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Preparing to Buy Your First Home in Observatory Park
April 20, 2016
First time home buyers have many benefits at their disposal when buying a home in Observatory Park in Denver. Take advantage of every opportunity you can when making the switch from renting to homeownership.
- Save, save, and save: When purchasing a home, you will need to have more in your savings aside from your down payment. You may have to pay for an appraisal of the home as well as the inspection. Next, you will also need to pay property taxes. Typically this amount is a percentage of your home’s value. You can learn more about property taxes and calculating for homes you are looking into on HGTV’s website. Last, check to see if the home is in an area with a homeowners association. If that is the case, you will have an additional fee. With the homeowners association, you will receive various benefits from community centers and parks to swimming pools and common area maintenance.  You will also need homeowners insurance and savings for any repairs that need made.
- Credit and Debt-to Income: When preparing to buy your first home in Observatory Park, avoid making large purchases such as a car or items on credit. Why? These large purchases affect your debt-to-income ratio, which can affect how much money your mortgage company will consider to lend to you, or may change any of your stipulations. In general, having a good credit rating helps your chances of getting a mortgage, but it isn’t all based on that. Make an effort to have good active credit and improve your score with these tips from Experian.
- FHA Loans: When buying your first home, you may qualify for an FHA (Federal Housing Administration) loan. These mortgages have the ability for lower down payment percentages as low as 3.5 percent. This element depends on your credit score and history. FHA loans also lower or cover closing costs, and they are more open to your credit situation. When you purchase a home with an FHA loan, you will need to also get mortgage insurance in case you begin to miss payments. Last, if you need to make improvements to a home but are low on funds, an FHA loan may loan you additional money for those. This is part of an additional loan, called a 203k loan. This may give you $30,000 or more for repairs.
- Make an Educated Purchase: When it comes to purchasing your first home, make sure you have thought ahead. Is the home something you can grow into based on your goals? At the same time, is it too big and will have wasted space which will be wasted money each month on heating, cooling and electricity? Also, do the area and neighborhood fit your lifestyle? What about curb appeal for the home and the neighbors? Consider this before making a purchase, as poor curb appeal throughout the neighborhood could make re-selling the home more difficult.