As 2019 comes to a close, you’re probably finalizing your resolutions for 2020. Why not make this the year you move into a home of your own? Mortgage rates are expected to remain favorable for buyers, meaning 2020 will be a big year for those entering the housing market for the first time.
Just because you may feel as though you’re ready to buy a house doesn’t mean the process will be easy. This is especially true for hopeful buyers in Colorado, where home prices continue to soar. You’ll see that becoming a homeowner involves more than simply browsing neighborhoods and signing off on some paperwork.
Here are eight tips for first-time home buyers in Colorado.
Find a real estate agent you trust
We can’t emphasize this enough. An experienced real estate agent should have no problem walking you through every home buying step, taking the time to answer any questions you have. Trust is the biggest thing to consider when hiring a realtor, as no two agents are the same.
Ready to interview realtors? These eight questions will help you get started.
Get your finances in order
We want to preface this by saying it may not be a good idea to buy a home if you’re upside down with your finances. Before getting too far ahead of things with your agent, double-check that you can afford a mortgage. This means creating a budget and calculating your debt-to-income ratio.
Your lender plays a major role in your homeownership journey. In short, this person is responsible for telling you how much home you can afford. First-time buyers in Colorado can gain an edge by obtaining a pre-approval letter from their lender before looking at homes.
Look into down payment assistance options
It used to be a necessity for home buyers to come up with a 20% down payment. Fortunately, that’s no longer the case, as there are a number of low down payment programs available for borrowers. Take CHFA loans, for example, which are designed for those with limited income, a mid-credit score minimum of 620, or a higher debt-to-income (DTI). Many Coloradans use CHFA to get into a house for as little as $1,000 down.
Save, save, save
We aren’t just talking about saving for a down payment or your monthly mortgage payment. You’ll quickly find that a house requires maintenance and repairs from time to time. Whether it’s a busted garbage disposal or a faulty light switch, you need to have the funds available in order to fix it. Do yourself a favor and save as much money as possible immediately before and after moving into your house.
Let’s say you were approved for a $400,000 home. Your first thought may be to look all over the state for the biggest and most beautiful $400,000 house. Don’t let your approval amount dictate how much you spend on your first place. Who knows? Maybe you’ll end up closing on the perfect starter home for $375,000.
Decide what you truly need
This ties back with the previous point about starting small. As a first-time homeowner, you’ll see your residence as a blank canvas, with opportunities to update the kitchen, overhaul the bathrooms, transform the backyard — you get the idea. Again, though, remember this is your first house. You probably won’t have a place that has everything you want in it right away. Decide on the things you must have as soon as you move in and then make a list of what you’d want in the future.
Opt for an inspection
The home inspection might be the most overlooked part of the entire buying process. Ironically, the inspection should be a top priority for sellers and buyers alike. This is your chance to see if there any maintenance issues with the house before purchasing it. While it might be tempting to waive the appraisal and inspection, your best bet is moving forward with an inspector who puts health and safety first.
Get moving now
Every home buyer’s experience is different. Believe it or not, some go from pre-approval to closing in only a few weeks. Others, meanwhile, take upwards of a year to finally get into their home. That’s why we suggest starting the process now if it makes sense to do so. Giving yourself a cushion allows you to find the right agent, figure out your finances, and ultimately, learn more about what goes into buying a house.
At American Home Agents, we pride ourselves in helping our Colorado neighbors become homeowners. Contact us at (303) 695-5900.