Colorado is a beautiful place to live, with scenic outdoor recreation, family-friendly neighborhoods, and a thriving economy. Many families are flocking to Colorado, but often find that they’re priced out of homes or unable to make a quick enough offer. If you love the idea of Colorado living but aren’t sure how to afford a decent option for you or your family, you’ll want to know how to gain an edge in the real estate market and make homes more accessible to you.

Choose a City Wisely

While many families and young professionals flock to popular cities such as Denver or Boulder, Colorado also offers numerous hidden gems that can provide a more affordable purchase price than their bigger urban counterparts. Explore charming Colorado towns with growth potential, such as Longmont, Canon City, Greeley, Fountain, or Loveland. Travel around Colorado and discover the most affordable neighborhoods and their reasons for being so. Even suburbs outside of the larger cities can offer steep discounts compared to city limits. If you’re flexible about location, you may be able to save a lot of money on your dream home.

Explore All Financing Options

While you don’t want to get a home loan you can’t afford, there may be some loan types that offer more flexible interest rates and down payment requirements so you can focus on purchasing a home that meets your needs and budget. Instead of assuming you need a conventional loan, look into all of your options. If you’re looking for more rural options, you may qualify for an attractive USDA mortgage. If you’re a veteran, compare the benefits of a VA loan vs conventional loan—there are often no down payment requirements. If you’re a lower-income individual than the local population, you can usually qualify for an FHA loan with more lenient requirements and more approachable rates. Before you opt for any one type of loan, explore all of your options and learn what you can qualify for.

Learn About Colorado Home Buying Assistance

Saving up for a down payment for an expensive Colorado home may be intimidating. However, depending on the area you’re looking for and your income level, you may be able to qualify for home-buying assistance that can reduce your closing costs, down payment, or entire home loan. Learn about the local city and county programs that offer homebuying loans or grants to help you make the purchase. The Colorado Housing and Finance Authority (CHFA) offers multiple down payment assistance loans and mortgage credit certificates. In cities like Denver, MetroDPA offers down payment assistance to individuals with a specific income level. Qualifying for these programs can significantly reduce the amount of money you owe at closing or in general. Work with a lender who is familiar with these programs to help you qualify. You may be required to take homebuyer education courses to qualify, but these typically do not require a significant amount of your time.

Work With the Right Lender

You shouldn’t work with the first lender you find until you have compared multiple options. Some lenders can give you more attractive interest rates, down payment requirements, and access to helpful homebuying programs. Ensure you compare lenders to ensure a positive experience and a strong relationship, as well as rates that meet your needs. If you’re not satisfied with the communication from a particular lender, consider finding a new one. Their job is to make borrowing easier for you, not more difficult. There are many Colorado lenders to choose from that are familiar with local down payment assistance programs and home loans.

Adjust Your Home Needs and Wants

In an area that costs a pretty penny to live in, you may not be able to check all of your boxes in a home. Revisit what you want and need in a house; you may find that you’re more flexible than you realize. You can always renovate a home later on, but if you can’t afford a home at all, you’ll be stuck renting until you can save up more money. Consider making compromises on certain home needs; if there is any flexibility, scratching some items off your home checklist can open up more homes for you to consider.

Find a Good Real Estate Agent

A real estate agent will help find the safest neighborhood and best home to meet your budget and needs. Just like a lender, you do not need to settle for the first option you find. Consult with various real estate agents and select the one that best aligns with your communication style, lifestyle, and home needs. A real estate agent should be very familiar with the Colorado area you’re considering, and secure quick offers when you’re ready to make them. They shouldn’t encourage panic buying, however—you don’t want to be stuck with a home that you don’t like due to the fear of missing out. A decent real estate agent will be able to find exclusive homes in your budget that you may have missed.

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Obtain a Pre-Approval

When you’re not sure what you can afford, touring homes and making offers can be a stressful process. You may not receive an offer until you obtain pre-approval from your lender. Get a pre-approval for a home loan amount you’re comfortable with in order to make the homebuying process smoother and easier. Knowing what you can afford can eliminate a lot of mystery in the homebuying process and determine if you can afford a Colorado home with your current financial status.

Conclusion

Colorado is known for its steeper cost of living, including home prices. The market is also quite competitive; any affordable home is quickly snatched up. There are a few ways to make your way into the competitive market, however. Finding the right real estate agent and lender, and obtaining a pre-approval, can help immensely. Knowing what you can afford, and making homes more affordable by qualifying for homebuyer assistance and the right mortgage type, can help your Colorado dream home become a reality.

John Mali Director of Media Relations

Director of Media Relations at AboutBoulder.com

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