For most homebuyers, acquiring a home loan through a reputable mortgage lender is a large part of the home purchase adventure. Let’s get you prepared to start off with a lender on the right foot by looking at how to avoid getting turned down for a mortgage in Colorado.
Check Your Credit History
Every single hopeful buyer needs to start any home search by ordering their annual free credit report from the major credit rating agencies.
The reason you want to do this is to get a clear picture of where you stand with any outstanding debts while also checking for any inaccuracies that could act as a roadblock with a lender. In the event that you do discover any inaccuracies, you absolutely want to pursue disputing them with the corresponding credit rating agency. Disputing these errors can take some time and the ratings agency may request documentation in order to resolve the inaccuracy.
It’s in your best interest to work with the agency to get the inaccuracy taken care of quickly, thus allowing you to move on with your home search. Shoring up your credit score is one of the biggest things you can do to avoid getting turned down for a mortgage.
Prepare Your Finances
With your credit history sorted out, it’s time to make a full accounting of your current debts in the form of a monthly budget.
Try your best to figure out how you are going to save as much money as possible while also paying down those outstanding debts. The most important part of this step is to be realistic with your budget and don’t stretch your finances too thin in case of an unexpected expense or emergency.
After you have run the numbers, you will have a more accurate idea of how much house you can afford combined with a reasonable timeline to accomplish buying your new home. It’s not essential to eliminate any and all debt before buying a home, but minimizing your debts as much as possible can only help you out with the mortgage lenders.
Shop for a Lender
Not all mortgage lenders were created equal, and it’s up to you to find the lender that works best for you.
A good place to start is by looking at a lender’s advertised interest rates and then reading some reviews about them as well. Since choosing your lender effectively means going into business with them for likely over a decade, take your time to dig through the numbers and get a good overall perspective of the lending landscape available to you.
If you happen to have any questions, contact the lender to find out the answer prior to signing any paperwork with them. Once you’re satisfied with your lender choice, fill out their application to see where things may go from there.
Be Cooperative and Honest
After your application has been submitted, you’re likely to be contacted by a representative from the lender.
This rep may request specific pieces of documentation to verify your employment, income, or credit history. Your lender will grab some documentation they can without your involvement but sometimes your effort and cooperation will be needed. Be sure to return any requested documentation promptly and be honest with any questions the lender rep may have relating to your credit history or outstanding debts.
Trying to cover up any financial issues could land you in hot water with your lender and may get you turned down for a mortgage, so it’s best to get things out in the open if they are broached.
Keep in Contact
As your home acquisition continues you should be hearing from your lender rep on a regular basis.
Do feel free to contact them with any additional questions or concerns or even just to check in and see if they need anything else from you.
In the event that you do have questions or concerns, be undemanding but assertive in pursuit of a resolution.
Get Help and Avoid Getting Turned Down for a Mortgage in Colorado
If you’re looking to buy a home and are worried about getting turned down for a mortgage, let our team of experienced Colorado agents help by contacting us today at (720) 932-4401!