As discussed in “Preparing for Home Ownership”, it is important to complete your loan application early in the buying process so the lender can determine the price, terms and rates for which you qualify and issue a pre-approval letter. Your lender is also required by Federal Law to provide a “Good Faith Estimate” following the application process.

Be Picky

It is imperative that you choose your lender with care. This is the person you will trust with handling the funding of your home loan-perhaps one of the biggest investments of your life. Please make sure he/she is ethical, conscientious, trustworthy and responsive.

Handling Loan Deadlines

Here’s the biggest reason I urge you to use a reputable lender: While the lender is not part of the Contract, if he/she fails to complete requirements by the loan conditions deadline, you can lose your entire earnest money deposit. In Colorado, the Contract is not conditional on the loan actually funding.

Also, the Colorado Real Estate Commission’s “Contract to Buy and Sell Real Estate” Loan Conditions Deadline states, “Contract is conditional upon Buyer determining, in Buyer’s subjective discretion, that the availability, terms, conditions and cost of such New Loan are satisfactory to the Buyer.” If you (the Buyer) aren’t satisfied with the loan by this deadline, you can walk away from the contract and recover your earnest money deposit as long as you deliver written notice by the deadline. Of course, I will be in constant communication with you and your lender to make sure this deadline is met.

Stay Close to Home

Pick a licensed lender who is physically located and does business in the Denver Metro-area. This ensures that he/she is familiar with Denver real estate customs and the Colorado Contract to “Buy and Sell Real Estate”. It also adds a measure of security, as the Colorado Real Estate Commission can impose standards and sanctions on local lenders with greater ease than those conducting business from out of state.

Watch Out for “Missing” Expenses

Finally, unscrupulous lenders may fail to include major expenses on your “Good Faith Estimate”. Title insurance, homeowner’s insurance, reserves, or an accurate escrow figure can conveniently be left out of the estimate and end up costing you more time and money. Don’t be afraid to shop and compare good faith estimates-just make sure you start before you go under contract!