Best Colorado Springs Mortgage Lenders of April 2024

Buying a home in Colorado Springs is like deciding to settle down in paradise. Still, there are a few hoops to jump through, like securing a mortgage. Choosing a mortgage lender may feel tricky, but we're here to help. Here, we introduce you to the five best mortgage lenders in Colorado Springs we’ve found, tell you a little more about each, and answer your questions about how to land the right loan.

New American Funding

With mortgages available in every state except Hawaii, New American Funding offers an exceptional range of loan products. With a minimum acceptable credit score of 580, a lower-than-average score does not necessarily disqualify a buyer. In addition, home buyers who haven't saved much for a down payment can land a loan with as little as 0% to 3.5% down.

Guaranteed Rate

Guaranteed Rate offers mortgages in all 50 states. Its robust online digital platform is nearly impossible to beat, with education materials that walk first-time home buyers through the process. Whether buying a new home or refinancing, customers rave about the service and consider it one of the best Colorado Springs mortgage lenders.

PennyMac

PennyMac is the second-largest mortgage lender in the U.S. One look at the lender's profile indicates why: Low credit scores considered, a wide array of loan options, and highly rated customer service. Plus, PennyMac's streamlined system makes home loan application a breeze.

Veterans United Home Loans

Veterans United may be for members of the military and their families, but it offers far more than VA loans, and deserves to make our list of the best mortgage lenders in Colorado Springs. One of the things we like most about this lender is that it provides customer advocates from every branch of the military to make sure customers are treated the way they want to be treated, from applying to closing on a home. The combination of low down payments and a minimum credit score of 620 makes it easy for military members to qualify for the mortgage they need.

North American Savings Bank (NASB)

Self-employed but need a mortgage? That's okay. Of all our favorite mortgage lenders, NASB is the most flexible when it comes to non-conforming loans. Plus, the company's flexible underwriting practices make it possible for those with lower credit scores to qualify for a mortgage.

How do I choose the best mortgage lender for me?

The best Colorado Springs mortgage lenders can save you thousands of dollars over the life of your loan, which helps explain why it's so important to shop around until you find the right one. Here's what you should look for in a great mortgage lender.

• One that explains the process and answers questions in a timely manner.
• The lender offers both the lowest interest rate and the lowest fees.
• If it's important to you, look for a lender that services its own loans rather than handing them off to a third-party servicer.
• Find a lender that respects your time. For example, if you hope to close on a home in 30 days, make sure the lender can guarantee you'll close on time.

How do I get approved for a home loan in Colorado Springs?

You'll be asked for documentation and at times, it may feel excessive. Rest assured that it's all part of the process. These steps can make it easier to get approved for a Colorado Springs home loan:

1. Order a copy of your credit reports. Each year, you're allowed one free copy from each of the "Big Three" credit reporting agencies -- Equifax, TransUnion, and Experian. You can order all three online through annualcreditreport.com. Once you receive them, go over each with a fine-tooth comb to find any mistakes. Even a small mistake (like a missed payment or balance showing on a debt you've paid in full) can lower your score.
2. If your credit score is low, take steps to improve it before applying for a mortgage. Your credit score is the only evidence a lender has of how well you've managed debt in the past, and the lower your score, the more the lender will charge in interest. It pays to have the highest score you can muster before applying for a mortgage.
3. Have all your ducks in a row. Or, in this case, all your documents in one place. That way, when a lender asks to see your last tax return or W-2s for the last two years, you'll be ready. While you're getting your records together, make a list of your outstanding debts. The lender will ask about your monthly payments, too.
4. Shop around. That means checking with three or more mortgage lenders. If you're worried about what all that checking around will do to your credit score, you have nothing to worry about. Yes, your credit score is dinged a bit when a creditor conducts a hard credit check, but as long as you do all your loan shopping within a two-week period, all those checks will show up as one hard inquiry. That "ding" will quickly disappear with regular, on-time payments.
5. Provide lenders with any documents they request in a timely manner. It's easier on you -- and the lender -- if you have things ready to go when they ask.
6. Once you've been approved, compare lender offers. Look at everything, from the APR (this is the "true" cost of the loan), to the menu of fees each lender charges for loaning you the funds.

What credit score do I need for a mortgage in Colorado Springs?

Depending on the type of loan, it's possible to be approved for a mortgage with a credit score as low as 580. The problem with being approved for a mortgage with the lowest possible score is that the mortgage rate you're offered is likely to be high. That means marrying yourself to a mortgage with higher payments than you might like. If you can take the time to build your credit score, it's worth considering.

How much is a down payment for a home in Colorado Springs?

The amount you'll pay for a down payment depends entirely on the loan type. For example, you can get a VA loan with 0% down and an FHA loan with 3.5% down. One reason you may hear people say you need at least 20% down is that buyers who put 20% or more down on a mortgage loan get to skip paying monthly mortgage insurance. Mortgage insurance is a fee you pay to the mortgage company. In turn, they buy insurance on the loan so if you default, the lender will recover some of the loss.

What home-buyer programs does Colorado Springs offer?

While some home-buyer programs are state-wide, others are offered specifically by El Paso County. Here's a sample of the types of programs available in 2022:

• Single-Family Mortgage Bond Program
• Colorado Housing Assistance Corporation (CHAC) - down payment assistance
• Colorado Housing and Finance Authority (CHFA)
• U.S. Department of Agriculture Rural Housing

What else do I need to know about buying a home in Colorado Springs?

It's no secret we're in the midst of a competitive housing market. The best move is to arm yourself with information about how much homes were worth pre-pandemic and make an attempt to estimate how much they might be worth once prices begin to stabilize (your real estate agent can help).

Don't get so caught up in a buying frenzy that you're willing to spend more than you're comfortable spending, and don't spend so much that you sacrifice your financial security. Before you do anything else, run the numbers to learn how much you can afford.

Finally, don't feel bad if this market is a little too hot for you right now. Waiting it out means more time to gather a larger down payment and ultimately choose the lender that best fits your needs.

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