Yes! Getting in when you financially can is always the recommended route. There are many financial benefits to owning a home. As a first-time home buyer in Colorado, it's important to know that you can always refinance as soon as the rates come down. We recommend talking to one of our experinced lenders about this and seeing what refinancing would look like for you in the future.

A general rule of thumb in the mortgage lending world is you can afford a home if your total debt — including your monthly mortgage payment — makes up 43% or less of your before-tax income. In lender language, this is known as your debt-to-income (DTI) ratio. For example, if you earn $5,000 per month, then your total monthly debt, including your new house payment, shouldn’t exceed $2,150 per month ($5,000 x 43% = $2,150).

This question is especially important if you need a mortgage.. A higher credit score often leads to a smoother loan approval, and a much lower interest rate and monthly payment. Conventional lenders typically require a minimum 620 score, but they’ll likely reward you with a lower rate if your score is 740 or higher.

So what happens when you send in that mortgage payment every month? It’s nice to think the whole amount just reduces your principal, but your monthly payment actually goes toward a lot more.

Here’s what the typical monthly mortgage payment includes:

*Principal

*Interest

*Homeowners insurance

*Property taxes

*Private mortgage insurance (PMI), if you put down less than 20% on your home

If you want to pay more on your mortgage, be sure to specify that you want any extra money to go toward the principal only, not an advance payment that prepays interest.

Mortgage points, or discount points, are a way to prepay interest to get a lower interest rate on your mortgage.

Each mortgage point equals 1% of your home’s value. That means if you’re getting a $250,000 loan and have two discount points, you’ll pay $5,000. In most cases, a point can reduce your interest rate by one-eighth to one-quarter of a percent.

In most cases our team of experts can get sellers to pay to reduce your percentage.

Because mortgage interest rates can change day to day, locking your rate is an important part of the mortgage process. Locking your interest rate guarantees a certain interest rate for a specific period of time.

Mortgage interest rates go up and down and there’s no way to time it perfectly. You simply don’t know what the future holds. No one does. So don’t spend time trying to time the market; instead, rely on your lender’s expertise. If they say it’s a good time to lock down your rate, trust them.

With so many mortgage options out there, it can be hard to know how each would impact you in the long run. Here are the most common mortgage loan types:

*Federal Housing Administration (FHA) Loan

*Department of Veterans Affairs (VA) Loan

*Fixed-Rate Conventional Loan

*United States Department of Agriculture (USDA)

Our lending partners will discuss each type of mortgage loan with you to determine the best one for you.

A quick conversation with your lender about your income, assets and down payment is all it takes to get prequalified. But if you want to get preapproved, your lender will need to verify your financial information and submit your loan for preliminary underwriting. A preapproval takes a little more time and documentation, but it also carries a lot more weight.

Which is better? Think of prequalification as an initial step and preapproval as the green light signaling that you’re ready to start your home search. 

The idea of meeting with a lender can be intimidating. This is the biggest purchase you’ll ever make!

Think of your first meeting with a lender as a get to know you session. 

Once your loan process gets started, be prepared to provide proof of:

*Your income

*Any debt you have

*Your assets

*How much you plan to put down on your home

Our lending partners will clearly explain your mortgage options and answer all your questions so you feel confident in your decision.

You’ll need enough money to cover your down payment and closing costs. However, our team works with every down payment assistance program available to you. Standard loan program minimum down payments range from 0% to 3.5%. Closing costs typically run between 2% and 6% of your loan amount. They often include one-time lender and title fees related to getting approved for a mortgage.