Lenders look at three things when you apply for a mortgage:
- Your debt-to-income ratio
- Your down payment
- Your credit score
Getting pre-qualified by your lender is an important first step in starting to look for a home because a seller will look more favorably at an offer knowing you are financially able to purchase.
Are you a cash, conventional loan, FHA loan, VA loan or USDA loan Buyer?
Conventional loans typically require 20% down with a solid credit score and must be your primary residence to achieve the best interest rates and no PMI (Principal Mortgage Insurance).
FHA loans require a minimum of 3.5% down, decent credit and for the Seller to agree to certain terms and conditions for you, the Buyer, to receive this loan.
VA loans are for veterans, there are many details that need to be reviewed by a VA loan officer. Once these are accomplished a minimum of 3% down is required along with a stamp of approval from a licensed VA Loan Appraiser for the home you would like to purchase.
USDA loans are for designated rural areas of the State of Colorado, along with this, there are several financial and geographical criteria that a borrower must comply with in order to apply for this type of loan.
Your loan officer will explain to you how much money will be needed for the down payment on a home. You may need assistance developing a financial plan to help you save the necessary money for the down payment and closing costs.
It is important to have a good credit history by paying your bills on time, limiting your debt, and reducing the amount of credit cards you have and the responsible use of those cards. Our loan officers will review your credit report with you to make sure the record of past and current debt is accurate. The better your credit history, the better your credit score and the more mortgage options you will have.
Mortgage loans are subject to qualification, receipt of satisfactory appraisal, and verification of income, asset and debt information provided by the customer.