As a courtesy, the Colorado Springs Real Estate Center offers (in part) these tips for prospective property buyers. If you would like to receive CSREC's Buyer's Guide in its entirety, please contact Sharon Schehr at colorado.1@netzero.com

I think I want to buy a house – how do I start?

 

First, sit down and do some planning. Determining how much house you can afford and what features you want will bring your house hunting into focus.

 

How do I decide how much house I can afford?

 

It will depend on how much you can afford for the monthly housing payment and how much you want to invest as down payment. Monthly payments include Principal and Interest on the mortgage loan. It also includes Property Taxes and Hazard Insurance. Together these are referred to as PITI. Housing costs may also include homeowner association fees, condominium fees and mortgage insurance.

 

How much down payment do I need?

 

It can vary from zero to 25 or 30 percent of the sales price, depending on the type of financing you use. A conventional loan with 20 percent down may allow the borrower to obtain better terms and will not require mortgage default insurance. The obvious sources are savings or proceeds from the sale of a home you already own. Other sources include profit sharing, borrowing against life insurance, stocks and bonds gifts. The 1981 tax law permits a tax-free gift of $10,000 from each parent to each child or from each child to each parent.  The receiver pays no tax on the gift and the giver does not have to pay a federal gift tax.

How do I go about choosing an area and a specific house?

 

Consider what you like about your present community and house. What would you like to change?  Remember, the best time to think about selling your house is when you buy it – what appeals to you (or what turns you off) will probably have the same effect on a buyer when you want to sell the house.

 

Should I look at existing homes or new construction?

 

 In Colorado Springs we are fortunate to have a wide range of affordable homes, both new and existing. An existing home has advantages such as established yards, window coverings and appliances. It may also have a fence, garage door opener and other expensive items you would have to buy separately.  A new home offers you the chance to pick some colors, carpets, countertops, etc. There is also the opportunity to make it just the way you want it.  Do yourself a favor and look at both new and existing homes before making the final decision.

 

What kind of physical details should I look for or ask about?

 

Lot size, age of home, structural condition, need for repairs or updating, exterior maintenance and heating system are a few things to consider. Also consider the features. Does it have a fireplace, garage, good storage and sufficient room?  What is the quality of materials and workmanship? Does it have energy saving devices, good insulation?

Is the roof in good condition?  Is it on public water and sewer or do you have to maintain a well and septic system?

 

How do I find out which homes are available?

 

A complete description of the homes you would like to view is available through the Multiple Listing Service in our office.  When any MLS member broker lists a house for sale, the information is input to a central computer. Included are such things as features, taxes, room sizes and terms.  Every home on the market, both new and existing, can be shown to you by your Real Estate Center sales representative, no matter which firm has a sign on it.

 

A Buyer’s Agent will represent you and your best interest as opposed to the listing agent who represents the seller. Talk to your sales representative about the advantages of a Buyer’s Agent.  There is no charge for this representation.

 

What kinds of financing are available?

 

There are dozens of ways to finance a home. Your Real Estate Center agent will be glad to give you detailed explanations, help you qualify and help you compare the different types t find the method best suited to your situation.

 

VA and FHA loans are government guaranteed loans made through a lending institution.   Conventional loans may be fixed or variable rates. In some situations the seller may finance a first or second loan.  Your lender will be able to offer you a wide variety of options.

 

What questions will a lender ask of me?

 

1. The amount of money you wish to borrow and length of time you will need the money.
2. Your current address. If you have been at that address less than 3 years, your previous address. Your landlord’s name and address if applicable.
3. Your social security number.
4. Your employer’s address.
5. Your gross monthly income.
6. Bank account numbers and approximate balances.
7. Assets – real estate, personal property, paid-up insurance, etc.
8. A complete list of debts with account numbers and approximate balances.
9. A copy of the sales contract.