As you begin your journey toward buying a home in Colorado Springs, it’s important to understand the financial side of the home-buying process. Here are a few tips to guide you in the right direction:
Pre-Qualification vs. Pre-Approval
Getting pre-qualified for a mortgage will give you a conditional estimate of how much you’ll likely be able to afford based on a surface-level assessment of your financial situation. But getting pre-approved means your lender has verified your credit and income to provide a pre-approval letter stating how much you’re eligible to borrow. Getting pre-qualified for a mortgage is a great preliminary step, but getting preapproved is essential to being competitive in Colorado Springs’ fast-paced market.
To be preapproved for a mortgage, you’ll need good credit as well as recent bank and retirement statements, pay stubs, W-2 forms and tax returns. “Even if you aren’t quite in a position to buy today because of credit, income, down payment or anything else, your lender can help you with a plan to get you qualified,” explains Hannah Wheeler, senior vice president of FirstBank Colorado Springs.
“Most local lenders understand the market here in Colorado Springs and can help you tackle the buying process with quick approvals,” Wheeler says. Additionally, local lenders tend to offer better rates, and they’ll be able to sit down with you personally to help you decide on the type of mortgage that best fits your unique situation.
Start the Conversation Early
Once you’re serious about starting your home search, it’s time to meet with a lender to discuss your options. “It’s great if you can find a local lender that can sit down with you to go over your personal situation and make sure that you are well qualified before you start looking for a home,” Wheeler advises. If you wait until you’ve found your dream home to start the pre-approval process, you’ll miss your opportunity to make an offer.