Get Your Mortgage Questions Answered Today!

Getting a mortgage can be a complex and daunting task. There are a wide range of mortgages to choose from and an even greater range of guidelines to follow. The Colorado Mortgage Team was founded in 2011 with the mission to empower individuals with the information they need to thrive financially through real estate. We engineer a 5-star mortgage experience through first class service, expert execution and by educating individuals along their unique homeownership journey and beyond.

    The Home Buying Process

Pre-Qualification vs. Pre-Approval

The first step in obtaining a loan is to determine how much money you can borrow.  In case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.

Click here to Pre-Qualify.

You should elect to get Pre-Approved for a loan which requires verification of your income, credit, assets and liabilities.  We highly recommended that you get Pre-Approved before you start looking for your new house so that you: 

- Know what your purchasing power is and what that translates to in a monthly payment and cash out of pocket.
- Look for properties within your price range.
- Are in a better position when negotiating with the seller (seller knows your loan is already Pre- Approved).
- Have the option to close your loan quicker

With us this is a 3-step process:

1. Completing a Loan Application
2. Providing income and asset documents
3. Having your credit pulled and reviewed

       Download our Pre-Approval Checklist

More on Pre-Qualification

     LTV and Debt-to-Income Ratios
     FICO™ Credit Score
     Self Employed Borrower
     Source of down payment

LTV and Debt-to-Income Ratios
LTV or Loan-To-Value ratio is the maximum amount of exposure that a lender is willing to accept in financing your purchase. Lenders are usually prepared to lend a higher percentage of the value, even up to 100%, to creditworthy borrowers. Another consideration in approving the maximum amount of loan for a particular borrower is the ratio of monthly debt payments (such as auto and personal loans) to income. Rule of thumb states that your monthly mortgage payments should not exceed 1/3 of your gross monthly income. Therefore, borrowers with a high debt-to-income (DTI) ratio need to pay a higher interest rates in order to qualify for a lower LTV ratio.

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FICO™ Credit Score
FICO™ Credit Scores are widely used by almost all types of lenders in their credit decision. It is a quantified measure of creditworthiness of an individual, which is derived from mathematical models developed by Fair Isaac and Company in San Rafael, California. FICO™ scores reflect credit risk of the individual in comparison with that of general population. It is based on a number of factors including past payment history, total amount of borrowing, length of credit history, search for new credit, and type of credit established. When you begin shopping around for a new credit card or a loan, every time a lender runs your credit report it adversely effects your credit score. It is, therefore, advisable that you authorize the lender/broker to run your credit report only after you have chosen to apply for a loan through them.

Check out the Credit Decoded section of our YouTube Channel to learn some tips and tricks to optimize your credit profile.

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Self Employed Borrowers
Self employed individuals often find that there are greater hurdles to borrowing for them than an employed person. For many conventional lenders the problem with lending to the self employed person is documenting an applicant's income. Applicants with jobs can provide lenders with pay stubs, and lenders can verify the information through their employer. In the absence of such verifiable employment records, lenders rely on income tax returns, which they typically require for 2 years.

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Source of Down Payment
Lenders expect borrowers to come up with sufficient cash for the down payment and other fees payable by the borrower at the time of funding the loan. Generally, down payment requirements are made with funds the borrowers have saved. If a borrower does not have the required down payment they may receive “gift funds” from an acceptable donor with a signed letter stating that the gifted funds do not have to be paid back.

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Once you are Pre-Approved, we will schedule a custom mortgage analysis with you. This is a visual presentation we walk through with you, showcasing all your loan options side by side in easy-to-understand charts, graphs and breakdowns. We explain all your options and make sure to answer all of your questions so that you know exactly what is available to you.

Select The Right Loan Program:

Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each.  Whether you are buying a home or refinancing, there are 2 basic types of home loans. Each has different reasons you'd choose them.

1) Fixed Rate Mortgage

Fixed rate mortgages usually have terms lasting 15 or 30 years. Throughout those years, the interest rate and monthly payments remain the same.  You would select this type of loan when you:

  • - Plan to live in home more than 7 years
  • - Like the stability of a fixed principal/interest payment
  • - Don't want to run the risk of future monthly payment increases
  • - Think your income and spending will stay the same

2) Adjustable Rate Mortgage

Adjustable Rate Mortgages (often called ARMs) typically last for 15 or 30 years, just like fixed rate mortgages. But during those years, the interest rate on the loan may go up or down. Monthly payments increase or decrease.  You would select this type of loan when you:

  • - Plan to stay in your home less than 5 years
  • - Don't mind having your monthly payment periodically change (up or down)
  • - Comfortable with the risk of possible payment increases in future
  • - Think your income will probably increase in the future

By carefully considering the above factors and seeking our professional advice, you should be able to select the one loan that matches your present condition as well as your future financial goals.

Next you want to find the right agent for you. This can be a tricky process and you don’t want to just use the first one you run into or that distant family member. Having the right agent in your corner can make all the difference so do your homework. Remember experience is important but so is personality. You want to choose the person not the resume. Here are some helpful questions to ask prospective agents.

  • How long have you been selling real estate?
  • What is your average number of clients?
  • Ask them to tell you about their last buyer and how it went?
  • What areas do you cover?
  • Are you part of a team?
  • Ask for 3 references to contact

Chemistry is key in this relationship. Listen for passion, conviction and honesty. You are looking for someone who has your best interests at heart not theirs. You want someone who is compassionate and has strong core values. Trust your instincts but do your homework. Search them online, read reviews and test their responsiveness with text and email follow ups.

We have a great list of solid professionals we work with. If you want a few names to start your search out with all you have to do is ask.

Once you have engaged a real estate agent it is time to start looking at properties. Finding a home with a real estate agent involves a carefully orchestrated process that blends market expertise, client preferences, and effective negotiation skills. Here's a quick overview of the journey: 

1. Initial Consultation: - The process begins with an in-depth consultation between the real estate agent and the homebuyer. This discussion helps the agent understand the buyer's needs, preferences, budget, and any specific criteria for the desired property.  

2. Property Search: - Using the client's criteria, the real estate agent conducts a comprehensive search to identify suitable properties. This includes considering factors such as location, size, amenities, and budget constraints. 

3. Property Tours: - The agent schedules property tours for the buyer to view potential homes. During these tours, the agent provides insights into the local market, neighborhood features, and the pros and cons of each property. 

 4. Market Analysis and Pricing: - Once the buyer identifies a property of interest, the agent conducts a market analysis to determine the fair market value of the home. This analysis considers recent sales, current listings, and other market trends to guide the negotiation strategy.  

As your lender we plug in specific numbers for the property into your mortgage analysis to review. This way you know exactly what your monthly payment and cash out of pocket will be when you make your offer.

5. Making an Offer: - If the buyer decides to make an offer, the real estate agent prepares the necessary documents, including the purchase offer. This document outlines the proposed purchase price, terms, and any conditions or contingencies. 

6. Negotiation: - The agent presents the offer to the seller's agent, initiating the negotiation process. Negotiations may involve discussions on price, closing dates, contingencies, and potential repairs or improvements. 

7. Counteroffers: - It's common for sellers to respond with counteroffers. The agent facilitates this communication, relaying counteroffers between the buyer and seller until both parties reach a mutually agreeable deal. 

8. Acceptance and Escrow: - Once both parties agree to the terms, the offer is accepted, and the property enters the escrow period. During this time, various tasks, such as inspections, appraisals, and the buyer's due diligence, are conducted. 

9. Contingency Period: - Depending on the terms of the agreement, there may be a contingency period during which the buyer can opt out of the deal without significant financial consequences. This period allows for inspections, financing approval, and other necessary assessments. 

10. Closing the Deal: - With all contingencies met and approvals obtained, the transaction moves toward closing. The real estate agent works closely with the buyer, seller, and respective legal representatives to ensure a smooth transition.  

11. Final Walk-Through: - Before closing, the buyer typically conducts a final walk-through to ensure the property is in the agreed-upon condition. Any issues discovered during this process are addressed before the deal is finalized. 

12. Closing Day: - On closing day, the buyer and seller, along with their respective agents, gather to complete the transaction. The buyer signs the necessary documents, funds are transferred, and ownership of the property is officially transferred. The process of finding a home and making and negotiating offers involves a delicate balance of market knowledge, negotiation skills, and effective communication. A skilled real estate agent serves as a guide and advocate for the buyer, ensuring a successful and satisfying home buying experience.

Once you have an accepted contract a copy your fully executed contract will be sent over to your lender.  

Next you are going to want to engage and hire a home inspector. Completing a Home Inspection is a crucial step in the process of buying a home. Once you are under contract, the inspection provides a detailed examination of the property's condition, helping you make informed decisions about the purchase. Here's an overview of the process:

1. Scheduling the Inspection: Once the purchase offer is accepted, typically with a provision for a home inspection, you'll work with your real estate agent to schedule the inspection.

2. Choosing a Qualified Home Inspector: Research and select a reputable home inspector. You may ask for recommendations from your real estate agent, lender or seek reviews from past clients.

  • Ensure the inspector is licensed and has a thorough understanding of local building codes and regulations.

3. Inspection Day: On the scheduled day, meet with the inspector at the property. It's a good idea to be present during the inspection to get a firsthand understanding of any issues identified.

4. Thorough Examination: The home inspector will conduct a comprehensive examination of the property, including its structural components, electrical systems, plumbing, HVAC (heating, ventilation, and air conditioning) systems, roofing, and more.

  • They will assess the general condition of the property and identify any areas that may need repairs or further evaluation.

5. Detailed Report: Following the inspection, the home inspector will provide a detailed report outlining their findings. This report typically includes photographs and a description of any issues discovered.

6. Negotiation: Armed with the inspection report, you, as the buyer, can negotiate with the seller regarding necessary repairs or request a credit to cover the costs.

  • Your real estate agent will play a key role in facilitating communication between you and the seller during this negotiation phase.

7. Further Evaluation: Depending on the findings, you may choose to bring in specialists for further evaluation. For instance, if the inspector notes issues with the HVAC system, you might hire an HVAC technician for a more in-depth assessment.

8. Final Walkthrough: Before closing on the property, you may conduct a final walkthrough to ensure that any agreed-upon repairs have been completed to your satisfaction.

9. Closing: Once the inspection-related negotiations are resolved, and you are satisfied with the property's condition, you move forward with the closing process.

It may be tempting to skip the Home Inspection to save money since it is not a requirement to obtain a mortgage loan however the Home Inspection process is a critical step in the home buying journey. It provides you with a comprehensive understanding of the property's condition, empowering you to make informed decisions and ensuring that the home you're purchasing aligns with your expectations.

Once your contract has been received we will prep your file and submit the loan to processing immediately. Your processor will scrub your file and send you an updated list of documents and information needed to prep it for underwriting to review.

The processor will also order your appraisal.  The property is appraised to determine market value as it compares to the contract purchase price.

The processor will order your title work.

You will be asked to shop for homeowners insurance and let us know the company you choose to go with.  We have several quality options we can provide if you would like a referral.

Here are a few tips to improve your chances of getting a loan approval:

  1. - Fill out your loan application completely. You may use our online forms to expedite the process.
  2. - Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
  3. - Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please contact us to prepare a gift letter for you.
  4. - Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse affect on your current application.
  5. - Do not go out of town around your loan's closing date. If you plan to be out of town let us know and you may need to sign a Power of Attorney.

Once you have provided processing with your updated documents they will prepare and submit your file to underwriting. Once reviewed the underwriter will come back with a list of additional items needed called conditions and the processor will send that list along to you. Upon providing those items back to processing they will submit once again for a final underwriting of your loan.

Once underwriting has received all your conditions back and has signed off on them your file is marked clear to close. You are now able to schedule your closing time and location. Your file is moved into the closing department and documents are prepared for the closing table.

You made it! You will come to the title companies’ office to sign your final paperwork. The signing normally takes place in front of a notary public and you should plan for about an hour to complete this process. You will need to bring a cashiers check for the down payment and closing costs if required. Personal checks are normally not accepted.

One of us will be at your closing to ensure a smooth process and answer any questions that come up. 

Afterwards you should get the keys to your new home and will be able to move in!

Seeing you at the closing table is just the beginning of our lifelong partnership. We have your back long after closing with Househappy, a concierge service for your homes repair & maintenance needs. Monthly updates on your home’s value & an interactive mortgage dashboard with Homebot. Hand written monthly mailers. Weekly emails with tips, tricks & hacks. Annual calls & loan review to keep you in the ideal product & rate.

 Homeownership doesn't end at the closing table, it's just beginning & we are your local partner, a trusted advisor & resource that is always just a call, email or text away.

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