How Much Should You Put Down On A House? Debunking the 20% Myth.

Buying a home is a monumental step. It's a declaration of independence, a milestone in your life journey, and a tangible realization of a dream. But if you're a first-time homebuyer, especially in a dynamic market like Colorado's, the process can feel daunting. One common hurdle that many face is the down payment. If you've been told that you need a hefty 20% down to secure your dream home, I've got some exciting news for you.

One hundred dollar bills in the shape of a questions mark in front of a blurred interior house wall

The 20% Down Payment: More Than Just a Number

While many mortgage options allow for lower down payments, there's a reason the 20% mark has its advocates. Here are a couple of its benefits:

• Lower Monthly Payments: A higher down payment usually translates to smaller monthly mortgage payments, giving you more financial flexibility.

• Avoiding Mortgage Insurance: When you put down 20%, you often sidestep the extra cost of private mortgage insurance (PMI), which can add to your monthly expenditure.

Broadening Your Mortgage Horizons

Let's address the elephant in the room. The widespread belief is that 20% is the magic number for down payments. But the reality is, many mortgage options today allow homebuyers to put down significantly less and still secure their dream home.

• FHA Loan: Ideal for single professionals, young couples, and families, the FHA loan requires only a 3.5% down payment. It's a favorite among first-time homebuyers in Colorado, with many of our clients reaping its benefits.

• Conventional Loan: This option allows for a down payment as low as 3%. It’s a versatile choice, catering to various financial situations.

• VA Loan: For our veterans and active-duty military personnel, the VA loan stands out, requiring no down payment at all.

• USDA Loan: Another 0% down payment option, the USDA loan is designed for rural and suburban homebuyers.

• Colorado Down Payment Assistance: Colorado is renowned for its commitment to making homeownership more accessible. The state offers a slew of down payment assistance programs to ease the financial journey of homebuyers. Programs like CHFA, metroDPA, and El Paso County Turnkey Plus, among others, are designed to help residents cover portions of their down payment and closing costs.

For those eager to turn the key to their first home, these options and assistance programs have become game-changers. My team has witnessed countless individuals and families achieve homeownership by leveraging these benefits.

Navigating Colorado’s Unique Housing Landscape

Colorado presents a unique market scenario. With mortgage interest rates at their highest in 21 years and a tight inventory, it’s easy to feel lost in the crowd. Sellers might be holding onto their homes due to attractive rates from yesteryears, but this doesn’t mean your homeownership aspirations are on hold.

In such times, understanding which mortgage option suits you best becomes even more vital. The silver lining? While a higher down payment might offer the benefits mentioned above, it's not the only path forward. And with the right guidance, even in this market, your dream home is well within reach.

Empower Your Home Buying Journey

Stepping into the housing market, especially for the first time, requires clarity and knowledge. More than just securing a loan, it’s about understanding your options, planning for your future, and achieving a dream. While the journey may seem overwhelming, remember this: With every challenge in the housing market, there’s a solution waiting to be uncovered.

Whether you’re a single professional, a couple starting a new chapter, or a young family planting roots in Colorado, the key is to stay informed, patient, and optimistic. Your dream of homeownership is valid, achievable, and closer than you think.

Ready to Start?

If you’re looking to delve deeper into the world of mortgages, down payment assistance, and making informed decisions, the first step is understanding your eligibility. And for that, you're not alone. Start your application now and let's turn that homeownership dream into a reality.

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*No down payment loans: Closing costs and fees may still apply. First lien interest rates may be higher when using a DPA second. Opinions expressed are solely my own and do not express the views of my employer. Pre-approvals are given to clients who have met qualifying approval criteria, for specific loan requirements, and have been pre-approved by a PRMI underwriter. VA home loan purchases, have options for 0% down payment, No private mortgage Insurance requirements, competitive interest rates, with specific qualification requirements. VA Interest rate reduction loans (IRRRL) are only for Veterans who currently have a VA loan, current loan rate restrictions apply, and limits to recoupment of costs and fees apply. VA Cash-out Refinances are available for Veterans with or without current VA loans. Policies and guidelines may vary and are subject to the individual borrower(s) qualification. Program and Lender overlays apply.

CHFA Down Payment Assistance: A Quick Overview for Colorado First-Time Homebuyers

Understanding the complexities of home buying can be overwhelming. Yet, with the right information at your fingertips, it becomes a lot easier. If you're a first-time homebuyer in Colorado, the CHFA down payment assistance (DPA) programs offer an incredible opportunity.

What is CHFA?

• The Colorado Housing and Finance Authority (CHFA) provides financial programs aimed at making homeownership accessible and affordable.

DPA Options from CHFA:

Down Payment Assistance Grant:

• Get up to $25,000 or 3% of your mortgage.

• No need for repayment.

Silent Second Mortgage Loan:

• Offers up to $25,000 or 4% of the mortgage.

• Repayment is deferred until specific events like selling your home, refinancing, or paying off your first mortgage.

Eligibility Criteria:

• Credit score: Must be 620 or above.

• Income: Should be within CHFA's set limits.

• Education: Attend a CHFA-approved homebuyer class, online or in-person.

• Financial Contribution: A minimum of $1,000 towards your home purchase. This means you could potentially buy a home with as little as $1,000 down!

Why The Nick Barta Team at Security First Financial?

• Recognized as Colorado's top down payment assistance lender.

• Known for their local expertise and professional guidance tailored for Colorado first-time homebuyers.

• Closings in as little as 21 days.

Taking the Next Step: If you're considering taking advantage of these opportunities, ensure you're well-informed and guided by the best in the industry.

• Apply Now with The Nick Barta Team and gain unparalleled assistance in your homeownership journey.

In conclusion, with diligent research, the right support, and understanding of available financial aid like the CHFA programs, owning your dream home in Colorado becomes a tangible reality.

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*First lien interest rates may be higher when using a DPA second. Opinions expressed are solely my own and do not express the views of my employer. Pre-approvals are given to clients who have met qualifying approval criteria, for specific loan requirements, and have been pre-approved by a PRMI underwriter.

Avoid These 4 Common Home Buying Mistakes: An Essential Guide for First-Time Buyers

Embarking on the journey to homeownership is thrilling. Yet, like any significant life venture, it's packed with potential pitfalls. Fortunately, with the right knowledge and guidance, you can navigate this path with confidence. Let's discuss four of the most common mistakes many first-time homebuyers make and how to sidestep them.

1. Overextending Your Financial Boundaries

Many of us dream of a picturesque home with every amenity, but reality often holds a different story. It's essential to determine a realistic budget that won't strain your finances in the future. Remember:

• Start with a comprehensive assessment of your current finances and future projections.

• Factor in other substantial costs, such as property taxes, maintenance, utilities, and homeowners association fees, if applicable.

• Engage with a reputable mortgage professional who can guide you to a well-informed decision, ensuring you're looking at homes that align with your actual financial capability.

2. Bypassing the Home Inspection

The allure of a home might be skin-deep. Even if a property appears to be in perfect condition, hidden issues might lurk beneath the surface. Always insist on a professional home inspection. Benefits include:

• Unearthing potential problems like structural damage, faulty wiring, or plumbing issues.

• Offering you leverage in price negotiations if defects are discovered.

• Providing peace of mind, ensuring you’re making a sound investment.

3. Going Solo in Your Property Search

In today's digital age, it's tempting to think that online platforms can replace the expertise of a professional buying agent. However, working with an agent can offer immense value:

• They understand the intricacies of the local market, ensuring you get optimal value for your money.

• An agent's professional network can provide access to off-market listings or early notification of properties about to be listed.

• They are bound legally to prioritize your best interests, giving you an advantage during negotiations.

4. Settling on the First Mortgage Offer

Mortgages come in various flavors, and the first offer on your table isn't necessarily the best. A more favorable rate or term can make a substantial difference over the life of your loan. So:

• Shop around. Compare rates, terms, and fees from various lenders.

• Understand different types of mortgages and which one aligns best with your situation.

• Read the fine print. Ensure there are no hidden fees or clauses that might work against you in the future.

Navigating the home buying process is undoubtedly complex, but with diligence, patience, and the right guidance, it's a journey you can undertake with confidence. If you have any further questions or need expert advice on the home-buying process, don't hesitate to contact us at the Nick Barta Team. We're here to guide you every step of the way, ensuring your dream of homeownership becomes a rewarding reality.

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*Opinions expressed are solely my own and do not express the views of my employer.