Navigating Financial Hardship and Mortgage Rate Increases in Colorado's Front Range and Metro Denver

What to do when your 2-1 buydown ends?

Owning a home along Colorado's Front Range and in Metro Denver is a significant achievement. However, factors such as the end of a 2-1 mortgage buy down or unforeseen financial hardship due to COVID-19 can jeopardize homeowners. In this article, we aim to provide guidance to homeowners in Colorado's Front Range and Metro Denver, free from judgment about the reasons behind their need for support, even in a post-COVID world. Our objective is to equip you with the essential tools and resources to secure a brighter financial future. So, with that said, if you're asking, "what are my options when my 2-1 buy down ends?" You're in the right place!

Understanding Mortgage Payment Increases

Let's clarify the two common scenarios homeowners might face:

1. 2/1 Mortgage Buy Down Expiration

   A 2/1 mortgage buy down provides initial payment relief for two years but is followed by interest rate and payment increases, especially impactful in Colorado's high-cost real estate market.

2. Financial Hardship Due to Various Causes, Including Post-COVID

   Financial challenges can arise from various factors, including job loss, medical bills, or the ongoing economic impact of events like COVID-19.

    

Option 1: Local Assistance Programs for Post-COVID Financial Hardship

Regardless of the reason, awareness of local assistance programs is crucial:

• State Programs

  Colorado offers state-level assistance programs, including mortgage forbearance. Contact the Colorado Housing and Finance Authority (CHFA) for information on regional programs.

• Denver Metro Area Resources

  The Denver Housing Authority (DHA) and local nonprofit organizations provide support for homeowners facing financial hardship due to COVID or other causes.

• Community Support

  Explore local organizations that offer tailored assistance or learn more about our Mortgage Relief Program that releases you from the responsibility of your mortgage and allows you to stay in your home for 3 years.

   

Option 2: Selling Your Home

If you're unable to continue homeownership in the costly Denver market, consider this option:

• Control of Your Future

  Selling your home on your terms can help you avoid foreclosure, especially in a region with substantial home values. The catch is, you can't wait for the last minute. If you're considering selling, contact us for a home selling consultation so this at least remains an option for you.

   

Option 3: Leasing Your Home

Leasing your home can provide a consistent income stream while retaining ownership. Look, this isn't always our favorite option but it's may be better than selling your home all together. This give you time to recover and if the market continue to appreciate, you still take advantage of an appreciating asset. The risk here lies in managing tenants without any prior experience. Reach out to schedule a property management consultation and see if this option is right for you.

Option 4: Moving to an Affordable Area

• Downsizing

  Consider moving to a smaller, more affordable property within Colorado's Front Range or explore properties with lower home values.

• Moving to an Affordable Area

  If Denver's cost of living remains a challenge, consider relocating to a neighboring state with lower living expenses or no state income tax, such as Wyoming and New Mexico.

  Here's a list of states without income tax as of 2021:

  1. Alaska
  2. Florida
  3. Nevada
  4. South Dakota
  5. Texas
  6. Washington
  7. Wyoming
  8. Tennessee (Note: Tennessee taxes dividends and interest income but not earned income as of 2021)

Moving to another state? We can help you find a Realtor® anywhere in the world! We don't just pass you a list of names. We will connect with several options, speak with them directly and make sure to connect you with the best representation available and it costs you nothing! Reach out today and let's talk about your plans.

Option 5: Short Sale

Consider a short sale as a responsible alternative to foreclosure:

• Avoiding Foreclosure

  A short sale can help you avoid the severe consequences of foreclosure, especially amid ongoing economic uncertainty and mortgage rate increases.

• Lender Approval

  To proceed with a short sale, you'll need your lender's approval, which may be more attainable if you can demonstrate financial difficulties, including those arising from COVID-19 and subsequent mortgage rate increases. 

• Consultation with Experts

  Seek advice from real estate professionals and tax advisors regarding potential tax implications associated with forgiven debt in a short sale, particularly in the context of a post-COVID financial landscape.

   

Homeownership in Colorado's Front Range and Metro Denver presents unique challenges. Assistance is available without judgment. Explore government programs, local resources, property management, selling, leasing, short sales, downsizing, or relocating for valuable assistance during tough times. If you're considering any of these options, reach out to schedule a consultation with our experienced real estate professionals. Proactive steps can safeguard your home and financial stability, ensuring you weather life's challenges, including COVID-19's ongoing impacts and mortgage rate increases. Our aim is to guide you toward financial security with the tools and resources needed for a brighter future.