Selecting a Mortgage Lender in Grand Junction: A Guide in 6 Steps
Exploring mortgage lenders is an important part in the journey of buying a home.
(Unless you’re well-off and plan to buy your home for cash…)
The choice of your lending partner, the loan type you opt for, and the specific terms of the loan will significantly have impact on how much your monthly mortgage
How do you go about making the correct decision?
In this guide, we’ll help you pick a mortgage lender in Grand Junction. By the end, you’ll have everything you need to pick the correct lender and select the best loan for yourself.
Let’s get started!
1. Review Your “Stats”
According to Fidelity, the approval of your mortgage loan depends on five factors:
- Credit Score
- Debt-To-Income Ratio
- Down Payment
- Work History
- Value/Condition of Home
All these factors will influence your qualification for a loan, determining both the amount and type of loan you can secure.
For best results, your credit score should be 620 or higher, your debt-to-income ratio should be significantly lower than 28% (before the mortgage payment), your down payment should (preferably) be around 20% of the price of the home, your work history should be respectable, the condition of the home should be excellent.
That would be the best-case scenario, at least.
However, obtaining a loan is still possible with lower “stats” — various budgets, lenders, and types of loans provide extra flexibility. Ask your lender about the available options.
2. Set Your Budget
How much you can afford to spend on a property will be determined by just three factors:
- Your monthly mortgage payment affordability.
- The extent of your affordable down payment.
- The type of loan you are getting.
It’s helpful to reverse-engineer the calculations privately before approaching a mortgage lender. Consider how much you wish to allocate monthly, what number would you be comfortable with (regardless of what the lender says you should be comfortable with)?, and assess the feasible down payment you can manage.
Present these numbers to your mortgage lender, and they should be ready to assist you in identifying a loan type and duration that suits your unique circumstances.
3. Understand Home Loan Types
We’ve reiterated multiple times that there are different loan options tailored to various needs and budgets.
But what are the different types?
Here are five primary ones, outlined by Bankrate.
- Conventional — This is a traditional home loan for your primary residence.
- Adjustable-Rate — This type of loan allows for very low interest rates early on.
- Fixed-Rate — These loans offer predictable and consistent monthly payments.
- Government-Insured — FHA, VA, and USDA are loan types that are insured by the government and more accessible for certain types of buyers.
- Jumbo — These mortgages are for borrowers who need to take out more money than the federal limit for a standard mortgage.
If you opt for an experienced mortgage lender, you can engage in discussions about these different loan types, and they will assist you in making a well-informed decision.
But proceeding with that…
4. Explore Different Lenders
We live in a society where the consumer has a lot of power — you have the ability to meet, assess, and ultimately select the mortgage lender you wish to collaborate with.
And you should most absolutely exercise that right!
Lenders differ with regard to interest rates, support, and available lending options.
So, we suggest meeting with a minimum of three distinct mortgage lenders before reaching a decision. Pose the following questions:
- What loan options are available for my particular situation?
- What is your recommended budget for a home purchase?
- Could you elaborate on the terms of your loans?
- What is the required down payment for the loan?
The more questions you ask, the more insight you’ll gain into the operations of the mortgage lender.
5. Get Pre Approved
Before you seal the deal with a mortgage lender, they will propose to preapprove you—essentially providing an estimate of the loan amount, interest rate, and anticipated mortgage payment, contingent on successful verification.
You can undergo this process with several mortgage lenders before choosing whom to work with.
6. Pose Lots of Questions
Finally, ask lots of questions.
The greater the number of questions you ask, the more you’ll understand the lender and their approach. If a lender avoids answering your questions, consider it a red flag, and we advise seeking other ways for financing a home.
Final Thoughts
Prior to buying a home, it is essential to find a mortgage lender.
And before identifying a mortgage lender, you need to know what you’re looking for.
We’ve given the details to start your search for a mortgage lender who can assist you in securing funds for your upcoming home. This involves assessing your “stats,” establishing your budget privately, familiarizing yourself with various loan types, exploring different lenders, obtaining pre-approval, and posing numerous questions.
Hope this proves helpful!
And if you want to sell your home as-is, feel free to call us. We can make you a fair cash offer in 48 hours, close in as little as two weeks, and we’ll even pay all closing costs!