Learn about the process of purchasing a home in Colorado.

Whip Your Finances Into Shape: If you’re a first-time homebuyer, it’s best to start planning early. Your first order of business is to get your finances in order, so you have a higher chance of securing a home mortgage in Colorado. 

Work on Your Credit: Haven’t checked your credit report in a few years? It’s time to take a look. Pull your credit reports and scores to see precisely where you stand. Once you have access to your credit reports, look them over for potential errors or past-due accounts that have been sent to collections. These are liabilities that can create a substantial problem if you apply for a mortgage. If you see anything amiss, immediately contact the creditor to see what the issue is and if you can sort it out.

Set a Budget: When purchasing a home, setting a clear budget and sticking to it is critical. Just because a bank will give you money for a particular house doesn’t mean you can afford it. To start the process, take a good look at your monthly spending to see what you can afford. Keep in mind that you’ll be paying for taxes, principal, interest, and insurance. You should also factor in emergency savings and maintenance for repairs. 

Organize Your Assets: When you request pre-approval from lenders, they will check your bank statements from the last two months. Make any large deposits from other accounts into your checking and savings accounts before that two-month window. If you don’t, the lender will ask you to explain where any large deposits came from—in detail. For this reason, avoid racking up debt or opening new accounts right before seeking mortgage approval.

Choose a Mortgage Company: When you’re ready to begin searching for a home loan, it’s time to choose a mortgage company. Each lender has its own process for approval. 

Apply for Loan Pre-Approval: Buying a new home is exciting, and it’s sometimes impossible to avoid browsing new listings and driving through potential neighborhoods to fawn over the houses of your dreams. However, do yourself a favor and avoid falling in love with a home before getting loan approval. Having a mortgage approval in hand will help you estimate the monthly payment you can afford. 

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