Colorado Real Estate is on the rise, as I’m sure you may have noticed and the Denver Metro area is an extremely popular and desired place to live (obviously). So of course with the high demand of living spaces which leads to higher rents and value on property.
I receive several calls a day with people explaining how their rent is going up and are now considering it would be a better cost investment to own vs. rent. If you are paying $1500+ for a one bedroom apartment, why wouldn’t you rather look into purchasing. It seems to make sense, the only problem is in paying higher rents it becomes hard to save money for a purchase.
That being said our down payment assistance (DPA) page on our website is the most visited, which makes sense because most of us would like to purchase but have little or now money for down payment and are looking for alternative options and needing assistance.
As I’ve written previously, there are down payment assistance programs available and they definitely can help alleviate your initial costs in purchasing a home. But I am here to inform you that if you have no money in the bank, down payment assistance will not be enough for your to purchase a home. I’m sorry, that truth can sting a little. It doesn’t mean that you can’t buy, it just means maybe you can’t make it happen right away.
There are closing costs involved when you purchase, which I’ve also previously written about and not all down payment assistance programs cover all of the closing costs, if any at all. There are some programs which can allow the lender to help pay some of your closing costs, but be mindful, nothing is for free! There is a cost to everything and you need to consider that even with the DPA.
You need to be prepared for earnest money, appraisal and inspection fees. Earnest money can run anywhere from $1000-5000, sometimes more. Your lender is not in control of this amount, this is a minimum amount that the seller requires from you when they have accepted your offer. Again, these funds need to be readily available in your account. They can be gifted but make sure to discuss with your lender on the gifting requirements and guidelines and remember, cash is not an acceptable form of a gift funds!
You may have also heard that you can request the seller to help pay for closing costs by offering “seller paid concessions”, this is possible, but again be mindful, this is a sellers market and most sellers may not be willing to contribute their profits to help you buy their home. This is when having a savvy realtor will help you, along with a very knowledgeable lender.
If you are ready to be pre-approved or would like to learn more, contact us.