Mortgage Tips for Colorado First-Time Homebuyers

Updated: Mar 4

We know that the mortgage process can be quite daunting, but that’s why we’re here. At Security First Financial, we’ve helped thousands of satisfied customers with the home loan process since we opened our doors back in 2009.

A happy young couple holding the keys to their first home

The following tips will answer some of your homebuying questions as well as help you better understand the Colorado home loan process.

Check Your Credit

First and foremost, you’ve got to have a good idea of what your credit score is and if there are any ways to improve your score before you apply for a home loan. Your credit is one of, if not the biggest factor in determining the type of loan you qualify for and will also help determine your interest rate.

Credit Basics - 10 Thing You Should Know

Stop Credit Activity

Now is not a good time to apply for more credit cards, take out any other kind of loans such as a car loan, or make any major purchases using credit. Simply use your credit cards as you normally would so you don’t create any red flags for your loan originator.

Assets and Liabilities

Another important part of the loan process is knowing how your money is flowing in and out of your bank account. Your mortgage lender will want to see how much money and how often money is going in and out of your account, so be ready to provide that information.

Stay Organized

You’ll be asked for a lot of paperwork during the loan process to verify your income, employment, assets, and debts. Being organized and ready with these documents will make the process much quicker and a lot less stressful.

Documents You Need for a Mortgage

Explore Down Payment Options

There’s a myth that’s been floating around for decades that you need a 20% down payment to buy a house. That’s simply not the case, especially for first-time homebuyers.

There are a lot of popular first-time homebuyer loan programs that require less than a 20% down payment:

FHA Loans

With features like homeownership workshops and available down payment assistance*, FHA loans are perfect for first-time homebuyers and buyers looking for a smaller down payment.

  • Down payment as little as 3.5%

  • Credit score as low as 500-580

VA Loans

VA loans offer flexible, sustainable terms for military personnel, veterans, and military families. These loans offer competitive rates with an easy pre-qualification process.

  • No down payment required**

  • Credit score as low as 580

Rural Housing (USDA) Loans

Designed for homebuyers wishing to purchase a home outside of densely populated areas.

  • No down payment required**

  • Credit score as low as 620

Conventional Loans

As one of the most popular mortgages, the conventional loan has a wide variety of options to fit your specific needs.

  • Down payment as little as 3% for first-time homebuyers

  • Credit Score as low as 620

Colorado also has multiple Down Payment Assistance Programs* that can assist you with your down payment and closing costs.

Watch the video about Colorado down payment assistance below that features our very own Division President and Mortgage Loan Originator, Nick Barta:

Research Mortgage Lenders

We would love it if you decide to work with us, but we also understand that there are other mortgage companies that offer different options. Ask your friends, family, and colleagues for their recommendations, and do your own research online.

Get Prequalified

Applying for a home loan online is actually quite simple, and usually only takes about 15-30 minutes. Check out one of our Short Applications as an example.

Once you’ve applied online, you’ll be able to talk with a loan originator about your mortgage options and they’ll also be able to recommend the types of loans that will best fit your needs.

Since getting pre-qualified is only determined by the information you provide, the loan amount being offered isn’t guaranteed (only an amount you might be approved for by the lender) and doesn’t hold the same weight as being pre-approved when searching for homes. Getting pre-approved is the next step which involves a more thorough look into your financial background and credit rating.

We hope you found this guide helpful! Please feel free to contact us if you have further questions regarding the home loan process.

Opinions expressed are solely my own and do not express the views of my employer.

*First lien interest rates may be higher when using a DPA second.

**Closing costs and fees may still apply.

The content in this marketing advertisement has not been approved, reviewed, sponsored, or endorsed by any department or government agency.

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