctuating interest rates are also causing problems.
“We’re not going to know where the bottom is, that’s the scariest thing,” Mundy said. “We have to slow down foreclosures to turn the corner. With the uncertainty of where interest rates are going, from 7 percent up to double digits, no one knows where the rates will be.”
He also thinks there should be a freeze on all adjustable rate mortgages.
“Freeze it at the start rate,” he said. “If they’re paying what the starting rate was, just keep it right there.”
Mundy stated that the Front Range is No. 6 in the country in foreclosures, and, overall, Colorado is No. 3 in the country, behind California and Nevada.
“Western Colorado has been luckily insulated,” Mundy said. “We’re not quite as dire as many parts of the country because we don’t really have diminishing jobs. When the recovery comes, we’ll bounce back quicker than other parts of the state.”
