Your Colorado Springs Life & Home

Money Moves: What You Need to Buy in Colorado Springs

• Lori Thompson • Episode 4

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 How Much Money Do I Need To Buy A House In Colorado Springs?

Ready to dive into Colorado Springs real estate but unsure about the financial commitment? You're not alone. The burning question on everyone's mind is exactly how much cash you'll need to make your Colorado Springs dream home a reality.

Lori Thompson, with over four decades of Colorado Springs real estate expertise, pulls back the curtain on the true costs of homebuying in this candid, no-nonsense episode. She demystifies everything from down payments to closing costs, offering crystal-clear guidance for military families using VA loans and civilian buyers alike. While VA loans offer zero down payment options, Lori explains the often-overlooked expenses like earnest money, inspection fees, and appraisal costs that catch many buyers by surprise.

For conventional buyers, Lori outlines how down payments ranging from 3-20% impact your monthly budget and long-term financial health. She reveals that today's shifting market now allows buyers to negotiate closing costs—something unheard of during the recent seller's market frenzy. Perhaps most interestingly, she shares an insider strategy about assumable loans that could potentially save you thousands in interest over the life of your mortgage, illustrated through her own granddaughter's recent home purchase at a remarkable 2.6% interest rate.

With median home prices hovering around $420,000 and single-family homes under $300,000 becoming increasingly rare, understanding your budget parameters has never been more crucial. Beyond purchase price, Lori highlights the significant variations in property taxes, metropolitan district fees, and utilities that impact your monthly housing expenses. Her practical, straightforward advice eliminates the guesswork and empowers you to enter the market with confidence. Whether you're a first-time buyer, military family facing PCS orders, or looking to upgrade to your forever home, this episode delivers the financial clarity you need for your Colorado Springs home buying journey. Ready to take the next step? Lori's ready to answer your call.

To learn more about RE/MAX Properties Inc. visit:
https://www.LoriThompson.REMAX.com
RE/MAX Properties Inc.
Colorado Springs
719-332-1807

Speaker 1:

Welcome to your Colorado Springs life and home, where real estate meets real talk and maybe a little too much coffee. Hosted by REMAX Properties, licensed realtor, broker and top producer Lori Thompson, a local legend who's been helping military families and civilians buy and sell homes for over 40 years. Whether you're PCSing, upsizing, downsizing or just daydreaming, lori's got you covered. Why? Because she's your lifetime realtor and she actually answers her phone. Imagine that.

Speaker 2:

Whether you're relocating with the military, upgrading to your dream home or dipping a toe in the real estate waters, one question looms large how much money do you really need to buy in the Springs? Lori breaks it down. No guesswork required. Hello everyone, welcome back. I'm Millie M, co-host and producer, back in the studio with Remax Properties, licensed realtor and broker, lori Thompson. Lori, how's it going? Oh, pretty good. Millie, How's it going with you? Awesome, awesome. This question comes up constantly, so I'm glad we're pulling back the curtain with your decades of know-how. How much money do I need to buy a house in Colorado Springs?

Speaker 3:

Well, that's that. That's such a nuanced question. Let me try to break it down and keep it a little bit simpler as much as I can. If you are a VA buyer and you have your VA benefits, they do have zero down financing. However, it is not zero cost. So, upfront, a veteran will need to have earnest money, which is roughly 1% of the purchase price. Plus they need to have money for a home inspection and for the VA appraisal and so that all is dependent on the price of the house. If you are looking to buy a house, conventional, the down payment is anywhere from three to 20%. The reason why is, of course, if you can get the 20%, that's great, because then you can avoid mortgage insurance, which does add a great deal to the mortgage payment. So a lot of it depends on your individual needs.

Speaker 3:

Another thing that we have going on right now which can be really beneficial for the right buyer if you have sold a property and you have some equity, If you have sold a property and you have some equity, we have some really good deals on assuming much lower interest rate loans that were generated a few years ago.

Speaker 3:

So I recently did that with my granddaughter and I had sold a condo she had invested in years ago and she had a nice chunk of change. So her and her husband put down their equity and they were able to assume a low interest rate loan. So the bottom line is to get pre-approved by a quality lender and know up front about what you need to accomplish your goals. It is also extremely important to be pre-approved before you start shopping. So I don't know if that helps at all, but closing costs as average is roughly 2% of the purchase price. That's just a good ballpark amount of loan closing costs. And I want to add just one more thing. Depending on the market we're in like right now, it's more of a buyer's market you can negotiate some of those costs and have the seller pay them on your behalf.

Speaker 2:

That's what I was going to ask. So you're saying prepare to pay for them, so 3% to 20% depending on your needs, but there's wiggle room to negotiate some of those things in the closing for the seller to pay.

Speaker 3:

Yes, and of course it's negotiable. There are some sellers who won't do it, or if it's a really hot property in a specific area, then you have less likelihood of getting that. But I'm seeing more of that than I have in the past five years, which is really good. Especially, it's a mixed market, especially for first, first-time buyers, because first-time buyers are saying, oh my gosh, look at these interest rates, look at these payments. The difference is a couple of years ago, when it was so competitive, they almost didn't have a chance. They'd get blown out of the water by people who were bidding over asking price. No one was paying closing costs just a few years ago and right now there's more flexibility to get into it and I encourage them. You know, once you have a home, you can refinance it when the rates come down. But if you're waiting for those rates to come down, you may or may not be able to get a house, depending on how competitive it gets.

Speaker 2:

You talked about an assumable loan. I know you're not a lender, but is that something that you would ask when you make your offer? Or how do you even find out whether you can assume someone's mortgage, because some people got some really great rates during COVID?

Speaker 3:

Oh yeah, and so the bottom line is there is a field we search, so we specifically. If they've got a good listing broker on the other end, they have marked it. This is an assumable loan, and so, just to give you an idea, I can't promise this, but I actually got my granddaughter a 2.6% loan and so they assumed it, and I think that loan was four years old. So there's 26 years left in that mortgage loan, and so her and her husband and the babies the second one's coming soon they have a house they can afford to live in and still travel and do some of the other things they like, so it can be a very productive way. It might take a little more searching to find one.

Speaker 2:

Gotcha. So what's the average home price in Colorado Springs right now? I know you said it was more of a buyer's market. What budget range should buyers prepare for?

Speaker 3:

Now, that was kind of interesting because the medium price range I would say is probably around $420,000. But keep in mind that's medium. So there are houses occasionally in the $300,000s. There are other homes, of course, that can go up into the millions, depending on what you're looking for. I recently closed on a custom build that was $2.3 million Beautiful, beautiful. But I also have so much fun when I'm closing on a $350,000 home with a first-time buyer. So it just depends on what their qualifications are and what they're looking for. There are still some affordable options, I would have to say, of the ones that are available for financing, it's very difficult to find a single family home under $300,000.

Speaker 2:

That's definitely something to keep in mind. So what monthly payments should buyers plan for besides their mortgage?

Speaker 3:

You know, I would say that the newer the home, the higher the property taxes, the more likely it is to have what's called a metropolitan district, which is kind of like a tax-based HOA. So just know that if they are shopping by payment, they're better off with a little bit of an older home. And then, of course, you have your utility costs. You can get an average. If the home is occupied, you can get an average. If the home is occupied, you can get an average. The seller has to obtain that for you, but you can get an average of what the utility cost is as part of their mortgage payment. Typically there's an escrow for taxes and insurance. Once again, older homes have lower taxes. Newer homes have higher taxes, in part sometimes because of that metropolitan district which helps to pay for sidewalks, street lights etc. It's hard to do a one size fits all payment, but it's worthwhile to look at the different options and what the final payment will be.

Speaker 2:

Gotcha. So just before we go, you said down payment, inspection, appraisal and closing costs. And closing costs. Are there any other things that buyers might be surprised to know if they don't have a qualified realtor like you? We just don't want any surprises at the closing table. Anything else that they should be aware of.

Speaker 3:

Those are the big ticket items. It's just to be prepared and, like I said when I quoted that approximate 2% of the purchase price for closing costs, I was including the appraisal with that. But upfront they're looking at the earnest money of 1%, which does come back to them at closing. And also, what's really important is if they have an inspection done and it does not go well, they can terminate the contract and get that money back, but there are deadlines to that. So it's really important to work with a qualified realtor, because you're gambling a lot of money and you want someone to protect you.

Speaker 2:

Absolutely that protection is key. Thank you so much for giving us a scoop, ms Lori. Your real talk really takes the fear out of these numbers. Can't wait to get back at it next time.

Speaker 3:

All right, sounds great.

Speaker 1:

That's a wrap for this episode of your Colorado Springs Life and Home. Got questions, need advice? Just want to talk about interest rates and granite countertops? Call or text Lori at 719-332-1807. Yes, she'll really respond. Or visit lorithompsonremaxcom to get started with your lifetime realtor, because when it comes to Colorado real estate, lori doesn't just know the market, she is the market.