Buying a house in Colorado Springs, CO
If a lifestyle amid Pikes Peak and the stunning natural beauty of Garden of the Gods sounds good to you, then think about planting roots in Colorado Springs. Often considered a little sibling to Denver, this city is all grown up: The population here grew by nearly 70 percent between 1992 and 2022, according to city data. No wonder it was named one of the best places to live in Colorado in Bankrate’s recent rankings. If you’re looking to be part of the continuing boom, read on to learn how to buy a house in Colorado Springs.
Deciding where to live in Colorado Springs
From a master-planned community like Woodmen Hills to vintage charm in the Old North End to more moderately-priced homes in Springs Ranch, you have loads of different options to consider here. And if you’re an elite-sports enthusiast, you’ve definitely come to the right place: Colorado Springs is the home base of the U.S. Olympic & Paralympic Committee and often called Olympic City USA, so thousands of athletes flock here to train.
No matter where you live in the metro area, though, it’s important to understand that the cost of living in Colorado can be high. With that in mind, be sure to focus on building a budget that will not stretch your finances too thin. After all, in such a beautiful part of the country you’ll want to be able to enjoy the lifestyle, too.
How to buy a house in Colorado Springs
Saving for a down payment in Colorado Springs
Redfin’s latest data shows that the median price tag for a home here is $450,000. A typical 20 percent down payment on a home of that price is a sizable chunk of money: $90,000. And while that amount will save you from having to pay for private mortgage insurance, you don’t necessarily need to put 20 percent down. If you qualify, you may be able to get a conventional loan for as little as 3 percent down, which comes to a much less daunting $13,500.
Get preapproved for a mortgage
The most important step in your homebuying process might also be one of the easiest: Getting preapproved for a mortgage can take as little as 15 minutes with some online applications. You’ll need to share a range of information about your finances, including your tax returns, pay stubs and bank account information. In return, a lender provides the dollar amount that you’ll likely be approved to borrow, which can help you budget accurately.
Find the right lender
Don’t just automatically move forward with the lender that issues your preapproval letter, though. Comparison shopping is the key to saving money with every purchase, including a home. Compare offers from at least three different Colorado mortgage lenders to see who can offer you the lowest rates and most appealing loan terms.
Find the best local real estate agent in Colorado Springs
Buying a home is not easy, and the best way to make the process easier is to work with an expert. A local real estate agent can help you navigate the entire Colorado housing market, including Colorado Springs. The typical home here receives an average of two offers and sells in a relatively quick 23 days, per Redfin — signals that you’ll need to be prepared to act fast and submit a compelling offer. An agent will have a good sense of the local market and help you avoid bumps in the road.
Start house hunting and make an offer
With an agent by your side and a preapproval letter in your pocket, you’re officially a “serious” homebuyer. Go into the house-hunting phase with an open mind: You’re probably not going to find a perfect property that checks every single box for you. Think about what you absolutely need (a backyard for your kids, for example) versus what you can do without for now. A basement can always be finished, or a kitchen upgraded, a few years down the road.
Once you find a home you love, your agent will help you craft an offer that catches the seller’s attention. Homes in Colorado Springs are selling for around their list price, and more than a third sell for even more, so let a pro’s expertise guide you.
Get a home inspection and appraisal
Once an offer gets accepted, most buyers will want to get a home inspection to make sure the house is structurally sound and has no issues that could become major problems later. This will cost you a few hundred extra bucks, but it’s well worth it: You don’t want to find out before the Colorado winter sets in that you need a new furnace or heating system, for example.
Your mortgage lender will also require a home appraisal, which is a professional estimate of the property’s value. This is to protect their interests: They need to know that if you default on the loan, they can sell it and recoup the majority of their losses.
Requirements to buy a house in Colorado Springs
Can I afford a house in Colorado Springs?
The median price of a home in Colorado Springs is $450,000, which is down 2.2 percent since last year. While that’s higher than the nationwide median of $410,200, it’s significantly cheaper than the $600,000 median price tag if you head north on I-25 to Denver.
Determining whether you can afford a home here relies on a number of different factors, including how much you earn each month; how much you’re paying for other debts, like student loans, car payments and credit cards; and how much you can afford to contribute to a down payment. Before you start building a budget for your home purchase, be sure to check your credit score. The higher it is, the lower a mortgage rate you’re likely to qualify for, which can save you thousands.
First-time homebuyers in Colorado Springs
If it’s your first time buying a home, government-sponsored down payment assistance can help make your dream more affordable. The state of Colorado offers programs that can make a meaningful difference, and so does El Paso County. For example, the Turnkey Plus Mortgage Program is available even to non-first-timers and offers up to 5 percent assistance to eligible buyers.
Closing day
The mountains may be high in Colorado, but luckily the closing costs are relatively low. According to data from Core Logic’s ClosingCorp, they typically add up to 0.7 percent of the home’s purchase price — on a median-priced $450,000 Colorado Springs home, that’s just $3,150.
You’ll have a firm idea of your final tab thanks to the closing disclosure that you will receive a few days prior to your official closing. Review it to make sure everything looks fairly similar to your initial loan estimate. Then, head to your closing to sign all the paperwork and hand over your cash. After a few hours, you’ll officially feel the Rocky Mountain High of being a Colorado Springs homeowner.
FAQs
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Yes, but not by very much. Redfin data shows that the median sale price of a home in Colorado Springs is $450,000 — a modest 2.2 percent drop versus the same time last year, but a drop nonetheless.
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It’s a fairly tough time to buy a house in Colorado Springs. Despite a slight year-over-year drop in the median sale price, it’s still higher than the nationwide median, and competition can be fierce. The typical home receives two offers and sells in just 23 days, according to Redfin data, and more than a third of homes sell for above their asking price.
