Colorado Mortgage and Refinance Rates

How to find the best mortgage rate in Colorado for you

When shopping for a mortgage, compare at least three loan offers — research shows this exercise can save you thousands of dollars over the life of a loan.

Bankrate can help you find the best mortgage deal. Here are some basic steps to securing a loan with favorable terms:

Step 1: Strengthen your credit score

Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your standing if needed. This means pulling your credit score and credit reports. You’re entitled to a free credit report from each of the three main reporting bureaus (Experian, Equifax and TransUnion), which you can get through AnnualCreditReport.com.

Step 2: Determine your budget

To find the right mortgage, you’ll need a good handle on how much house you can afford. That’s because a lender could qualify you for more mortgage than you need, or one that would max out your budget and leave no room for unexpected expenses.

Step 3: Know your mortgage options

There are a few different types of mortgages. Many lenders offer conventional loans that require as little as 3 percent down. FHA loans also have a low down payment threshold, while VA loans (for veterans) and USDA loans (for borrowers in rural areas) have no down payment requirement.

Step 4: Compare rates and terms from several lenders

Don’t settle on the first lender you talk to — rate-shop with at least three different banks or mortgage companies. You can look to your bank or other banks, credit unions, online lenders and local independents to ensure you’re getting the best deal on rates, fees and terms.

Step 5: Get preapproved for a mortgage

As you comparison-shop, keep in mind that getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Mortgage options in Colorado

Known for its outdoor activities and diverse economy, Colorado has experienced strong growth in home prices. If you’re looking to get a mortgage in Colorado, there are several options:

• Colorado conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no more than 45 percent. If you make a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) premiums, as well.
• Colorado FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a down payment of at least 3.5 percent, you could qualify for this type of loan with a credit score as low as 580.
• Colorado VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage backed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which starts at 2.15 percent for homebuyers.

First-time homebuyer programs in Colorado

The Colorado Housing and Financing Authority (CHFA) offers loans and down payment and/or closing cost assistance for qualifying first-time homebuyers. Here’s an overview:

• CHFA Home Purchase Loans: These loans are available through partnering lenders and offer affordable rates, low (or no) mortgage insurance, closing cost support and free homebuyer education classes. To qualify, buyers must have an income that falls within CHFA guidelines, a mid-credit score minimum of 620, attend an approved homebuyer education course and contribute at least $1,000 toward the home’s purchase.
• CHFA Down Payment Assistance: This down payment grant can cover up to 3 percent of the amount of a 30-year CHFA mortgage. (The money can also be used to cover closing costs.) The grant does not have to be repaid.

Colorado mortgage resources

• Colorado first-time homebuyer resources
• Colorado loan limits by county
• Colorado mortgage lenders