Imagine you are at the starting line of a marathon. You’re contemplating whether your training was enough, what you ate the night before, and what you will do if things go south. You’re anticipating the reward at the end – the accomplishment of having persevered through unwelcoming territory both mentally and physically. While this narrative is about the sport of running, it could also describe the home buying process in Colorado, especially for a first time homebuyer. You need to be prepared, patient, and ready for roadblocks. But before you take off from the starting line, there’s a lot of prep work to do.
Examine why you want to buy and not rent
Maybe you think there is an opportunity to earn a return – Over time this may be true in our market as home values have been steadily rising, but unless you are very handy, or have the money to hire a contractor to renovate your home – this should be far down on your list of reasons to buy and not rent.
Perhaps you want to buy because rents are just as expensive as a mortgage. Rent Jungle reports for February 2017 show that 1 bedroom apartments in Denver rent for $1,367 a month on average and two-bedroom apartment rents average $1,748. Your mortgage could be comparable. Especially because with a first mortgage loan from RMLEFCU doesn’t ever carry mortgage insurance.
“Pride of ownership” remains one of the top reasons to buy. This one really resonates with buyers who believe buying is the best way to make an investment in their own future and the future they envision for themselves.
If all else fails, you can always leave it up to science and math with this really useful test for renting or buying.
Once you’ve decided to buy – get your affairs in order.
First, check your credit report – Make sure there is nothing surprising. Remember: don’t close old accounts and for Pete’s sake, refrain from making other large purchases if you are hoping to bid and secure a house soon.
Next, prepare copies of everything you will need to apply for a loan. At a minimum you will need:
- W-2s or federal tax returns for the past two years;
- Most recent pay stub for proof of income;
- Most recent statements for any loans or outstanding debt;
- Statements for bank accounts and other assets for the past three months;
Find out what you can afford by meeting with RMLEFCU’s loan department
The loan application process at Rocky Mountain Law Enforcement Federal Credit Union is easy, quick and attentive from start to finish. We offer competitively low, fixed rates with no PMI (mortgage insurance) to take you from renter to homeowner with a variety of repayment terms to suit your individualized situation. Our loan advisors are local, experienced and can provide fast approvals and loan letters during the bidding process.
Three reasons to use RMLEFCU for your First Mortgage:
- No Mortgage Insurance (PMI) – Mortgage brokers and banks require you to have mortgage insurance if your down payment isn’t high enough. We trust our members so we don’t require PMI!
- Lower Origination Fees – We keep your initial down payment lower.
- Low Fixed Rates – Your payment will stay the same for 30 years. No surprises as interest rates climb.
A word of advice: Aim for a mortgage payment that is no more than between 25-29% of your pre-tax income.
- Find a realtor in Colorado
Many people look to their immediate social network, i.e. friends and family, when selecting a realtor. But rather than worry about whether your co-worker’s wife will be upset that you went with a different real estate agent, worry more about what an agent should be doing for you.
Here’s a few tips for finding a realtor that matches your expectations.
Once you narrow it down to a few contenders, prepare questions to ask. The most important clue is how responsive they are to you. In a market that depends on 24/7 availability, a realtor needs to prioritize your phone call or email.
- Take a deep breath as a first time homebuyer.
Prepare for stress by remembering to be patient, aggressive, and motivated. Get ready to chip away at a wish list of things you want in a home and focus on your needs.
- Do your research for the area where you want to live.
Are there young people nearby, or will you be surrounded by retirees? Is there new development going in that will impact your experience living there? How much of a commute are you willing to deal with? How are the schools? Even if you don’t have kids, consider how the quality of schools may have an impact when you decide to sell.
- Find a trusted home inspector.
Usually your realtor will have someone they work with. If you decide to branch out, keep these tips in mind.
- Don’t come to the table with baggage. The less stipulations you have as a buyer, the better.
Consider RMLEFCU your running coach in the marathon that is home buying. We have a local lending team that is experienced and familiar with the needs and wants of law enforcement officers and their loved ones. Put us to work for you and we’ll work hard to show that you’ve made a wise choice.