Most of what determines your mortgage happens before you ever fill out an application. These three things matter more than everything else combined.
Lenders price your loan off your credit score. The difference between a strong score and an average one is often half a percentage point or more on your rate — and that compounds for 30 years.
The math on a $400,000 loan: at 7.0%, principal and interest run about $2,661/month. At 7.6%, it's about $2,824/month. That's $163 more every month — roughly $59,000 over the life of the loan — for the same house.
Pull your credit before a lender does. Dispute errors, pay balances below 30% of limits, and don't open new credit cards or finance a car in the months before you apply. If your score is borderline, a few months of cleanup can be worth tens of thousands of dollars.
Pre-qualification is an estimate based on numbers you self-report — no verification, no weight. Pre-approval means a lender has actually pulled your credit and verified your income and assets. When your offer lands next to three others, the listing agent knows the difference.
To get pre-approved, expect to provide: your last two years of W-2s or tax returns, 30 days of pay stubs, two months of bank statements, and a photo ID. Self-employed buyers should expect more documentation, not less — typically two full years of business returns.
Get pre-approved before you start touring homes. In a competitive situation there's rarely time to start the process after you've found the one.
The payment a rate quote implies is not the payment you'll actually make. Property taxes, homeowners insurance, HOA dues, and (with less than 20% down) mortgage insurance all stack on top. Colorado property taxes are comparatively low, but insurance costs along the Front Range have climbed sharply in recent years — budget for it.
Lenders measure affordability by debt-to-income ratio: your total monthly debt payments divided by gross monthly income. Under 28% is comfortable, under 36% is workable, and 43% is where most loans top out. Qualifying at the top of your range and living there are two different things.
Every listing on this site shows an estimated total monthly cost — principal, interest, actual property taxes, insurance, and street-matched HOA dues — so you can search by what you'd actually pay per month, not just sticker price.
Lenders re-verify your finances right before closing. A new car loan, a new credit card, a job change, or a large unexplained deposit can delay or kill your loan — even after you're under contract. From application to keys, keep your financial picture exactly as the lender saw it.
See where a payment fits: try the mortgage calculator. Ready for the full picture? Read the 10-step home buying guide. Or search homes by monthly payment.
Rob Thompson and Iconic Colorado Properties are not lenders and this is not lending advice or an offer to lend. Rates and figures shown are illustrative examples. Consult a licensed mortgage lender for quotes based on your situation.
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