Tips for First Time Home Buyers in Colorado

Thinking about Buying a Home in Colorado?

With strong economic growth, robust job market, and beautiful scenery, it’s no wonder Colorado is one of the top 10 fastest growing U.S. states. If you’re a first-time home buyer, you may not know what to expect from the process. So, in this article, we’ll break down our top tips for first-time buyers in Colorado, and help you learn what you should expect.

Take Advantage of Colorado’s First-Time Homebuyer Programs

Colorado has several programs designed to help first-time homebuyers come up with a down payment. The Colorado Housing and Finance Authority works with a network of approved lenders and community partners to offer first-time homebuyer loans and help with down payments and closing costs.

The following are some of CHFA’s general requirements:

All borrowers have a mid-credit score of 620 or higher
The CHFA Advantage program requires a mid-credit score of 680
Total borrower income must not exceed CHFA’s income limits
Income limits vary by program and county of residence – See more info here
Attend a CHFA-approved homebuyer education class prior to loan closing
Classes can be attended either in person or online
Make a minimum required investment
At least $1,000 toward the purchase of the home
Qualify according to the underwriting guidelines
As determined by one of CHFA’s Participating Lenders

Get started on the CHFA website.

Homebuyers using one of CHFA’s first mortgage loan programs to finance their home purchase are eligible for the CHFA Down Payment Assistance Grant. Even if you contribute towards a down payment, you may still take advantage of this program.

CHFA Down Payment Assistance Grant

Up to 3% of your mortgage
(for a 30-year, fixed-rate loan)
No repayment required

Don’t assume a mortgage payment will be a lot higher than your current rent

If you’re hesitant to make the leap from renting a Colorado home to purchasing your own, make sure you have all the facts. You may be surprised to find out that it’s more cost-effective to buy when looking at monetary impact over time. Being well-informed about your real estate options can help you make the right decision. However, there may be other factors that determine what’s best for your situation.

Do you move often?
If yes, then it might make sense to continue renting due to the fact that it’s a lot easier to end a lease than to sell a house. Or consider keeping it as an investment property and renting it out.
Are you financially stable?
Signing a 30 year mortgage is scary. Be sure you have steady income and a little extra saved up for down payment and closing costs.
How’s the local housing market?
Deciding whether to rent or buy may depend where in Colorado you want to live. Keep an eye on the local housing market and real estate trends in your area.

Don’t buy new furniture in advance

Unless you’re starting from scratch, chances are you have the basics in terms of furniture. Moving into a new place is an exciting time and it’s not unusual to want to upgrade your furniture, but it’s best done after moving when you know exactly what makes sense for each room. Even if you know the square footage of the room, you’ll want to be able to measure the furniture so that it will fit nicely and not take up too much space. You’ll also want to make sure that whatever you buy will fit through your doors. Holding off on buying furniture might also help you set some extra cash aside in case of surprise expenses.

Don’t skip the inspection

There are a lot of costs associated with buying a home and you might be wondering which optional expenses are really worth it in the long run. Skipping the home inspection may seem like a good way to save a few bucks, but think about it for a moment. A home inspector identifies problems that can help you negotiate a lower selling price, or realize that the home needs more work than it’s worth. Even if you think everything looks fine, it’s a really good idea to have a professional inspector take a look. After all, buying a home might be the biggest financial investment you ever make.

What does a Home Inspector do for Homebuyers?

Find Hidden Problems
Home inspectors see things that most people don’t. Whether it’s because they’re using a thermal imaging camera, flying a drone over your roof, or just because looking at homes is what they do all day – not only do they notice things you might have missed, but they have the knowledge to recognize symptoms of a problem that may not be so obvious. You might see a crack on the basement floor, an inspector sees a potential entry point for radon. A home inspector will spot problems before they turn into expensive repairs.
Save Time
Buying a home is exciting, but the real estate process isn’t fun. Close the deal quicker by finding out what needs to be repaired early in the process so you can either request the seller to make the repairs or use it to negotiate a lower price. Either way, get it out of the way before you move in so you’re not running around shopping for contractors instead of enjoying your new home. And if something major comes up in the inspection that dissuades you from moving forward with the purchase, you’re able to walk away from the deal.
Get a Lower Asking Price
Think about it for a moment. Skipping the home inspection leaves a lot of money on the table. Even if it’s only small repairs and replacements, those defects can allow you to renegotiate the terms of a sale, should there be a more minor problem that is not a dealbreaker. Say you hire a home inspector for $400, and they find a cracked heat exchanger. You find out the repair will cost $1,200 and negotiate with the seller, tell them that they can either repair it themselves or knock $1,200 off the price. They agree and you just saved $800! A home inspector will almost always save you some money, and help you identify potentially-expensive issues.
Plan Ahead
Your home inspector may note that there is not an issue with the home currently, but that there could be one in the future. For example, the roof may be 15 years old, and require replacement in 5 years or so. This will help you budget for future repairs, and ensure that the home you’re interested in is truly within your price range. Aside from noting defects, home inspectors include general information about the elements and systems of your home. This might be handy 5 years from now if you’re doing some maintenance or repairs.

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