Buying a Home in Colorado From Out of State: What to Line Up First

Quick version: if you're moving to Colorado from another state, line up your financing first, while you still live where you are. Then plan one focused trip with a real preapproval behind you. Below is a simple order to follow, what a lender may look at when your job is changing, and the Colorado property details worth checking early.

Start with financing, not flights

If you book a trip first, line up a full weekend of showings and fall for a house on Saturday, you're starting on the loan after you've already chosen the house.

Much of the financing work can start before you move. You can gather documents, talk with a lender and get preapproved before you pack a single box.

It also means you tour knowing your number. That's a much calmer way to fall in love with a house.

If you rent now, the same is true for you. You can start the financing side from where you live today, before you ever tour a home here.

What a preapproval should mean before you travel

Not every letter carries the same weight. The Consumer Financial Protection Bureau notes that lenders use these terms differently: some issue a prequalification based on information you report and only issue a preapproval based on verified information.

So ask your lender plainly what was actually checked. Has someone reviewed your income documents, your credit and your assets, or is the letter based on what you typed into a form?

Either way, a letter isn't a promise. The CFPB's explainer on prequalification versus preapproval letters says these letters tell you about your likelihood of getting a loan, but they aren't firm loan offers. It also says getting preapproved earlier can help you spot credit issues in time to correct them.

For more on what goes into a solid preapproval here, see how to get preapproved for a mortgage in Colorado.

When your job is somewhere else, or changing

This is where the answer really does depend on your situation, so it helps to know what it depends on.

Keeping your job and working remotely. Your lender will still need to review your income and how it's documented, including whether the move changes anything about it.

Starting a new job in Colorado. Some guidelines allow income from a job you haven't started yet. Fannie Mae's guidelines, for example, let a lender use the income in a signed, non-contingent offer letter when specific conditions are met. Whether that fits your loan is something your lender will need to determine.

Self employed and bringing the business with you. Lenders will likely want to understand the business itself. Start that conversation early, because the documentation can take time to gather.

Buying a home you haven't walked through yet

Buying from another state changes a few things about how you shop:

• Your agent becomes your eyes. Ask for video walkthroughs and an honest read on the street, not just the house.
• Inspections carry more weight. You won't be there to notice things in person, so read the report closely.
• Ask early how closing will work. If you might still be out of state, ask your lender and title company what can be handled remotely before you assume.
• Plan your move date around occupancy. For some loans, such as conventional loans sold to Fannie Mae, a principal residence generally means one the borrower occupies within a set window after signing the mortgage documents. Rules vary by program, so confirm yours before you plan a slow move.

The Colorado property details to check early

Colorado isn't one market, and in the foothills and mountains the property itself can affect the loan.

• Wells and septic systems. Homes outside city utilities can come with extra inspections and questions. Here's more on buying a Colorado home with a well and septic.
• Homeowners insurance. Get a quote early, while you're still in your inspection period, so the cost isn't a surprise late in the process.
• Loan limits. HUD's FHA and GSE mortgage limits lookup lets you look them up by state, county or metro area.

For a broader look at financing a home here, start with the Colorado mortgage guide.

Timing mistakes that can slow a relocation

1. Touring before you're preapproved. It's the costly one, because the trip is the expensive part.
2. Treating insurance as a formality. Get the quote while you still have time to react to it.
3. Changing jobs without telling your lender. Your income is part of what was reviewed, so talk with your lender before a change, not after.
4. Opening new credit for the move. The CFPB suggests you avoid new loans and new credit cards before you buy, because doing so can lower your credit score.

Once you apply, read your Loan Estimate. The CFPB describes it as the document that tells you important details about the mortgage you requested, and suggests checking that it reflects what you discussed with your lender.

A simple order for the months before your move

• First: get your documents in and get preapproved, so you know where you stand.
• Next: choose your area before your house, with an agent who knows that specific area.
• Then: one trip, with showings that fit your preapproval.
• Under contract: insurance quote right away, inspections on schedule and no new credit until you close.

Your next step

Relocating is a lot at once: a new state, maybe a new job, and a long list of details. The mortgage part doesn't have to be a guess.

If you'd like a clearer picture before you book anything, take the homebuyer quiz and see where you stand. You can also reach Diane at 719-687-2112.

Diane Beaumont, Mortgage Loan Originator, NMLS #247026. Benchmark Mortgage, a dba of Ark-La-Tex Financial Services, LLC, NMLS #2143. Equal Housing Lender. Not a commitment to lend.