Financing


How much home can you buy?

A first step in purchasing a home is finding a lender and getting pre-qualified or pre-approved. It is important that you know how much home you can afford before you start looking. How much you can borrow depends upon your personal income and expenses, your credit history, and the interest rate that you can get. Interest rates vary with the market, but also vary depending on how much you are going to put down on your purchase, and your credit scores. Click here for an easy way to calculate how much you can borrow.

Getting Pre-Qualified or Pre-Approved

Before you can make an offer on property, you will need to get a letter from a lender stating that you are pre-qualified for a loan. You can get a Pre-Qualification letter after a phone call with the lender if you provide certain financial information to the lender. If you fill out a complete loan application and the lender checks your credit and finds it acceptable, you can get Pre-Approved. If you are pre-approved you can close on your purchase sooner, and when you submit an offer to a Seller – being pre-approved makes your offer a little stronger.

How much money do you need?

Most people make a sizable down-payment when they purchase a home, at least 3% of the purchase price of the home. There are other costs, however, involved in buying a home. There are fees that a lender will charge to make the loan; there is often a one percent origination fee, a document preparation fee, underwriting fee, a charge for a credit report, for an appraisal, and more. There will be the cost of having an inspector review the home for you so that you are sure that there are no major problems with the structure or equipment in the home. You will have to pay for homeowner’s insurance in advance, and deposit some amount for future insurance and taxes. Generally we refer to all of the costs that are not part of the purchase price as closing costs.

Loan Application

Your lender will likely require the following information to complete your loan application:

  • Social Security Number
  • Gross income amount, including secondary income sources, if applicable
  • Asset information, including the value of your banking, investment, and other accounts
  • Current expenses, including housing, credit card and loan payments, child support, and other obligations
  • Previous address if you’ve been in your current residence for less than two years
  • Name and address of your employer, and of your previous employer if you’ve been at your current job for less than two years

First Time Buyers

If you are a first time home buyer, you should ask lenders what special loans they offer for first time home buyers. One program for first time home buyers is offered by the Colorado Housing and Finance Authority, where you may even qualify for down payment assistance. For information about this program, visit the Colorado Housing and Finance Authority. There are many down payment assistance programs out there. Please contact us for additional information and referrals.

Finding a lender

We will be happy to recommend lenders to you. Please contact us for lender referrals.