Getting the best deal when you buy a house in Colorado has a lot to do with getting the loan. 

The preparation stage is all about finding a lender who'll do a great job, and getting the right loan set up.

(To see the first three articles in this series,click here, here, and here.)

Proper preparation means getting your finances ready.  This is not a step to skip, or skimp on.

I want to talk about this first from a real estate agent's perspective.  Some agents will not spend any time taking you to see homes for sale until you've been qualified (or pre-qualified) for a loan. Some agents will take you to see a few houses, but then will ask you to get the loan in order before seeing any more. Yet others will run you all over, looking at houses in whatever price range you feel good about, and only prod you to get the loan ready when you've found a house you love.

I prefer the second method.  I like to give you the chance to get to know me, and me you, and I'm willing to spend some time even though I know sometimes it won't work out.  I do a little pre-qualifying of my own, usually by asking you what monthly payment you're happy with, what do you pay now, etc. Then, I figure the price range based on current interest rates and we can talk about what features you're likely to find in the area you desire.

But then I want you to firm things up with a lender.  There's good reason for not getting too far into it without truly knowing what you'll qualify for.  If we're searching in too low a price range, you might get discouraged about what's out there and give up.  If we're searching in too high a price range, it'll be hard for you to downgrade mentally and emotionally, especially if you've fallen in love with a house. And it's great to know you're getting the best deal with your loan so you can shop confidently.

Plus, the kind of loan you qualify for may affect whether or not a house is a candidate, even if it's in your price range.  For example, if you're getting an FHA loan some homes don't meet FHA standards due to their condition, even if you are willing to do the work.  So, to save your time and heartache, please get qualified with a reputable lender as soon as possible.

Please, don't get online with one of those sites that garner multiple responses. Your credit report can get hit dozens of times and that can actually lower your score. A few inquiries are OK, so you can check around to get a few opinions.

Here's some places to look for a lender -

1. the bank where you keep your checking or savings accounts
2. the credit union where you work
3. ask a friend or relative who recently got a loan if they liked the lender
4. ask a trusted real estate agent (preferably one who isn't going to make any money from the referral)
5. a loan broker can submit your application to several sources and discuss the pros and cons of each one

Most loan officers have an online application form, or they'll take your initial information over the phone.  That's fine to get started, but the one you will want to work with will be one who wants to sit down and talk with you face to face about your loan options.  Even if it turns out you can't get a loan right now, there's a kind of lender who will still work with you - they'll help you fix your credit. (You can pay for that service, of course, but I know a lender who'll advise you how to do it without charging you.)

The loan officer should be able to give you some sense of what kind of loan you can get just from the initial information. But then, they'll need a lot of documentation to formalize your application.  It's normal for them to request documentation two or three times throughout the approval process. Don't stress about it, just respond as quick as you can and remember you're all on the same side.

Read part 5 in this series.

Read the first post in this series.

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