Moving To Colorado Blog

There are many questions to answer when thinking about buying a new home. Here are a few important considerations.

Some people suggest buying a home as soon as possible to build equity and turn the cost of renting a home into a financially attractive mortgage. But there are important financial and personal questions you'll need to answer before buying a home.

How much can you afford?

This is actually a two-part question: How much can you spend for a down payment and how much can you spend on a monthly mortgage?

Both are easily calculated. Total your savings and determine what you can spend on a down payment while still leaving a comfortable cushion. Then calculate 25 percent of your monthly income, which is as high as most experts say home buyers should go when considering a mortgage.

In 2007, the estimated median home value was $261,945 in Castle Rock and $233,900 across Colorado, according to City Data. Although interest rates and mortgage prices vary, several online calculators can help determine if your down payment and mortgage estimates meet prices in the Colorado real estate market.

Will you still have enough money for repairs?

A major difference between renting and buying is repair cost. Landlords typically handle major problems in a rental unit; if you own the home, obviously you're on the hook for any repairs. After subtracting the monthly mortgage payment and considering the budget for your lifestyle, decide if you can put away money each month for repairs and maintenance.

Colorado suffers few natural disasters and pests. There are few to no natural disasters.  However, homeowners still must repair roofs (hail can be a problem at times) and replace furnaces. 

Most  such maintenance will not be an immediate concern in Castle Rock because many houses are new and well-constructed.

How long will you live in the home?

Before buying a home, determine if you are likely to stay there for at least five years. Selling a home in less than five years could mean losing money and not breaking even on the mortgage.

If you are moving to Colorado, many locals will say you'll never leave once you arrive in the Denver area. However, your employer may need you to relocate to another state, or other personal decisions could force a move out of Colorado.

Within the state, a job change or lifestyle decision may send you looking to move into a new neighborhood. A lucrative job in the Denver Tech Center or downtown Denver may have you considering a move to Castle Rock to cut your commute.

Do you like the neighborhood?

List your needs and desires for a neighborhood. Then walk around the area, talk to the people who live there and do online research. You don't want to buy a smaller, older home in Denver only to realize you really don't take advantage of the city's culture and lifestyle. You might quickly adapt to the outdoor lifestyle and want a small-town atmosphere. You might rather be in Castle Rock, with its network of hiking trails and bike paths, as well as quick access to mountain recreation.

How much work are you willing to do?

In narrowing the search, consider the number of needed repairs and upgrades in the home. Again, the Meadows in Castle Rock is new and solidly built, so homes there will need few if any repairs. "Fixer-uppers" can be attractive at first until you realize the amount of money and time you'll need to sink into the property.

How do you find a real estate agent?

If you are leaning toward buying a house, take time to find a good real estate agent to help answer all of the above questions and guide you through more considerations.

Ask friends and area residents for recommendations. Then conduct phone interviews with a few agents to find one who understands and matches your needs and personality. Finally, ask for references and contact previous clients.

The Denver area has had a relatively large number of foreclosures and an experienced agent can navigate the problems and legal considerations of buying a foreclosed property. Colorado residents are also keen on energy-efficient upgrades, which could save money and boost home value. Again, an agent needs to understand the laws, rebates and technology regarding energy efficiency if it is important to you.

How do you find a lender?

Again, do your homework and find a reputable lender. You might want to start with your bank's loan officer. Working with a single financial institution will simplify the process. Also talk to other lenders in the area. Shop around for the best rates and service. You can meet with dozens of lenders before making any commitments.

If you are buying your first home, some advise against online lenders because you will have many questions and will want the personal service of a local lender you can meet face to face.

Written by Steve Graham