There are a lot of variables in the home-buying process, which means the time it takes to find and buy your new home varies too. A typical Denver home search process may take one to three months, including the mortgage approval process, comparing and evaluating properties, making and negotiating an offer, doing inspections, and the closing process. The loan qualification process typically takes 30-45 days.
Perhaps one of the most intimidating aspects of buying a Denver home is the mortgage approval process. We’ll be here to help guide you through this, but there are many ways you can prepare early to make the process smoother:
- Start by making sure your budget is under control—make a list of all your monthly expenses, compare it with your income, and see if adjustments need to be made.
- You should also try to pay off small credit card balances, but don't close the accounts as they will count toward your available credit, which is a good thing.
- Start gathering documents you may need, such as W-2 forms, income tax returns for the past two years, recent pay stubs, records of child support or alimony, bank statements for the past several months, and your credit report.
- Look over your credit report for any errors and start working on getting those corrected.
- Also, be sure you have funds for the earnest money deposit when you make an offer, as well as down payment, and closing costs. Sometimes you can get the seller to pay part of the closing costs.
- We can recommend Denver lenders we have worked with successfully in the past that we know are professional, honest, and will do what they say they will.
A general guideline to consider is that most buyers purchase a home that costs about one and a half to two and half times their current annual income. For example, someone earning $50,000 a year might purchase a home for $75,000 to $125,000. Mortgage payments should be about 26-28 percent of your gross monthly income. Existing debt is also considered in the mortgage process, and total debt payments (car payments, credit cards, student loans, etc.) should not exceed 40 percent of your gross monthly income.
Before you start looking at properties in Denver, make a list of “must-have” features along with optional features you’d like to have. “Must-have” features may include the number of bedrooms and bathrooms you’ll need to accommodate your family, location (consider commute to work, which schools your children will attend, etc.), lot size and special needs (handicapped access, etc.). Optional features may include the architectural style, bay windows, landscaping, etc. Having a clear idea of what you need versus want will help us find the perfect Denver home for you.