Unless you’re new to the Denver area, you’re probably well aware that the real estate scene here is incredibly competitive. If you’re looking to purchase your first home in the Mile High City, here are a few tips to help make your dreams of homeownership a reality:

1.     Have a healthy credit score:
A credit score isn’t everything when it comes to mortgage approval, but it’s important to keep in mind that the stronger your score, the better your rate and terms. Why? Higher scores indicate you’ve handled debt well in the past, and you’ll probably continue to do so. Lower scores demonstrate you’ve made poor financial choices in the past, and you may have trouble repaying a loan. If your credit needs improvement, work on it before you buy a home.

2.     You may qualify for buyer programs that could make a down payment cheap or even free.
The largest upfront cost will be your mortgage down payment and closing costs. First things first, is a 20% down payment necessary? Not anymore.

·       FHA loans require 3.5% down, and a 3% down payment is even an option with Fannie Mae HomeReady and Freddie Mac Home Possible loans. If that is too much of an upfront cost for you, ask about programs that can get you into a home for even less money down. Qualified buyers may be looking at $1,000 or less in down payment requirements.

·       Colorado Housing and Finance Authority (CHFA) loans can get you into a home for as little as $1,000 down if you meet CHFA guidelines for income, credit score, and debt-to-income (DTI) ratio. If you do qualify, you may even receive help with closing costs.

3.     Get pre-approved, not just pre-qualified
Mortgage pre-approval makes a huge difference in the buying process. During pre-approval, you’ll have your finances reviewed by a loan officer, and you can obtain a pre-approval letter telling you how much of a loan you qualify for. Depending on your lender, that letter may be good for up to 90 days, and it can be used when you are shopping for homes. Most sellers feel more confident about creating a contract when a buyer has a pre-approval letter. They can really help the home buyer stand out amongst the competition.

Becoming a homeowner in Denver is much less daunting if you know what to expect. If buying a home is in your future, contact Metrowest today – we’d love to help you start the process!