However, if you are planning on buying a house in Colorado, you may have noticed that qualifying for a mortgage is not always as simple as advertised. Whether you are a self-employed first-time buyer or want to start investing but have a poor credit score, you may feel like you are out of options when it comes to finding a reasonable home loan in Colorado.
Fortunately, Griffin Funding specializes in providing more flexible home loans in Colorado. With competitive interest rates, flexible underwriting terms, and a diverse selection of mortgage programs, we can help you find a home loan in Colorado that helps you make the dream of homeownership a reality.
Areas We Serve
Whether you plan to take advantage of the plentiful fresh mountain air or prefer lower elevations, we provide mortgages all across The Centennial State, including:
- Denver
- Colorado Springs
- Aurora
- Fort Collins
- Lakewood
- Thornton
- Arvada
- Westminster
- Pueblo
- Centennial
- Boulder
Once you decide which region best suits your lifestyle, you’ll need to find a mortgage that fits your housing budget.
How do Home Loans Work in Colorado?
The home loan process in Colorado is similar to applying for a mortgage in any other state. There are three general steps that are involved in the mortgage process:
Colorado Mortgage Application Process
- Step 1:
- Submit an application with a lender.
- Step 2:
- Provide documentation for verification that you meet the loan terms.
- Step 3:
- The lender approves the mortgage, releasing the funds, and you move forward with the home-buying process.
At Griffin Funding, we can complete this entire process in under 30 days to help you make sure that you don’t miss out on the home of your dreams.
How Do I Qualify for a Home Loan in Colorado?
Qualifying for a home loan in any state depends on several critical factors, including:
Colorado Loan Qualifications
- Your credit score: Many home loans require a credit score of 620 or higher. However, the better your credit score, the lower your interest rate will usually be.
- Your debt-to-income ratio: Generally, lenders want to see a DTI ratio of less than 43%.
- Proof of income: Typically, lenders require proof of income using W2s.
- The price of the home you want to buy: Higher priced homes are often associated with a higher mortgage cost, unless you are able to put down a significant sum with the down payment.
If one or more of these factors raises a red flag, that doesn’t mean you are out of luck.
What Are My Options for a Colorado Home Loan?
Griffin Funding offers several home loans for prospective buyers who are having trouble securing a traditional mortgage. Our mortgage programs for Colorado home buyers include:
Home Loan Options in Colorado
- DSCR Loans in Colorado: DSCR loans allow real estate investors and mortgage brokers to qualify for financing based on their debt service coverage ratio (DSCR) rather than through traditional means. By calculating the DSCR, lenders can measure a potential borrower’s operating income in relation to their mortgage debt, and thus determine whether they will be able to repay a loan.
- Asset-Based Loans in Colorado: When you take out an asset-based loan, you’re borrowing against the value of your assets. The more valuable your assets are, the more financing you can receive. This enables borrowers to tap into the equity of their assets and access financing.
- Bank Statement Loans in Colorado: If your W2s are not an accurate depiction of your income, a bank statement loan may be a better option for you. Bank statement loans rely on 12 or 24 months worth of bank statement records to verify your income. These mortgages are typically well suited for self-employed individuals.
- Home Equity Loans in Colorado: If you have equity built up in your loan that you would like to use for other things including home improvements, or debt consolidation, you may benefit from a Colorado home equity loan where you can get cash out for some of the equity of your home, without changing the rate you have on your initial home loan.
- FHA Loans for First-Time Home-Buyers: If you are a first-time buyer, you should consider an FHA loan. Since these loans are backed by the Federal Housing Administration, they are less restrictive and allow for down payments as low as 3.5%.
- VA Home Loans: This type of loan is available to current and veteran service members. Since this loan is guaranteed by the Department of Veterans Affairs, there is no down payment required. In addition to purchasing a new home, a VA home loan can also be used to build and improve a house or refinance your mortgage.
- USDA Loans: These loans are designed to help low-to-moderate-income buyers by providing them with the opportunity to purchase homes in eligible rural development areas with 0% down. A USDA home loan can be used for new or existing property that will be used as a permanent residence.
- ITIN Loans: Foreign nationals and non-US citizens can get an ITIN mortgage in Colorado to become homeowners without a Social Security number.
Whether you’re buying a new home or need to refinance your current mortgage, Griffin Funding is proud to offer competitive rates and diverse mortgage options that cater to our customers’ needs.
For more information about our home loans in Colorado, speak with one of our knowledgeable loan officers today!
Are There Programs for First-Time Home-Buyers in Colorado
In addition to an FHA loan, you may qualify for first-time-buyer assistance through the Colorado Housing & Finance Authority, They offer a first-time buyer program known as the CHFA FirstStep Program.
Does CHFA Pay Closing Costs?
As part of the program, CHFA will pay a portion of your down payment or closing costs in the amount of 3% of your first mortgage. And, no repayment is required.
How Do I Qualify for a First-Time Home-Buyer Program in Colorado?
While this program is available to first-time buyers in Colorado, there are restrictions that may exclude some prospective homeowners from participating in the program, including:
- 620 or higher credit score
- Income must be within limits
- Contribution of $1,000 toward the home
- Attend a homebuyer education class
And, you must meet the underwriting guidelines of the lender you’re working with. If you don’t qualify for the CHFA FirstStep Program, our loan officers can help you find the right mortgage for your circumstances.
Cost of Buying a Home in Colorado
The median selling price for homes in Colorado is approximately $373,200. Keep in mind that this is just a starting point for figuring out how much buying a home in Colorado should cost. In addition to the listed price of a home, you will also need to factor in:
- Closing costs
- Down payment
- Mortgage payment
- Homeowners Association (HOA) fees
- Maintenance and repairs
- Insurance
As you can see it’s not just the initial cost of buying a home in Colorado that should be on your radar, but the overall cost of homeownership. This is a crucial part of ensuring that you are budgeting correctly and ready to become a homeowner.
What Are the Current Mortgage Rates in Colorado?
The current mortgage rates in Colorado vary greatly between homeowners due to the many factors that are used to calculate them. And, you must also factor in that some loans are fixed-rate mortgages while others are adjustable-rate mortgages.
Griffin Funding strives to offer competitive mortgage rates so you can feel confident that you are getting a fair rate based on your personal circumstances.
How Much Is a Down Payment on a House in Colorado?
Since the down payment is a variable factor in the home-buying process, there isn’t a standard down payment for homes in Colorado. However, if we were to use the traditional 20% down payment and median home price of $373,200, the median down payment would be approximately $74,640.
It’s important to keep in mind that this is just an example, so do not let it deter you from your goal of becoming a homeowner. Your down payment will depend on a variety of factors, from the home you have your sights set on to the type of loan you qualify for.
If $74,640 sounds far over your budget, keep in mind that there are many loan programs that allow for lower down payments (like FHA and VA home loans).
Apply for a Home Loan in Colorado
Apply for a mortgage with Griffin Funding today to take the first step toward buying a house in Colorado.
We consider ourselves among the top Colorado mortgage lenders due to our customer-centric process and advanced technology. At Griffin Funding, we always strive to provide a positive experience that is simple and efficient.