28 Jun Six Tips to Prepare for a Home Loan
If you’ve made the decision to purchase a home in Colorado Springs, unless you are awash in cash — which most people are not — you will need to obtain a home mortgage loan. There are some important tips and tactics that you need to bear in mind when it comes to preparing to apply for a home mortgage loan in Colorado Springs.
Strengthen Your Credit
If you are like most people, your credit score isn’t all that it should be or can be. One of the first steps you need to take when you make the decision to purchase a home is to strengthen your credit score. Your credit score and obtaining a home mortgage loan is a matter of basic math. The lower your credit score, the more of a challenge you will have getting a home mortgage loan at a favorable rate of interest. You should shoot for your credit score to be somewhere in the mid-700s.
If you’re credit score is not up to par, obtain complete credit reports from all three major credit reporting agencies. Go through each of the reports to ensure that there are no errors in them. If you find errors in your credit reports, seek to have them corrected promptly. A significant percentage of people who checked their credit reports found errors in them. In addition, once these errors were corrected, credit scores improved.
Recognize What You Can Afford
Once you have your credit score in order, you will be in a pretty solid position to understand the terms of a home mortgage loan for which you are likely to quality. You will be able to estimate with accuracy your monthly mortgage payment based on the cost of the residence you purchase.
Because you will be armed with information to get a relatively clear picture of what buying a home of a certain price will cost you, take the time to really put a pen to paper and make sure you can afford the residence. Specifically, you will be in a positon to determine whether you will be able to comfortable afford the monthly mortgage loan payment associated with a particular home.
Build Your Savings
If you plan to purchase a home, begin putting money into savings. In this day and age, you will likely be required to place about 10 percent of the cost of the home down. If you elect to purchase a $300,000 residence, you will need to come up with a down payment of about $30,000. There can be some variation in the down payment necessary to purchase a home. Much of this is the result of your credit history and credit score. The better these factors, the more flexibility that may exist regarding a down payment.
Take time to check out different home mortgage lenders in Colorado Springs. Although the differences from one lender to another are not likely to be significant, you may be more comfortable or have a better feel for one lender over another.
When looking for a solid home mortgage lender, don’t forget financial institutions that you currently do business with, or have done business with in the past. You may be able to get some sort of cost-relate concession associated with a home mortgage loan because you’ve done business with the financial institution in the past.
A very important step to take before you actually get into the market looking for a home is to obtain preapproval for a home mortgage loan. The way this works is that a lender gives you an OK to obtain financing for the purpose of buying a home up to a specific dollar amount.
Home sellers like prospective buyers who are preapproved. A seller understands that when a buyer is preapproved there will not be any delays associated with obtaining loan approval. Preapproval is akin to approaching a seller with a cash offer for a home.
Find a Real Estate Professional
Finally, an important step to take in getting into the real estate market is to engage the assistance of an experienced, skilled real estate professional in Colorado Springs. A qualified and committed real estate professional will work to ensure that you find the type of home that means your needs and goals. A real estate professional will also assist a client in maneuvering the Colorado Springs real estate market efficiently and effectively.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for , where you can get personal checks and business checks.