Are You Financially Ready to Buy a Home?

This is often one of the biggest questions that buyers find themselves asking as they weigh the options of home ownership. As real estate agents, we’ve calculated the costs and know that in most cases, owning a home can be a much better arrangement for most than sinking funds into a rent cost that doesn’t get you anywhere. Yet, with buying a home comes many new responsibilities like a downpayment, a mortgage, and the upkeep costs. Here are a few ways you can determine whether buying a home is the best financial decision for your family.

You Have 30% Saved
When planning to buy a home, you want to have enough money saved up to afford your 20% downpayment and 10% closing and moving costs. That doesn’t mean you will actually have to make a downpayment, many lenders can secure loans that don’t require it. However, you will look more appealing to a lender if you do have that money saved up. Not to mention, if you have that money saved up, and don’t use it for the down payment, you’ll have all of that additional money that can be used for new furniture, moving costs, or paying your mortgage.

Your Dream Home Is Affordable
When looking for homes, it’s important to make sure that you can actually afford the home that you want to buy. When thinking about the affordability of a home, you aren’t just taking into account the cost of your monthly mortgage, you will want to consider utilities to maintain it, purchasing extras to furnish it, and even special cleaning appliances or supplies depending on the home. According to NerdWallet, there is a specific amount of money you make per year that coincides with how much house you can afford. This could be a good guideline for you:
  • $40,000 a year: $115,203
  • $60,000 a year: $272,299
  • $80,000 a year: $429,395
  • $100,000 a year: $586,491
  • $120,000 a year: $743,587

You Feel Certain About Your Financial Stability
If you find yourself saying “I think we can make this home work” then you may want to consider either waiting a year and continuing to save or looking for something smaller. There’s no harm in finding a smaller home that you can afford and saving up for the larger home when you’re ready. Buying a home can sometimes put a financial strain on your household, but with proper planning, you can reach your financial and real estate goals with ease.

Your Colorado Springs Real Estate
Whether you’re a first time home buyer, an expert real estate purchaser, or someone getting into investment, we can help. Our team is the compiled of the best real estate agents in Colorado Springs, and we would love to help you find just the right property. Not only do we want to help you find something that fits your budget, but also find a home that fits your style, location needs and more. Visit our website to learn more about our real estate services in Colorado Springs and give us a call to get started!

Mike MacGuire
Colorado Springs Real Estate Agent
The MacGuire Team
6760 Corporate Dr
Ste 300
Colorado Springs, CO 80919

719-536-4324 or 719-660-6793


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