Buying a house in Colorado is exciting. However, you can also get overwhelmed with the properties available on the market.
The vibrant Colorado real estate market has something for all types of buyers. Therefore, if you are not careful, you may end up buying a property that can hurt your financial standing and leave you with an expensive mortgage that can drag well into retirement.
To avoid making costly financial mistakes when buying a home, you need to research well. Here are four tips to keep in mind if you are planning on buying a home in Colorado.
i) Pay off all your debt
Owning a home comes with extra costs that most renters are not aware of. In fact, it can be costlier to own a home than rent.
As a homeowner, you will have to shoulder the maintenance and upkeep costs of the home. These costs can quickly add up to a couple of hundred dollars a month. Therefore, make sure you have no existing debt when buying a home. Apart from this, it’s prudent to have an emergency fund of at least six months for the expected expenses.
ii) Have a budget
Determine how much you are willing to pay for a home.
When scouring potential homes to buy in Colorado, don’t let your emotions cloud your judgment. You may come across a beautiful house that you love. However, if the price is outside your budget, forget about it.
Remember, the mortgage payment is not the only cost you will have to shoulder. There are other monthly fees, such as HOA fees, taxes, insurance, etc. to be paid.
iii) Offer a down payment
Planning on applying for a mortgage to purchase a house? If so, save for a down payment. The more the amount you can offer as down payment, the better. However, strive to offer at least 10 to 30 percent of the price of the home as down payment.
Offering a down payment will save you from having to pay for private mortgage insurance (PMI).
iv) Check the closing costs
Apart from the down payment, you’ll have to cater for closing costs. Generally, the closing costs range from 3 to 4 percent of the purchase price. The lender will determine the costs, which you’ll have to pay on the closing day.
The above are four things you should keep in mind if you are planning on buying a house in Colorado.