You’re an adult. You have a good job. You know what you want out of life. But are you ready to buy your first Colorado home? There are many ways to tell if you’re ready to buy a home, but today we’re going to give you what we consider the top five. Here you go – the top five reasons to know you’re ready to buy your first Colorado home.
You know the difference in cost between what you’re currently renting and what it would cost to buy your first Colorado home. Some say that renting is simply throwing money down the drain, but there are definite advantages to renting as well. When you become a Colorado home owner, you have to pay for all the utilities, maintenance, taxes, and all other home owner expenses. If you’ve done the math, you’ll know if you’re prepared to take on that financial responsibility or not.
Have a Backup Plan
No one wants to think about this, but what would you do if you lost your job? You wouldn’t want to have to foreclose on your brand new Colorado home if something suddenly happened to your income. What would you do if you lost your income for three months? Six? A full year? Have a backup plan in place. Perhaps you have six months of living expenses currently in savings. Or maybe you have a side job that you could work more if you were laid off from your full-time position. Whatever the plan may be, make sure you’re ready for all the financial responsibilities when you purchase your first Colorado home.
Know the Costs
Be realistic about the costs associated with owning your first Colorado home. You’re going to need to pay for more than just the mortgage. You must keep in mind maintenance, utilities, repairs, a potential escrow account (some banks require it), and possibly even a homeowners association fee. Do your research. Know what the cost, upkeep, and utilities of the Colorado home you’re looking at are going to be.
Save for a Down Payment
Many banks will not lend you the full amount of a home. They want you to be able to put 20% down on your own. Don’t wait for your Great Aunt Erma to give you the money. Make sure you have this amount saved for your Colorado home, while also making sure you’ve taken care of #2 above.
Know What You Can Afford
A good rule of thumb is to buy a home that is about two times that of your annual income, but some would say three times is acceptable as well. Buying more of a house than you can afford can prove disastrous. Make sure you know how much you can afford while continuing the lifestyle you currently have (or want to have).
There you have the five reasons to know you’re ready to buy your first Colorado home, or any home actually. If you feel you’ve met all the criteria, Patty here at Colorado Mountain Real Estate would love to help you find the Colorado home of your dreams. Contact us today so we can help you get the process started.