A gorgeous state jam-packed with natural beauty and environmental diversity, Colorado is an excellent place to buy a home. If you’re thinking about making the leap from renting to owning your space, learn more with our easy home buying guide.
Step 1: Consider Current Colorado Mortgage Rates.
When you take out a mortgage loan, you’ll agree to pay your lender a certain percentage of interest in exchange for servicing your home purchase. Your interest rate might stay the same throughout the term of your loan (if you have a fixed-rate loan) or it might change throughout the term (if you have an adjustable-rate loan). No matter which type of loan you choose, you can save thousands of dollars on your home purchase by locking into your loan when rates are low.
Mortgage interest rates change over time. Your local housing market, average bond interest rates and the state of the U.S. economy as a whole can all play a role in how rates are moving.
Take a look at the chart below to learn a little more about what you might expect to pay for your mortgage loan if you took it out today. We update this table regularly to ensure that you have the most up-to-date information available.
|7/1 ARM (adjustable rate)
|5/1 ARM (adjustable rate)
Step 2: Pick a Mortgage Lender in Colorado.
The best mortgage loan and lender for you will vary depending on your needs. Explore a few of our favorite lenders in Colorado below if you aren’t sure where to begin.
1. Best Overall: Quicken Loans®
If you’re looking for the simplest mortgage process possible, be sure to consider getting your preapproval from Quicken Loans. Quicken Loans is one of the top mortgage lenders in the United States, and the company is often considered to be one of the best lenders for first-time buyers thanks to its simple application.
Quicken Loans’ preapproval application is intuitive and straightforward — you can even complete it on a phone or tablet. Most buyers will also get a decision instantly, which means less time waiting for a response.
No matter what type of loan you need, chances are very high that Quicken Loans can accommodate you. From government-backed FHA loans to $2 million jumbo loans, Quicken Loans has a custom mortgage product for everyone.
2. Best for Veterans: Veterans United
A VA loan is a unique type of government-backed mortgage loan that can allow veterans and active members of the military to buy a home with 0% down. Veterans United is the country’s most prominent VA lender — and has been consistently top-rated for the past 4 years.
Veterans United has taken many steps to simplify the VA loan application process. Its team is made up of former servicemen and women who can provide you with personal guidance and advice when it comes to getting your proof of service.
Don’t qualify for a VA loan at this time? Veterans United can also help you apply for a conventional mortgage.
3. Best for In-Person Service: Wells Fargo
Though online mortgages are convenient, knowing that you can walk into a physical branch if you run into problems can make the application process much less stressful. Wells Fargo is the largest bank in Colorado with 144 offices in 57 cities. Wells Fargo also has special qualification standards for self-employed men and women, which can make it easier to apply for a loan if you don’t have a set salary.
Wells Fargo offers a comprehensive range of loan types, including government-backed loans and conventional mortgages. You can complete your application online or you can visit your local Wells Fargo to fill out a preapproval application. You can even start your application online and finish it at a local branch if you run into trouble.
Step 3: Find a House.
After you’ve been preapproved for a mortgage loan, you can begin shopping for houses and comparing properties on the market. Many buyers hire a real estate agent or realtor at this point to help them narrow down their search, but you should also start thinking about what you need in your future home. Some factors you might want to consider include:
- Location: Is there a particular neighborhood you want to live in? Do you need to be within walking distance of public transportation? How much money can you allocate each year to property taxes?
- Spatial needs: How many bedrooms and bathrooms do you need in your home? Do you need a large backyard for pets or children? Are you looking to scale up from your current space? Or are you ready to downsize?
- Condition: Are you looking for a home that’s in pristine condition? Or are you prepared to budget for repairs and renovations? Do you have the DIY skills required to repair minor problems — or will you need to schedule services from repair professionals for every issue?
Your preapproval letter will tell you how much money you’re approved for in a mortgage loan. This provides you with an excellent starting point when it comes to budget. Remember to consider your homeowners insurance, closing costs and anything you must pay in escrow when you think about how much money you can afford to spend buying a home.
Step 4: Make an Offer.
When you find a home that you’re ready to make a commitment to, you’ll propose a sale to the seller with an offer letter. An offer letter is an official document that tells the seller that you’re serious about buying the home, how much money you’re offering and how they can get in contact with you.
Most buyers let their agent write their offer letter on their behalf. If you don’t have an agent, you can still submit a legally binding offer letter yourself. If you decide to write your own letter, be sure to include the following information:
- The address of the home you want to buy
- Your full name and the name of anyone else who will be on the title
- The amount of money you’re offering for the home
- Any concessions you expect from the seller (for example, you might ask for assistance covering closing costs)
- Items you’d like to be included in the sale (window treatments, appliances, etc.)
- Contingencies, or conditions that must be met on the sale before it can go through
- A copy of your mortgage preapproval letter (to prove that you can finance the purchase)
- The amount of your earnest money deposit
- The date you expect to close on your loan
- The date you want to move into the home
- A deadline that the seller must respond to your offer by
After you submit your offer letter, wait for a response from the seller. Your seller might respond in 1 of 3 ways:
- Accept the offer. If the seller accepts your offer, your job is done. You can now move onto closing.
- Reject the offer. If the seller rejects the offer, you can submit a new offer or you can explore other offerings.
- Make a counteroffer. If the seller offers you a counteroffer, it means that he or she is proposing a new set of sale terms. Read through the offer before you proceed. If the new terms are agreeable to you, you can accept the counteroffer and move to close. If they aren’t, you can reject it or you can make another counteroffer.
Step 5: Prepare for Closing.
After you reach a set of agreeable terms with the home’s seller, it’s time to close on your mortgage loan. Most mortgage closings involve 3 steps:
- Appraisal: A home value expert will assign an official estimate of value to your property. Appraisals ensure that your lender isn’t giving you more money than your home is worth.
- Inspection: An inspector will visit your property and provide you with a list of everything that needs to be repaired or replaced. Though most mortgage applications don’t require an inspection to close, you should still get one to ensure that your home doesn’t have any hidden damage.
- Underwriting: While you’re receiving your appraisal and inspection, your lender will underwrite your loan. During underwriting, your lender will check your financial information and prepare your loan documents.
After these steps close, you’ll attend a closing meeting with your seller, agent and lender. Bring the following items to closing:
- A government-issued photo ID
- The Closing Disclosure your lender will send to you after underwriting closes
- Your agent’s contact information
- A cashier’s check or proof of electronic funds transfer for your closing costs and down payment
At closing, you’ll pay your down payment and closing costs and sign on your new loan. You’ll also receive the keys to your new home.
Move-In Day in Colorado
After you close on your loan, you’ll be responsible for managing your mortgage and keeping up with your payments. Know exactly when your loan payments are due and be sure that you’re setting aside enough money for insurance and property taxes. Though tackling a mortgage loan can seem intimidating, staying organized will set you on the track toward success.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.