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Mortgage Loans

Why Talk With a Mortgage Lender Before You’re Ready to Buy

If you don’t have immediate plans to buy a house, you might think that it’s too soon to speak with a mortgage lender. But getting a jumpstart on the borrowing process can steer you in the right direction and help prevent surprises down the road. Some people don’t fully understand what it takes to get a home loan, and they assume that they’ll qualify for a mortgage with no problem.

The mortgage process, however, can be incredibly complex, hence the importance of a consultation with one of our loan experts. Here are four reasons to speak with us before buying a home.

Know what you can afford

Even though it might be too early to get a conditional mortgage approval, a consultation is how you’ll know whether a mortgage is even an option at this time.

We’ll take a cursory look at your paycheck stubs, W-2s, and tax returns. From here, we can assess whether your current income is enough to support a mortgage payment, and if so, we can estimate how much you’re likely to afford.

An early consultation is also important if you are a self-employed borrower and write off business expenses on your tax returns. Sometimes, these write-offs lower your net income too much and significantly reduce your borrowing power. The good news is that we might be able to add a percentage of these expenses back to your income.

Learn ways to increase your borrowing power

We’ll also take a look at your credit report and evaluate your debt, which also has a major impact on how much you can borrow. We can offer suggestions on what liabilities to pay off before you actually apply for a mortgage.

Paying off student loans, credit cards, and installment loans can improve your monthly cash flow, which might help you qualify for a bigger mortgage. We can also provide tips on how to improve your credit, such as paying bills on time and disputing errors on your credit report. This not only helps you qualify for a mortgage, it can also help you secure a better interest rate.

Receive down payment information

Down payments can be a major obstacle to homeownership, so the earlier you understand the down payment requirements for a mortgage, the better. Unless you’ve got a specific home selected, we can’t determine the exact amount you’ll need for

closing. However, if you disclose how much you’ve saved for a home purchase, we can provide a solid estimate of how much you can borrow.

Know your mortgage options early

Speaking with a mortgage lender also provides an opportunity to learn about different home loans. We can also clear up any misconceptions you might have about certain programs. For example, maybe you think an FHA loan is harder to qualify for, or that a USDA loan is only for farmers; therefore, you might never consider these programs. But after speaking with a Cherry Creek Mortgage loan expert, you may come to the realization that you’re eligible for more than a conventional loan.

The earlier you start thinking about the mortgage process, the easier it might be to qualify for a home loan and buy a house. Contact one of our loan specialists today to learn about your mortgage options. We can help you achieve your goals with the right mortgage.