How to Get a Mortgage in Colorado

Getting a home mortgage in Colorado doesn't have to be a mountain of difficulty. In fact, it may be one of the easiest states to buy a home, and get a friendly mortgage loan. For example, Colorado does not require you to retain an attorney during the home buying process. Follow these steps to getting a Colorado home mortgage loan:

Instructions

Difficulty: Moderate

1. Obtain your current credit report. Your score will have an affect on the type of loan and the interest rate that you can get. Colorado law allows citizens one free credit report per year, via the credit report companies.
2. Speak to credit unions, banks, mortgage brokers (individuals and agencies that arrange financing from a variety of lenders) and online mortgage lenders so that you can find the right type of loan to meet your specific situation.
3. Realize that in Colorado, mortgage brokers are required to be licensed, but have no experience or education requirements. Ask for proof of their license.
4. Try to avoid Adjustable Rate Mortgages. These move some of the interest rate risk away from the lender and onto you. Basically, if interest rates rise, so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly. If there is a huge spike in interest rates, you could lose thousands.
5. Colorado has the Consumer Equity Protection Act which protects consumers from unfair and predatory lenders (lenders that intentionally coerce consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit). The act allows for fines and punishment of predatory lenders.
6. Investigate the different Colorado and federal homeownership programs for disabled, senior citizens, veterans, low-income buyers, single parents, first-time buyers and rural home buyers, such as: Single Family Mortgage Bond Program, Down Payment Assistance Program, and the First Time Homeownership Program
7. Get pre-approved for a home loan with your preferred lending institution. This allows you to react quickly when you find the home that you want.
8. Contact a real estate agent. Look for someone that has longevity in the business and knows the area well.
9. When you find the right home, fill out a loan application at the institutions that pre-approved you.
10. Bring all the requested documentation and select the mortgage that's right for you.
11. Close on the home and pay all the applicable fees.

Tips & Warnings

• Look around for the lowest interest rates. Just one quarter of a percent can mean thousands of savings over a thirty year mortgage.
• Get your home professionally inspected, and discover problems before the deal is secured.
• Do not be pressured into buying a specific home, the real estate agent may have another agenda.
• Before you sign anything, make sure that you thoroughly understand all the terms of the mortgage contract.
• Never pay a lender to apply for a loan. No legitimate lenders will ask you to pay them to see if they will give you money for a home.
• Record low interest rates of the recent past have led to an explosion of unethical lending and loan scams. You may wish to have an attorney review any documents before you sign them.
• Be sure that the title of the home is clear of liens before you purchase it.
• Before you sign any documents, read them carefully and understand all the terms. It may take some extra time but refer them to an attorney if you wish. A little caution can save a lot of money and trouble later.