Colorado Mortgage Lender

    The Best Colorado Mortgage Lenders In 2021

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    Since 2020, Colorado’s housing market has gotten red hot. 5280 – a Denver-based lifestyle and culture magazine – called it a “feeding frenzy” and a “gold rush” and stated that the COVID-19 pandemic “provided fuel for an already-blazing demand for real estate”. 

    Why? Between its low urban density, beautiful weather, endless mountain views, and proximity to the Rockies, Colorado is one of the best places to buckle down and work remotely. 

    With that being said, house hunting in Colorado – at least for the foreseeable future – won’t be easy. But with a real estate agent who knows the local area well, a good grasp of Colorado mortgage rates, and a mortgage lender that can meet your needs, your dream home should be within reach. 

    Here, we zero in on the essential criteria for choosing a lender and 5 of the best Colorado mortgage lenders in 2021!

    How To Choose A Mortgage Lender 

    Before we discuss our picks for the top Colorado mortgage lender, let’s talk about what every homebuyer should consider when choosing a mortgage lender. We also turned to the following factors when deciding on our top 5:

    Mortgage Options

    There are several loan products you can choose from, including: 

    • Conventional mortgages: These are mortgages that are not insured by a government agency. It’s common for conventional mortgages to be conforming, or fall within the limits set by finance authority Fannie Mae/Freddie Mac.
    • Conforming loans: These are home loan products that fit into Colorado’s maximum borrowing limit of $548,250. Bear in mind that the limit could be higher in certain high-cost markets. Summit County, for example, has a limit of $822,375.
    • Jumbo mortgage: Jumbo loans are mortgages that exceed the maximum borrowing limit. 
    • Fixed-rate loans: Unlike adjustable-rate mortgages (which we’ll get to next), these loan types have interest rates that stay fixed for the duration of the term. So, if you have a 10-, 20-, or 30-year fixed loan, your interest will not change within those 10, 20, or 30 years. This type of loan is preferred by homebuyers who value consistency and predictability. 
    • Adjustable-rate mortgages: ARMs have two periods: an introductory period wherein the interest rate remains fixed, and the rest of the term wherein the rate can fluctuate each year. Usually, ARMs come in 3/1, 5/1, 7/1, or 10/1 terms, with the first number representing the initial fixed period and the second number representing the number of times the interest rate can change annually. 
    • Government-backed loans: These are loans aimed at first-time homebuyers, buyers with poor credit ratings, and/or people with limited funds for down payments. There are three agencies that offer loans: the Federal Housing Authority (FHA), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA). These agencies accept lower-than-usual credit scores or down payments. 
    • Mortgage refinancing: Getting a “refi”, as it is often called, is the process of taking out a new home loan to pay off an existing mortgage. Most homeowners opt for a refi when the current mortgage rates and/or terms are better than what they’re currently paying for. As such, getting a refi can help make it easier to pay back loans and avoid financial difficulties. There are several different kinds of refis, including rate and terms refinancing, cash-in refinancing, and cash-out refinancing. 

    Home equity lines of credit: Also called a HELOC, this financial solution works like a credit card, with your home acting as collateral. HELOCs are not to be confused with home equity loans, which are loans that allow homeowners to borrow against their house's equity.

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    Affordability

    When we look at affordability, we don’t consider interest rates because these fluctuate over time due to market conditions. Instead, we consider how easy it is for homebuyers to secure a mortgage from a particular lender. For example, each lender will have its own limits and rules when it comes to things like minimum credit score and down. 

    Here are the main factors that we look at: 

    • Minimum FICO score: Your credit score is, in a way, a reflection of your ability to manage your finances. This is why most lenders require lenders to meet a certain rating. Credit scores range from 300 to 850, but most lenders set their minimum at 620. However, there are lenders who will accept lower scores, especially from first-time buyers. 
    • Minimum down: Back in the day, borrowers had to shell out 20 percent upfront for their mortgage. These days, it’s easy to find a lender who can accept as low as a 3 percent down payment. However, some lenders require low-down borrowers to pay for private mortgage insurance as well.
    • Closing costs: Down payments and monthly mortgage payments aren't the only costs you'll have to think about. Closing costs - which could include anything from application fees and origination fees to underwriting costs, rate lock fees, and pre-purchase inspection fees – can amount to up to 5 percent of your mortgage’s value. 
    • First-time homebuyer programs: Most states will have their own version of a first-time homebuyer program. These down payment assistance programs can help young families or individuals cover down payments, taxes, and closing costs. 

    Application Process

    When reviewing a lender’s application process, we ask the following questions:

    • Can the application process be completed online? Some lenders allow applicants to complete the application process online – making it easier for those who may be too busy to make a trip out, live far away from the nearest branch, or simply want to limit their face-to-face interactions with the pandemic still going on. 
    • Can the homebuyer view mortgage rates online? Some lenders will have rate comparison tools and online calculators to help make it easier for buyers to compare lenders online before even sending an application. While this isn’t a huge deal-breaker, this can help save you a lot of time and effort.
    • What information and requirements do I need to get a loan estimate? Depending on your lender or home loan officer, you may need to provide your name and contact information, your income (as a bank statement), an employment verification letter, your Social Security number, an estimated value of the property, the property address, and the loan amount.
    • How long will it take to apply? The average time it takes a homebuyer to complete their application is between a few weeks and several months – that’s the time it takes between submitting one’s documents, meeting with a loan officer, and finally closing one’s mortgage. 
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    Customer Service And Satisfaction

    Finding a lender with good customer service is one of the most important things you can do as a homebuyer. After all, you will be spending years – decades, even – coordinating with one group of real estate professionals. 

    Thanks to the internet, learning how well a company treats its customers has become a lot easier. At Wesley LLC, we look at three areas: online reviews, JD Power ratings, and Better Business Bureau ratings.

    JD Power is a marketing research firm that specializes in data analytics and consumer insights. Each year, it releases customer satisfaction studies across different industries, including one for the top mortgage lenders in the US.

    Meanwhile, the BBB website is a good place to find out how “trustworthy” a lender is and how “likely it is to interact with its customers”. The BBB rates businesses on a grading system of A+ to F. 

    Availability

    Finally, you’ll want to check whether a prospective lender is easily accessible to you. Check if there are loan offices or brick-and-mortar branches near you – places where you can talk to actual human loan officers or mortgage brokers. However, it shouldn’t be too much of a deal-breaker to you if you’re fine with a purely online transaction. 

    5 Best Colorado Mortgage Lenders In 2021

    Here is a quick overview of our top 5 mortgage lenders in Colorado:

    LenderMin. Credit Score (FICO)Min. Down PaymentBBB Rating (A+ to F)JD Power Rating (out of 1000)Best For
    New American Funding6203%A+N/AFirst-time homebuyers/buyers with poor credit
    Cherry Creek Mortgage Co. 6203%A+N/AOnline resources
    Better6203%A-N/AOnline applications
    Navy Federal Credit Union5800%Not accredited867VA home loans
    Guaranteed Rate6203%A-832Low rates and fast application process

    1. New American Funding

    Min. credit rating: 620 

    Min. down payment: 3%

    Loan types offered: 

    • Conventional loans 
    • Jumbo loans
    • FHA loans
    • VA home loans
    • USDA loans

    BBB Rating: A+

    JD Power rating: N/A

    Overview: New American Funding is a national mortgage lender based in Tustin, California. A great fit for first-time homebuyers, this lender offers first-timer assistance programs, down payment loans, as well as attainable home mortgage options for underserved communities – especially Hispanic and black homebuyers. 

    Aside from all this, one great advantage of making a purchase through New American Funding is the I CAN Mortgage program, which lets borrowers customize their mortgage terms as long as they’re within eight to 30 years. Those who qualify for the I CAN Mortgage program must pay a minimum down of 5 percent and have a credit score of 620 or higher.

    Finally, New American Funding offers a no-frills, fully online application process that takes a matter of minutes. Registrants can expect their pre-approval offers in as little as 24 to 48 hours. 

    Availability: New American Funding originates loans in all states and the District of Columbia except New York and Hawaii. 

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    2. Cherry Creek

    Min. credit rating: 620

    Min. down payment: 3%

    Loan types offered: 

    • Conventional loans
    • Jumbo loans
    • FHA loans
    • VA mortgages
    • USDA loans
    • Home refinance

    BBB Rating: A+

    JD Power rating: N/A

    Overview: Based in Colorado Springs, Cherry Creek is a family-owned mortgage lender that offers a wide variety of loan programs, including a low-down option backed by financial institution Fannie Mae called HomeReady. To qualify for this mortgage product, homebuyers just need to pay a 3 percent down payment and cover the cost of mortgage insurance.

    Cherry Creek also boasts a website that is chock-full of useful resources, online tools (like a mortgage calculator), and articles that can be useful to first-time homebuyers.

    Availability: Cherry Creek is available in 33 states, excluding Alaska, Delaware, Georgia, Hawaii, Kentucky, Maine, Massachusetts, Mississippi, Missouri, New Hampshire, New York, North Carolina, North Dakota, Rhode Island, Vermont, Virginia, and West Virginia.

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    3. Better

    Min. credit rating: 620

    Min. down payment: 3%

    Loan types offered: 

    • Conforming loans
    • Jumbo loans
    • FHA loans
    • Mortgage refinance

    BBB Rating: A-

    JD Power rating: N/A

    Overview: Unlike the other lenders on this list, Better is an online-only lender that charges neither application nor origination fees. As such, closing costs will often be lower at Better when compared to its biggest competitors.

    Another major advantage is its intuitive, 100% online application process – prospective borrowers can sign up in three minutes, get basic pre-approval on the same day, and get a more or less accurate estimate of how much they can expect to spend throughout the process. 

    Availability: Better is an online-only lender, meaning it does not have any brick-and-mortar locations. However, it is available in 43 states, excluding Hawaii, Massachusetts, Minnesota, New Hampshire, Nevada, Virginia, and Vermont.

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    4. Navy Federal Credit Union

    Min. credit rating: 580

    Min. down payment: 0%

    Loan types offered: 

    • Conforming loans
    • Jumbo loans
    • VA loans
    • Mortgage refinance

    BBB Rating: Not accredited

    JD Power rating: 867. However, the brand is not eligible to be in the overall ranking because it does not meet the study award’s criteria.

    Overview: Considered the largest credit union in the United States, Navy Federal is also one of the best places for military vets to get a good deal on a mortgage. Navy Federal offers active-duty and former members of the military (as well as reservists, Department of Defense civilians, and relatives of the aforementioned) low- and zero-down payment mortgage options. 

    One of the best things to come out of Navy Federal Credit Union is its FreedomLock rate lock program, which allows homebuyers to relock their rates if the interest rate dips within 60 days of their initial rate lock.

    Unfortunately, Navy Federal also has a record of slow approval times. If you’re in a rush to get a mortgage, maybe this lender isn’t the best option for you.

    Availability: Navy Federal is available in all 50 states. However, the credit union only has a handful of branches in the state of Colorado. 

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    5. Guaranteed Rate

    Min. credit rating: 620

    Min. down payment: 3%

    Loan types offered: 

    • Conforming loans
    • Jumbo loans
    • FHA loans
    • VA loans
    • USDA loans
    • HELOCs
    • home equity loans
    • Refinance

    BBB Rating: A-

    JD Power rating: 832

    Overview: With some of the lowest rates and an excellent 100% online experience, Guaranteed Rate is an excellent choice for younger, tech-savvy homebuyers – especially those who don't have the best income and are looking for a lower rate than what you can usually find online these days. Guaranteed Rate offers sample rates on their website too, making it much easier for users to canvass and compare rates. 

    All in all, convenience is what Guaranteed Rate can assure its customers. Its application process is akin to Better’s fast and easy online procedure. Plus, you can handle your monthly mortgage payment online, and you can even upload digitally signed documents (securely!) for a faster, worry-free transaction.

    Availability: Available in all 50 states

    Closing Thoughts

    Since the COVID-19 pandemic struck, Colorado has become one of the hottest states in terms of real estate, with hundreds of thousands of dollars being invested in homeownership. As such, you’ll need a good realtor and a trustworthy lender to make sure you can find competitive rates and secure your dream home over at the Centennial State.

    Want to learn more about home loans in Colorado and Colorado mortgage rates? Interested in financing an investment property? Or perhaps you need help with your other financial goals? Either way, you can rest easy with Wesley Mortgage, LLC. Our site is chock-full of resources on everything you need to know about buying your own home, from pre-approval to closing. 

    Written By Ed Wallace
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