Complete This Checklist Before Buying a Denver Home
When you’ve made the decision to buy a Denver home, it’s tempting to start attending open houses as soon as possible. However, buying property is often lengthy and complicated, and there is a ton of planning and preparation that must go into the process. Before you start the process of buying a Denver home, make sure you’ve completed the items on this checklist so you know you’re fully prepared.
Be Financially Prepared
Buying a Denver home is an emotional process and you may be ready in that respect, but before you shop around for homes, you need to be completely sure that your finances are in a good position to buy. Take a good look at your income versus all of your estimated expenses to be sure that you will not be stretching yourself too thin by buying.
Be Familiar With Your Credit Score
The interest rate and size of your monthly mortgage payments are directly related to your credit score. If you’ve had too many problems or late payments leading up to the purchase of a home, your score could be lower, and you might get a higher mortgage rate. Most lenders require a credit score of at least 620 for buyers to be approved for a mortgage. If you need to improve your credit score, start well in advance of when you plan to purchase your home because the process takes months.
Gather a Down Payment
The majority of mortgage lenders require down payments of anywhere from 5 to 20 percent of the home’s price. If you don’t have that kind of cash laying around, now is the time to start saving. Put off any big-ticket purchases, vacations or any unnecessary expenses until you have enough saved for a down payment.
Do Your Homework
When it comes to buying a Denver home, the most important thing you can do is fully educate yourself about the process. Take advantage of local home-buying seminars that explain all the aspects of a home loan, such as the criteria lenders use to evaluate you as a borrower. These courses also discuss the documentation you will need to provide to your lender and what each portion of your mortgage payment covers. Often, such seminars are offered by banks and nonprofit organizations and are totally free.
Shop Around for a Mortgage
In the same way you shouldn’t settle for the first agent you come across, you shouldn’t commit to the first mortgage you are offered. Mortgages are not one-size-fits-all; find a lender you deem trustworthy and discuss your options at length with them. Your lender should help you to understand what options are available to you.
Estimate Closing Costs
Between putting together the down payment and monthly mortgage fees, buyers often forget that they are also responsible for closing costs. Closing costs are usually three to six percent of the purchase price due to taxes, transfer fees and other expenses. It’s important that you remember to budget for closing costs so that you are prepared.
The decision to buy a home is not one that you arrive at lightly, and you want to be sure that you are completely ready to do so. Before you start looking, assess your finances and credit score and spend some time saving for a down payment and closing costs. Work with the right agent and lender to find, and purchase, your dream home.