Today’s mortgages are not “one-size-fits-all.” The current real estate market seems scary at first. However, you have many options in Colorado to help you find a home that fits your budget. Once you’ve found a home you love, the next step is to submit your mortgage loan application. Before you submit your final documents, do your homework to ensure the success of your application in obtaining a mortgage in Northern Colorado.
Evaluate your affordability
Do you truly know how much mortgage you can afford? Lenders and mortgage insurers look at a variety of factors. Your monthly mortgage allowance and total debt-to-income ratio are most important.
But wait, let’s hit pause and ask this question instead: How much are you actually comfortable spending on a mortgage payment each month? Your answer to this question is a much better way to determine your affordability.
Talk to several lenders at different-sized banks. Rates and fees are typically competitive between lenders, so it’s more important to focus on other factors, including the level of service provided and how well they’ve executed transactions for other buyers.
The type of mortgage you seek may also impact your choice of lender. Different banks offer different programs, especially in today’s market. Some are more familiar with specific mortgage programs than others. Buyers could save over $200 a month on their mortgage payments just by finding a lender with a loan program that works for them.
Discuss your loan options
Obtaining a mortgage in Northern Colorado depends entirely on your specific situation. Your financial profile, personal background, family goals, career trajectory, and future plans all factor into your loan options. These variables should all be discussed when interviewing lenders.
Let me give you an example. Suppose your down payment needs to be bigger to qualify for a conventional loan. In that case, a Federal Housing Association (FHA) mortgage can be an excellent option. Alternatively, you may qualify for a first-time home buyer program offered by a local jurisdiction in Northern Colorado.
Mortgage programs are constantly changing. Consult your trusted real estate agent to help you understand your financial options. I’ve worked with buyers from a wide range of economic backgrounds. I can help you find a way to finance your home purchase.
Plan to complete a loan application with more than one lender. Take it one step further, and get pre-approved. By doing this, you will know what loan amounts various lenders will approve for you.
Remember, stick to your monthly budget no matter what you get approved for. However, this pre-approval amount does give you the go-ahead to look at homes in a certain price range. Your pre-approval signifies to sellers that you are a committed buyer who has secured financing. This process is an important step that will put you in a better negotiating position with sellers.
Commit to a lender
When you place an offer, you must adhere to the terms dictated in your contract. Your contract almost always includes a clause dictating that you commit to a lender and meet specific deadlines.
You will likely be charged a fee because this is when the lender starts incurring expenses on your behalf. Show your lender that you are serious about working in partnership with them by submitting all the required documentation as quickly as possible.
At this point, they will also be approving your home to determine if they will lend you money. You want the appraisal to come in at or above the sales price.
The process of buying a home can be challenging! As you can see, there are several important steps you’ll need to take to get a mortgage. I can help you navigate these muddy waters. Having an agent you can rely on is essential. Contact me at your convenience so we can get you started with the process of buying your dream home!
I'm Lauren Haug! I'm a teacher-turned-real estate agent, and I teach people how to build wealth through real estate in Northern Colorado.
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