If you’re a first-time homebuyer in Denver or the Front Range, understanding a mortgage can be one of the most challenging parts of the home-buying process. If you haven’t done so yet, check out our post “Mortgage Basics, Part 1” to learn about monthly payments, different types of loans, and standard forms you’ll need to complete.

When you’re up to speed, continue to this post to learn more about the mortgage process and deciding what you can afford. If you’re unsure, your real estate agent can help you figure out your budget and what you’re looking for before you start your home search or apply for a mortgage. In the busy Denver area, trust a real estate agent who knows the area. Contact Susan Thompson Real Estate today.

Figure Out Your Budget

Remember that your mortgage payment is made up of different parts like the principal, interest, taxes, insurance, and HOA. On top of that, you’ll also need to think about any maintenance costs, car payments, student loans, groceries, and other expenses that recur monthly. 

Figure out how much you can spend on a mortgage so you don’t find your dream home at an unreasonable price for you. Your real estate agent can also help you calculate what you can afford for a mortgage payment.

Find A Lender

Finding a good mortgage lender is just as important as finding a real estate agent who will be able to find you the home you’re looking for. Financing a mortgage is probably the biggest investment you’ll make in your life, so finding a mortgage lender who understands your needs, what you can afford, can find the best type of loan for you, and can help you figure out how much you’ll need for closing costs and other fees.

With such an important decision, it’s a good idea to look around and explore the different types of lenders available. Look into the following types of lenders and choose the best one for you:

  • Online Mortgage Broker: These online services don’t actually lend you money, but will work with different financial institutions to help you find the best deal.
  • Mortgage Broker: Much like an online broker, a mortgage broker is not affiliated with any one financial institution. They will work with different lenders to find you the best rates and loan types for your mortgage.
  • Financial Institution: This is either a bank, credit union, or other type of lending institution. Major and local banks alike offer mortgage lending options, so check with your bank or credit union to find out if you could receive preferred rates or discounts for already being a customer.
  • Non-Bank Mortgage Lender: If your financial institution doesn’t offer mortgage lending and you’ve decided against a mortgage broker, you may also be able to find lending options through businesses or private lenders who offer financing specifically for real estate.

If you’re struggling to find a mortgage lender, your real estate agent should have connections to help you secure financing. Ask them today if they have anyone that they would recommend.

Make Sure You’re Pre-Approved

Knowing how much you can spend and being approved for financing might yield two different results. It’s important to work with your lender to get pre-approved for a final amount that you can spend. 

Don’t forget, your mortgage includes the monthly payment, interest, fees, and other expenses, so ask your lender about potential programs that can help you reduce your initial costs or provide payment assistance as necessary. Also know that, just because you may get pre-approved for a higher amount, it doesn’t mean you should increase your spending limit.

Search For Your New Home

Once you’ve been pre-approved for your mortgage loan, it’s time to start looking for your new Denver home. At Susan Thompson Real Estate, we know the area like the back of our hand, so we can help you find the exact home, location, and price range that you’re looking for.

If you’re looking for a home other than the Denver area, no problem! We serve the entire front range to help homeowners sell their houses and help buyers find the home of their dreams. If you’re ready to get started, contact us today to set up an appointment.