By the day that first-time home buyers come to us for a Denver home loan or Colorado mortgage, most have already been on their Denver CO real estate searches for quite awhile. Some people get caught up in fantasy thinking, putting the cart (the house) before the horse (the money). Only an approved Colorado home loan can deliver you to a new home in Denver, Colorado or the surrounding Rocky Mountain communities.
These nine steps taken in order are a recipe for success. Mix them up too much and you will probably bump into setbacks and frustrations.
- Figure out how much you can afford,
- Know your rights,
- Shop for a loan,
- Learn about home-buying programs,
- Shop for a home,
- Make an offer,
- Get a home inspection,
- Shop for homeowner’s insurance, and
- Sign papers. Notice that “Shop for a home” is number 5 on the list.
Companies such as Paragon Loans offer customers assistance with several of these steps. We can help you weigh the benefits of owning a home, encourage zero credit-card debt, help repair credit, find options for too-so-perfect credit, determine what you will qualify for, find a monthly payment that is comfortable and affordable, review types of available loans in the marketplace, and steer you toward down-payment assistance programs, if necessary.
Is your timing right? Maybe you are renting now and have a serious credit-card or student-loan debt load. Your relatives are telling you to invest in real estate and to stop paying someone else’s mortgage. However, it is expensive to carry that debt load and your greatest investment right now may be to put all of your extra money into becoming debt free.
Afterwards, you want to put away money into a short-term savings vehicle so that you will be able to come to the bargaining table with resources. With more money available for a down payment, more options will be available. For example, according to SmartMoney.com, Fannie Mae allows borrowers who can put down 5 percent to qualify with a smaller salary than if they only put 3 percent down. Other lenders have programs to wrap mortgage insurance and closing costs into loans if a sufficient down payment is put up.
Did you know that there is a difference between how much you qualify for and how much you can afford? Buyers need to be realistic about their lifestyles and needs. If you do not want to forego family vacations, ski passes, nice clothes, and electronic gadgets, then please do yourself a favor and leave enough monthly discretionary income to cover these “necessities.”
Getting approved ahead of time will give you quite a bit of bargaining power when you shop. First of all, pre-approval causes you only to look at properties that fit your budget and will save you time and money in the long run. Secondly, you can move quickly to make an offer on “your” home when you find it. Any other interested parties may not have that type of on-the-spot leverage.
Of course, it is essential to have the home inspected before signing the papers so you are not surprised with major problems and expenses after moving in. And, after you find the right home and the right price, you can purchase the homeowners insurance to fit that exact property. Signing the papers will be a celebration—if you’ve gone about all this the right way.
Posted by:
Editor
Categories:
Tips For Home Buyers
