however, homes typically stay on the market farseeing in Edwards, so you ‘ll be able to take your time and potentially find a better deal. The more you know about the steps to buying a house and Colorado ‘s current real estate trends, the more prepare you ‘ll be to navigate this complicate action as quickly and smoothly as possible. No matter where you are in your family buy travel, Clever ‘s concierge team can connect you with local very estate pros who will help you purchase your Colorado dream home ! The best region ? When you buy with a Clever real estate agent, you could earn a cash-back refund worth up to 0.5 % of the home price. On a qualifying $ 300,000 purchase, you ‘d get $ 1,500. That ‘s real money back in your pocket ! » START : Buy with a acme local agent, save thousands with Clever Cash Back
Step 1: Save for a down payment
🔑 Key Takeaway: Your down payment can be less than 20 % of the purchase price — $ 116,220 for the typical home in Colorado — but you ‘ll have to purchase mortgage indemnity and pay more interest over the liveliness of your loanword. Your down payment is the initial dowry of your home ‘s purchase price that you pay at close up. Your mortgage lender will pay the remaining balance. typically, mortgage lenders in Colorado want you to contribute 20 % of the purchase price as a down payment. That would be $ 116,220 for a $ 581,101 base — the typical home plate measure in Colorado. however, you have options to lower your down payment amount. Government backed loans, like VA and FHA loans, allow you to contribute 0 % and 3.5 % of your home ‘s purchase monetary value respectively. evening conventional loans allow for devour payments adenine first gear as 3-5 % ( though the minimal varies by lender ) .
|mortgage Type||Minimum Down Payment ( % )||Down Payment ( $ )|
|VA Loan||0 %||$ 0|
|FHA Loan||3.5 %||$ 20,339|
|conventional||3 %||$ 17,433|
» READ MORE: Everything you need to know about low-income home loans But making a down requital of less than 20 % comes with some risks. first, because you ‘re borrowing more money, you ‘ll have a higher monthly payment and pay more in sake over the life of your lend .
|Down Payment||monthly Payment||total Interest||sum Cost|
|5 %||$ 29,055||$ 573,866||$ 1,154,967|
|20 %||$ 116,220||$ 483,255||$ 1,064,356|
second gear, you may have to purchase mortgage indemnity. ceremonious loans require individual mortgage insurance ( PMI ) until your loanword balance reaches 80 % of the purchase price. FHA loans, on the early hand, require a mortgage insurance agio ( MIP ) for the life of your loans. mortgage insurance costs around 1 % of your mortgage libra annually. however, rates vary based on your devour requital and credit score. typically, your mortgage policy payment is added to your mortgage requital each calendar month. VA loans do n’t charge mortgage policy. alternatively, you ‘ll pay a VA lend fund fee at close, which can range from 1.4 % to 3.6 % of the buy price .
Colorado down payment assistance programs
Do you need aid saving up for a down payment ? Colorado offers numerous down payment aid programs for first-time and low-income homebuyers. here are a few great resources that may help you out :
CHAC Down Payment Assistance Program
Colorado Housing Assistance Corporation ’ sulfur ( CHAC ) Down Payment Assistance Program is available for first-time buyers with low-to-moderate income. The aid is given to participants as a moment mortgage which needs to be paid monthly. To be eligible for this program you must contribute $ 1,000 to your down requital. If you ‘re function of Colorado ‘s disability program, this sum is reduced to $ 750. however, all participants must complete a homebuyer class approved by the CHAC .
CHFA FirstStep Plus
The Colorado Housing and Finance Authority ( CHFA ) offers the FirstStep Plus for participants with a CHFA FirstStep home loan. This broadcast provides down payment aid for up to 4 % of the initial mortgage loanword amount. aid comes as a second mortgage that acquires no interest and requires no monthly payments until the borrower pays off or refinances their family. Applicants must have a minimal credit score of 620, and income limits lend oneself. You can check if you qualify for the program here .
CHFA SmartStep Plus
The CHFA besides offers the SmartStep Plus Program for participants with a SmartStep home lend. Down payment aid may come as a grant to cover up to 3 % of the sum loanword amount or as a second gear mortgage to cover up to 4 % of the loanword come. This program is not restricted to first-time homebuyers, but you must not earn more than CHFA ‘s annual income limits. You can check if you ‘re eligible here .
U.S. Department of Housing and Urban Development
HUD has a list of alternative programs for Colorado homebuyers here .
Step 2: Get pre-approved for a mortgage
🔑 Key Takeaway mortgage lenders consider your full fiscal situation, including total income, personal debt, and cash reserves, to determine how much you can borrow for a home plate. Most lenders will require your debt-to-income proportion to be less than 36 % including your future mortgage. A mortgage pre-approval letter is an propose to lend you up to a certain come of money to purchase a home. It shows sellers that you are a serious buyer who is financially certified to make an offer on a home. Most sellers in Colorado will require pre-approval before showing you their home. You do n’t have to decide on one lender right nowadays. In fact, you should compare interest rates and pre-approval amounts from respective lenders to make certain you ‘re getting the absolute best terms when you buy your Colorado home .
Get Pre-approved Today!
Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on bribe ? To get a pre-approved for a mortgage, you ‘ll fill out a mortgage application and provide details about your fiscal site. They ‘ll look at the following information to determine your mortgage pre-approval sum :
Lenders need to know that you earn enough to make your mortgage payments each month. Most lenders want your monthly caparison costs to be less than 28 % of your monthly income .
Lenders besides consider your other debts, including recognition cards, student loans, car loans, and personal loans. They use this data to calculate your debt to income proportion ( DTI ) — or your sum debt ( including future mortgage ) divided by your entire income. While some lenders will approve mortgages for buyers with DTI arsenic high as 43 %, it ‘s best to keep your DTI under 36 %. Because of this, you might consider paying off some of your early debts before applying for a mortgage in Colorado .
mortgage lenders in Colorado want to see that you have adequate cash in the bank to cover your down payment and close costs without wholly draining your cash reserves. While this prerequisite varies by lender, most want you to keep at least enough to cover two mortgage payments including indemnity and taxes. ⚠️ Don’t Jeopardize Your Mortgage Approval! once you ‘re pre-approved for a mortgage, it ‘s imperative that your fiscal situation does n’t change. If your credit drops, it can derail the process and keep you from closing on your house. here are some easy ways to ensure your credit does n’t change after you receive your pre-approval letter :
- Avoid opening new credit accounts
- Don’t close any accounts that have been open for a long time
- Make all of your credit card payments on time
Step 3: Choose the right location
🔑 Key Takeaway search for neighborhoods where :
- Home prices are within your price range
- Home values are on the rise
- The local amenities support your lifestyle
A house ‘s region can be just a authoritative as its layout and features. In general, you should consider the follow factors when deciding which neighborhood is best for you :
What’s your home buying budget?
once you know your budget ( a pre-approval letter will tell you the most you can expect to borrow ), you can narrow your search to neighborhoods where homes are selling within your price range. presently, the distinctive home value in Colorado is $ 581,101, but do n’t worry if that does n’t absolutely match your budget. base prices vary dramatically from city to city and even from neighborhood to region ! besides, look at past home value trends. This will give you an estimate of how much your home ‘s value could go up over the future few years. You want to choose a vicinity that ‘s in your budget, but could besides lead to a big return when you decide to sell. To give you an idea of how appreciation could impact what your firm is worth in the future, consider these examples from three neighborhoods in Colorado Springs :
Home value appreciation in Colorado Springs
|Southeast Colorado Springs||$ 152,540||$ 378,719||59.7 %|
|East Colorado Springs||$ 180,260||$ 433,048||58.4 %|
|Northeast Colorado Springs||$ 217,034||$ 481,989||55.0 %|
once you have a tilt of neighborhoods with homes in your budget, you should evaluate how well each one meets your personal needs and preferences. To finalize your list of target areas, consider factors like :
- School districts
- Your daily commute
- Crime rates
- Restaurants and amenities
- Transportation options
Step 4: Find a great real estate agent in Colorado
Read more: Average Credit Card Debt in America: 2021
🔑 Key Takeaway Interview multiple agents to find one who knows your target neighborhoods, has know in your price range, and communicates well. Your real estate agent will be your main ally during the home buy process. Besides finding and showing you properties, your agent should be an expert on buying a home in Colorado. They ‘ll help you make offers, negotiate contracts, and navigate the close process. Plus, they can recommend other service providers like championship companies and inspectors to help you buy your base in Colorado. Do n’t rush into choosing an agentive role. rather, take the clock to research and interview multiple real estate agents who have have in the neighborhoods you ‘re interested in. you should pay attention to a realtor ‘s :
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Ask each of them questions about your prey neighborhoods, how they prefer to communicate, and their strategy for helping you find and close on your newfangled home plate. You should feel comfortable with the agent ‘s cognition, experience, and process before committing to an agent .
Top Local Agents Hand-Picked for You!
Clever matches you with multiple agents in your area so you can interview, compare, and choose the best one to help you buy your following home plate. Hiring a real estate attorney Colorado does not require you to hire a substantial estate of the realm lawyer to buy a home. however, depending on your circumstances, you might consider hiring one anyways. If you do, treat the serve similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs .
Step 5: Start house hunting in Colorado
🔑 Key Takeaway To help you narrow your choices and find your new dwelling fast, keep in heed these significant factors :
- “Must-haves” vs. “Nice-to-haves”: No home is perfect. As you view homes in Colorado, you’ll have to decide which of your priorities are non-negotiable and which are just nice bonuses.
- Housing inventory: Depending on the time of year and trends in the Colorado cities you’re searching in, you may have fewer options to choose from.
Searching for homes in Colorado is the playfulness separate of the home buy work ! You ‘ll get to look at a variety of homes and discover what you truly want in a home .
Prioritize your needs vs. wants when buying a home in Colorado
Make a list of everything you want in a base and prioritize them. At the top of the list should be the items that are most authoritative to you. This will help you separate your “ must-haves ” from your “ nice-to-haves. ” Your agent can help you understand if your wants are realistic for your budget and favored neighborhoods or if you need to rethink what you ‘re looking for .
Look at current housing inventory
The time of your house search in Colorado can have a boastfully impact on your number of options. For model, in Colorado, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home. On the other handwriting, January gives you the fewest choices in Colorado. Historically, there are 46.8 % ) fewer homes for sale than during Colorado’s extremum season .
Housing inventory in Colorado by season
|Season||New Listings per Month|
Step 6: Make an offer
🔑 Key Takeaway trust on their expertness, keeping in mind these tips for getting your offers accepted :
- Move fast: In Colorado, homes typically stay on the market for 61 day before going under contract — more desirable homes could sell for much faster! If you find a home
you love, you shouldn’t hesitate to submit an offer.
- Know how to sweeten the deal: Price is only one factor you can use to convince a seller to accept your offer. You can also sweeten the deal with other compromises — like no contingencies — to create a deal that works
for you and the seller.
once you find a Colorado house you love, it ‘s time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best dart of convincing the homeowner to sell to you. presently, in Colorado, homes stay on the market for 61 days before going under compress. however, every commercialize goes through seasonal worker changes. During busy months, homes get snatched up more cursorily than others. historically, Colorado homes sell fastest in June, where the average property is only on the market for 43. If your home plate search falls around this clock, you should be prepared to move cursorily and potentially make offers on several homes before yours is accepted. On the other hand, if you buy in January, you have a morsel more clock time to search. Homes typically stay on the market 28 days longer than Colorado ‘s annual average .
Average time homes spend on market in Colorado
|Annual average|| 61 days
What should your offer include?
Your real estate of the realm agent can help you decide which of these coarse options you should include in your offer :
- Seller concessions: You’ll have to pay for most of your closing costs out of pocket when you buy a home, but you may be able to ask the seller to cover some of those costs for you. This option may allow you to offer a higher purchase price and essentially include your closing costs in your mortgage.
- Repair credits: If the home is in need of repair, you could ask for credits instead of having the seller make and pay for the repairs. The seller avoids the hassle of waiting for contractors to complete the job, and you get to oversee the repairs in the future to make sure they meet your expectations.
- Inspection contingencies: Most purchase agreements have inspection contingencies that allow you to change your offer (or back out all together) if the inspection turns up major problems. If you have a high degree of certainty about the house’s condition (like if the seller can show you a recent inspection report), you can forgo this contingency to give the seller a higher sense of confidence.
- Letter to the seller: Many sellers have a personal attachment to the home. They’ve lived there for years and want to know the next owner will take care of the property. Writing a letter to the seller can show them how you picture your life in the house and appeal to their sentimental side.
👋 Next Steps: Talk to an expert!
If you ‘re weighing your options for buying or selling a house, Clever can help !
Our fully-licensed concierge team is standing by to answer questions and provide detached, aim advice on getting the best consequence with your sale or purchase.
Ready to get started ?
Give us a call at 1-833-2-CLEVER or enter your information below. Our concierge team will be in touch soon to help.
Remember, this service is 100 % spare and there ’ s never any obligation .
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home ‘s condition and value before formally purchasing it. You may have an opportunity after this footstep to renegotiate the terms of your shrink with the seller if something unexpected pops up .
- Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
- Appraisals: An appraiser hired by your lender examines the house to determine how much it’s worth.
Home inspections in Colorado
Having your Colorado dwelling inspected by a accredited examiner gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it. Your examiner should check out the follow parts of the property :
- Electrical system
- HVAC system
If the home has a septic system, you should besides pay for a septic inspection to make certain it does n’t have any problems that would n’t be covered in a typical home plate inspection .
disclosure laws in Colorado are reasonably rigorous, but it ‘s a well theme to do extra inspections to ensure that the home has no underlying issues. here are some recommend tests to consider before conclusion on a house :
- Radon testing: If the seller has n’t done a radon test recently, try to get one done a soon as potential. Radon is highly toxic and can easily enter a home undetected. You can regulate a exempt radon quiz kit out from the Colorado Department of Public Health and Environment here .
- Mold inspection: All homes are at risk of mold, so a quick inspection can ensure that there are no hidden health hazards in the house you’re buying.
Appraisals determine the value of the place. If you ‘re using a mortgage to buy your newly family, your lender will order an appraisal to make certain the dwelling is worth the money that it ‘s loaning you . » LEARN : 3 options for buyers after a broken appraisal
Step 8: Close on your new home!
once you finish your inspections and your lender approves your finance, you ‘ll be fix for closing ! completion is the work of finalizing your mortgage and transferring possession of the property. Before you close on your newfangled home, you and your agentive role will do a final walkthrough of the place to ensure that it ‘s still in the have a bun in the oven stipulate. » READ : The concluding walkthrough checklist every buyer needs conclude in Colorado is reasonably straightforward. When you meet at the title company, you ‘ll have to review and sign several documents to complete the property transfer. After this, you ‘ll pay the closing costs to become an official homeowner ! Before signing anything, make certain you read through and in full understand each text file, including :
- The final loan application
- The mortgage promissory note
- The deed
This paperwork ensures that the property will be successfully transferred to your name. If you have any questions about this procedure, try to get answers from your agent before the close date. After completing the paperwork, you ’ ll pay your close costs. For homebuyers, close costs generally fall into four categories :
- Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan.
- Title and escrow charges: Charges paid to your title company for their research and documentation services. You may also have to pay a settlement fee for conducting the closing.
- Prepaid costs: Ongoing costs of homeownership, such as property taxes and homeowners insurance. Most mortgage lenders will require you to pay some of these costs up front.
- Other costs: Miscellaneous costs that vary by homebuyer. Other costs might include pest inspection fees, real estate attorney fees, or flood insurance coverage.
The title company can collect the total measure you owe and then disburse the funds on your behalf. Buyers in Colorado typically pay 3-5 % of the purchase monetary value in close costs. For a $ 581,100 home — the distinctive home value in Colorado — that ‘s between $ 17,433 and $ 29,055 ! » MORE : conclusion costs for buyers in Colorado
Frequently asked questions
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Colorado neighborhoods
- Partner with the right real estate agent in Colorado
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes, eligible first-time homebuyers can receive a home purchase loan in Colorado. To qualify for the loan, borrowers must have a recognition grade of at least 620, complete a homebuyer department of education class, and contribute a minimal of $ 1,000. additionally, the borrower ‘s income ca n’t exceed the CHFA ’ mho income limits. Some homebuyers may be eligible for down payment aid based on their first gear lend type. » READ : What are the top first-time homebuyer programs ?