First Time Home Buyer Tips Colorado Springs Real Estate

Those of us who have had the experience of being first-time homebuyers understand the stress and nervousness of this process. These feelings are especially present in today's real estate market. Below are some helpful tips on how to prepare for your first home purchase and some things to expect during the process. If you have any further questions or are ready to start your home buying process, my team & I would love to be a part of this exciting Milestone! Contact us anytime or give us a call 719-540-6421.  

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Get Pre-Approved for a Home Loan Early on

You may want to get pre-approved with a bank, mortgage broker or mortgage lender ASAP in this red-hot market. IntroLend Front Range is one of our favorites as it shops the best rates FOR you! IntroLend Front Range offers a wide array of options for home loans in Colorado Springs. When it comes to experience with helping borrowers get the best option for their unique needs, IntroLend Front Range has an app that allows multiple lenders to bid on the borrower's unique situation.  We always send our clients to the IntroLend platform because we know they will be in good hands and will be able to not only get the client the best deal for them but to also have top notch service throughout the entire process.

Getting pre-approved also lets you know how much house you can afford. This is especially helpful if the homes you have your eye on are consistently going above asking since you’ll need even more purchasing power when push comes to shove.

It’s not hard or all that time-consuming to get a mortgage pre-approval and it’ll give you more confidence and perhaps make you more serious about finally making the move.

Check your Credit Scores

 FICO Score- Colorado Springs Real Estate

Credit scoring changes can take time, so give yourself plenty of it. Don’t wait until the last minute to fix any errors or issues. While you’re addressing anything that needs more attention, put the credit cards away and DO NOT use them. Avoid making any large purchases, applying for new loans or lines of credit. 

A FICO score includes all of your borrowing/lending activity and breaks it down into these categories:

- Payment History 35%

- Accounts Owed 30%

- Length of Credit History 15%

- Types of Credit Used 10%

- New Credit 10%

Purchases can also increase your DTI Ratio and limit your purchasing power if you don’t pay it off. Additionally, tightening up on spending might give you a nice buffer for closing costs, down payment funds, moving costs, and renovation expenses once you do buy.

Try to keep a clean bank statement, the fewer incoming or outgoing transfers the better during the home buying process.

Be prepared to pay an earnest money deposit

Make sure you have liquid cash for your earnest money deposit Once you find a property, you’ll need to submit an earnest money check with your offer. This is good faith money that says, “I’m a serious buyer.”

Earnest money deposits vary but typically range from 1% to 2% of the purchase price — usually a minimum of $500 to $1,000. These funds are held in an escrow account, and either returned to you at closing or applied to your closing costs and/or down payment.

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Down Payment and Closing Cost

The down payment can range from a minimum 3% to 20% for a conventional loan, and a minimum 3.5% for FHA loans. So, if the purchase price for your first home is $200,000, you may need at least $6,000 to $10,000 as a down payment. A down payment isn’t required with a VA loan or a USDA loan.

Keep in mind, if you purchase a new home with less than a 20% down payment, you’ll likely pay private mortgage insurance (PMI). This adds to your monthly payments. FHA loans also require an upfront mortgage insurance fee in addition to the monthly fee. Private mortgage insurance protects your lender in the event of default.

You’re also responsible for closing costs – which are roughly 2% to 5% of the loan amount (or $4,000–$10,000 on a $200,000 loan).

Some Other Important Costs to Keep in Mind:

-        Appraisal and Home Inspection Fee 

-        Homeowners Insurance

-        Property Taxes

-        HOA Fees (if applicable)

Now that you have a little more insight on what to expect when buying your first home, Are you ready to buy ? Contact us anytime or give us a call 719-540-6421  with any questions or to start looking for your dream home in Colorado Springs!

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Posted by Brooke Falcone on


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