Home Purchase Loans In Pueblo

Home prices in Pueblo, Colorado, have dropped 7.0% yearly in the current housing market. Pueblo homes are on the market for an average of 35 days. 

Purchase Loan Options in Pueblo

Pueblo, Colorado, home buyers have plenty of home loan programs to choose from. The most prevalent among them are the following:

• Conventional Home Loans

A conventional home loan in Pueblo, Colorado, refers to a mortgage that lacks federal government insurance or guarantee. Private lenders typically provide these loans, generally seen as having more rigorous qualifying requirements than government-backed loans. Conventional loans have a variety of advantages, such as the potential for reduced interest rates for individuals who satisfy the eligibility criteria. Conventional loans can either be conforming or non-conforming.

A conventional conforming loan is a mortgage that follows strict rules and is therefore eligible for purchase by Fannie Mae or Freddie Mac. Loan size limits and borrower criteria are frequently included in these rules. On the other hand, a non-conforming loan falls short of these standards and is therefore ineligible for purchase by these government-sponsored enterprises. As a result, non-conforming loans may have higher interest rates and go through a different underwriting process.

The flexibility of a down payment of 3 – 5% of the home’s value is frequently one of the primary advantages of a conventional-conforming home loan. Borrowers must, however, have a credit score of at least 620 to qualify for such a loan. Other important factors, such as debt-to-income (DTI) ratios, may also be evaluated, with some lenders preferring a DTI of less than 45%.

The 2023 conforming loan limits in Pueblo, Colorado, are $726,200 for a single-unit home, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a quadplex.

• FHA Home Loans

An FHA home loan in Pueblo, Colorado, is a mortgage insured by the Federal Housing Administration under the jurisdiction of the United States Department of Housing and Urban Development (HUD). This insurance allows lenders to give more liberal terms to borrowers, such as lower down payments and less stringent credit score criteria. This makes FHA loans appealing to first-time homebuyers or those with less-than-perfect credit.

Conventional loans, on the other hand, are not insured by the federal government. They frequently have more rigid eligibility requirements, such as higher credit scores and bigger down payments. Conventional loans typically require a credit score of at least 620. Conventional loans may sometimes offer cheaper interest rates to applicants with excellent credit, although FHA loans usually have uniform rates regardless of creditworthiness.

FHA loan eligibility requirements typically include a lower minimum credit score of 580. FHA loans usually require a minimal down payment of 3.5 percent, whereas conventional loans require 5 percent, but highly qualified borrowers may qualify for a 3 percent down payment. Additionally, conventional loans require the applicant to have a debt-to-income ratio (DTI) below 45%, and some may require private mortgage insurance (PMI) if the down payment is less than 20%.

The 2023 FHA loan limits for Pueblo, Colorado, are $472,030 for a one-unit home, $604,400 for a duplex, $730,525 for a triplex, and $907,900 for a quadplex.

• VA Home Loans

A VA home loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs (VA). This program is only available to American veterans, military members presently serving in the United States military, reservists, and certain surviving spouses. Compared to conventional loans, the VA loan allows qualified individuals to acquire a home without a down payment. Furthermore, VA loans have lower interest rates and less stringent credit standards. To be eligible for a VA loan, you must have served at least 90 days consecutively during wartime or 181 days during peacetime. In addition, you must receive a Certificate of Eligibility (COE) based on your service history and current duty status.

A conventional loan, on the other hand, is not backed by the government. Anyone who meets the lender’s financial criteria can obtain a conventional loan. A minimum credit score of 620 and a down payment of at least 3% are usually required for these loans. Private mortgage insurance (PMI) is required if you put less than 20% down on a conventional mortgage. 

The primary distinction between VA and conventional loans is their eligibility requirements and features. VA loans are restricted to owner-occupied properties only, do not require a down payment or private mortgage insurance, and typically have reduced interest rates. However, a one-time VA funding fee is required. Conventional loans can be used for primary residences, second homes, and investment properties but require a down payment and private mortgage insurance (PMI) if the down payment is less than 20%. While the VA does not designate a minimum credit score for VA loans, many lenders require a score of 620 or higher. Typically, conventional loans require a minimum credit score of 620.

• USDA Home Loans

In Pueblo, Colorado, a USDA home loan is a mortgage assistance program meant to help low- to very-low-income applicants get good, safe, and sanitary homes in qualifying rural areas. The United States Department of Agriculture (USDA) administers this program, providing direct and guaranteed loan options. The primary purpose is to provide payment support to people who are financially disadvantaged and want to buy a home in rural areas.

Direct Home Loans and Guaranteed Loans are the two primary categories of USDA home loans. The USDA provides Direct Home Loans directly to the borrowers. This loan type is intended to help applicants unable to obtain a loan at a reasonable rate from other lenders. The Guaranteed Loan Program, on the other hand, involves private lenders but comes with a USDA guarantee. Although this program has no specific credit score requirements, applicants must exhibit a willingness and capacity to handle debt. It provides loan guarantees to individuals who meet specific financial standards.

These loan types have different eligibility restrictions. Applicants for Direct Home Loans must be very low to low income and unable to acquire financing from other lenders. While there are no rigorous credit score requirements for Guaranteed Loans, the applicant must demonstrate a capacity to manage debt. Property requirements and income constraints are also important considerations for deciding eligibility. Furthermore, to be approved for either loan type, one must live in an appropriate rural area.

• Jumbo Home Loans

A jumbo home loan is a type of mortgage that exceeds the Federal Housing Finance Agency’s (FHFA) conventional conforming loan limits. This loan enables you to realize your goal of purchasing a high-value property in Pueblo, Colorado. Unlike conventional loans, Jumbo loans allow you to borrow a substantial amount all at once, making them ideal for high-end or luxury real estate properties.

Key characteristics of a jumbo loan include larger loan limits, flexibility regarding the types of properties that can be financed, and the ability to have co-borrowers on the loan. You can use a jumbo home loan for various property categories, including primary residences, investment properties, and vacation homes. This is one of the most significant benefits of obtaining a jumbo mortgage. These loans typically come with flexible repayment terms that can be adapted to your financial circumstances.

There are a few essential criteria that lenders consider when determining eligibility. Typically, borrowers should have excellent credit, with a FICO score of 740 or higher. In addition, a considerable down payment of 15 to 20% is frequently required, and lenders may also need at least six months’ worth of cash reserves and a low debt-to-income ratio of less than 43%. 

Apply for a Pueblo Home Purchase Loan

Capital Home Mortgage is a direct lender and servicer of mortgages in Pueblo, Colorado, offering consumers various mortgage options. Capital Home Mortgage can identify the financing option that best fits your requirements and budget, regardless of whether you were born in Colorado or are a newcomer. If you need a mortgage to purchase, refinance, or consolidate your loans, we are here to help.

Call (303) 226-1177 to speak with a Pueblo Home Loan Specialist.