Buying A Home - Purchase Loans
Begin by assessing your finances and getting pre-approved for a mortgage, as this clarifies your budget and strengthens your offers in Colorado's competitive market. Next, connect with a local real estate agent to start your home search. Check out our step-by-step guide to buying a home in Colorado.
Down payments can range from 0% (for VA or USDA loans if eligible) to 20% or more, depending on the loan type and your financial situation. Many common loan programs allow for much lower down payments, such as 3-5%, while 20% can help avoid Private Mortgage Insurance (PMI). There is down payment assistance available as well. For more in depth information about this topic, check out our blog post How much down payment do you really need to buy a home in Colorado?
Minimum credit score requirements vary by loan type, generally starting around 580 for FHA loans and 620-640 for Conventional, VA, and USDA loans. A higher credit score typically leads to more favorable interest rates and better loan terms. Here is an in-depth article about credit scores when you're buying a home: What Credit Score Do I Really Need to Buy a House in Colorado?
Mortgage pre-approval is a conditional commitment from a lender stating how much you can borrow, based on a review of your finances. In Colorado's competitive market, it's crucial as it shows sellers you're a serious, qualified buyer and helps you make a strong offer quickly. Check out our blog post "Mortgage Pre-Approval in Colorado: Your Key To Home Ownership" for more information on this question.
From making an offer to closing, the mortgage process itself typically takes 30-45 days, though finding the right home in Colorado's market can add several weeks or even months. The overall timeline depends on market conditions and your preparedness. Check out our blog post on this topic, How Long Does It Typically Take To Buy a House in Colorado?
Yes, programs like CHFA offer down payment assistance and special loan options for first-time and low-to-moderate income buyers. For more information, check out our First-Time Home Buyer Loans page.
No. Many buyers put down far less. Conventional loans can start at 3%, and FHA requires 3.5%. There is also down payment assistance available.
Closing costs are fees associated with finalizing your mortgage loan and home purchase, typically ranging from 2% to 5% of the loan amount. These cover items like appraisal fees, title insurance, and loan origination fees common in Colorado.
You’ll need to provide income, asset, and credit information to a lender. We can walk you through the process in about 10 minutes.
Yes. We have programs designed for self-employed buyers, including bank statement loans that don’t require tax returns.
Pre-qualification is a quick estimate. Pre-approval means a lender has verified your income, credit, and assets.
Colorado’s market is active, competitive, and varies by location. Reach out for the latest local updates.
We offer FHA, VA, conventional, jumbo, and specialty loan options tailored to your financial situation. Visit our loan options page to see all that we offer.
Yes. As long as your debt-to-income ratio is within limits, student loans don’t automatically disqualify you.
Yes, Colorado offers various down payment and closing cost assistance programs, often through the Colorado Housing and Finance Authority (CHFA) or local municipal programs. These can significantly reduce your upfront costs and make homeownership more accessible.
Refinancing Your Home
People refinance to achieve various financial goals, such as lowering their interest rate, reducing monthly payments, or consolidating high-interest debt. It can also be used to shorten your loan term or switch from an adjustable-rate to a fixed-rate mortgage.
Common refinance types include Rate-and-Term refinances, which change your interest rate or loan term, and Cash-Out refinances, which allow you to convert home equity into liquid funds. There are also specific government-backed options like FHA Streamline and VA IRRRLs for existing FHA or VA loan holders.
The best time to refinance is often when interest rates are significantly lower than your current rate, or when you've gained substantial equity you wish to utilize. It also depends on your personal financial goals and how long you plan to stay in the home.
Minimum credit score requirements for refinancing generally range from 620 to 660 for most conventional loans, though some government-backed streamlines may have more lenient requirements. A higher score typically results in better interest rates and more favorable terms.
Yes, a cash-out refinance allows you to tap into your home's equity, converting it into a lump sum of cash at closing, which can be used for home improvements, debt consolidation, or other financial needs. Eligibility depends on your equity, credit, and debt-to-income ratio.
Refinance closing costs typically range from 2% to 5% of the loan amount, covering fees like appraisals, title insurance, and loan origination charges. In Colorado, some lenders may offer "no-cost" refinances where these fees are rolled into a slightly higher interest rate.
A mortgage refinance in Colorado typically takes between 30 to 45 days from application to closing, similar to a purchase loan. The exact timeline can vary based on the lender, loan type, and how quickly documentation is provided.
Understanding Home Loan Programs
Common types include Conventional, FHA, VA, and USDA loans, each offering different eligibility requirements and benefits. Specialized options like Jumbo loans, Bank Statement loans, and Manufactured Home loans cater to unique financial situations or property types in Colorado. Explore different types of home loans here
Conventional loans are typically for borrowers with good credit and require varying down payments; FHA loans are government-insured, offering lower down payments and more flexible credit; VA loans are for eligible veterans, often with no down payment and no mortgage insurance. Each has specific rules for properties in Colorado.
Yes, for eligible veterans, VA loans are one of the few options that typically require no down payment for home purchases in Colorado. They also do not require private mortgage insurance (PMI), making them a highly attractive benefit.
FHA loans are government-insured mortgages requiring a lower minimum down payment (as little as 3.5%) and more flexible credit score criteria, often starting around 580. The property must also meet specific FHA guidelines, applicable in Colorado and nationwide.
Bank statement loans are designed for self-employed individuals who may have extensive tax write-offs, using 12 to 24 months of personal or business bank statements to qualify for a mortgage. This provides an alternative income verification method for entrepreneurs in Colorado.
It can sometimes be more challenging due to specific requirements, primarily whether the home is permanently affixed to land and titled as real property. If it is, financing options are similar to traditional loans; otherwise, it's considered personal property with different lending rules.
Yes, USDA loans are a zero-down payment option for eligible low-to-moderate income borrowers purchasing homes in designated rural areas of Colorado. These government-backed loans have specific income and property location restrictions.
The Mortgage Process & General Qualification
You'll typically need recent pay stubs, W-2s, bank statements, and tax returns for the past two years, along with identification. Self-employed borrowers or those with unique income streams may require additional specific business financial documents.
Your DTI ratio compares your total monthly debt payments to your gross monthly income, with lenders generally looking for it to be below 43-50% for most loan programs. A lower DTI indicates you have more disposable income to comfortably cover your mortgage payments.
The required income level depends on the loan amount, your existing debts, and current interest rates, as lenders primarily assess your debt-to-income ratio. There isn't a single minimum income; rather, it's about having sufficient stable income to comfortably afford the mortgage payment and other monthly obligations.
PMI is an insurance policy protecting the lender if you default on your conventional loan, typically required if your down payment is less than 20% of the home's purchase price. It can often be cancelled once you build 20% equity in your Colorado home.
During closing, all final loan documents are signed, funds are exchanged, and ownership of the property officially transfers to you. It's the critical last step where all legal and financial aspects of your home purchase or refinance are finalized.
A fixed-rate mortgage has an interest rate that remains the same for the entire loan term, providing predictable monthly payments. An adjustable-rate mortgage (ARM) has an interest rate that can change periodically after an initial fixed period, meaning your payments could fluctuate.
Yes, securing a mortgage as a self-employed individual in Colorado is possible, though it may require different income documentation than W-2 employees. Lenders typically review two years of tax returns or utilize specialized programs like bank statement loans. Learn more about self-employed loan options here
An escrow account is typically set up by your lender to hold funds for property taxes and homeowner's insurance, paid along with your monthly mortgage payment. While often required for loans with less than 20% down, it helps manage these recurring property-related expenses.
A mortgage appraisal is an independent assessment of a property's value, conducted by a licensed appraiser, to ensure it's worth the loan amount. Lenders require it to protect their investment and ensure you're not paying more than the home's market value.
To improve your approval chances, focus on maintaining a good credit score, reducing your debt-to-income ratio, and ensuring stable employment history. Having sufficient savings for a down payment and reserves also strengthens your application.
Discount points are an upfront fee paid to your lender, usually 1% of the loan amount per point, in exchange for a lower mortgage interest rate. Paying them can save you money over the long term if you plan to keep your mortgage for many years, but it's a financial decision based on your individual situation and how long you intend to stay in the home.
Title insurance protects both you and your lender from potential financial losses due to issues with the property's title, such as undisclosed liens or ownership claims that predate your purchase. It's a one-time fee paid at closing that ensures you have clear and legal ownership of your Colorado property.
