If you’ve been thinking about buying a home in Colorado Springs or El Paso County, you may have looked at today’s mortgage rates and thought:

“Maybe I can’t afford to buy anymore.”

And I understand why.

When many buyers remember seeing mortgage rates in the 2s, 3s and 4s, today’s rates around the 7% range can feel like a completely different housing market.

You may be wondering:

Should I wait?

Should I lower my price range?

Should I keep renting?

Have I been priced out of the Colorado Springs housing market?

Before you make that decision, I want you to know something:

The interest rate is only one part of the equation.

There are strategies available to today’s Colorado Springs home buyers that weren’t necessarily as important when homes were flying off the market and buyers were competing with multiple offers.

Those strategies include:

• Builder incentives
• Mortgage rate buy downs
• Seller concessions
• Assumable VA loans
• Assumable FHA loans
• Assumable USDA loans
• Negotiating the purchase price
• Comparing new construction with resale homes
• Structuring the financing around your actual monthly-payment goals

And this is where having a real estate agent who understands more than just the list price can make a difference.

First, Let’s Talk About Mortgage Rates

Mortgage rates have moved significantly over the last several years. For buyers who purchased or refinanced when rates were exceptionally low, today’s rates can seem shocking. But waiting for mortgage rates to return to a specific number is a gamble. No one can reliably tell you exactly where rates will be six months, one year or three years from now. Rates could move higher. They could move lower. They could remain around current levels for an extended period. Historically, these rates are average. Instead of trying to perfectly predict the mortgage market, I encourage my buyers to ask a different question:

“If I want to buy a home today, what options are available to make the numbers work?”

That’s a much more actionable question.

Have You Really Been Priced Out?

Maybe.

But maybe not.

And that’s something worth calculating before you automatically decide that homeownership is out of reach.

Your actual affordability depends on much more than the interest rate.

Your:

• Purchase price
• Down payment
• Loan program
• Credit profile
• Property taxes
• Homeowners insurance
• HOA dues
• Interest rate
• Seller concessions
• Builder incentives
• Rate buy down
• Closing costs
• Existing debt
• And desired monthly payment

all contribute to the picture.

That’s why I don’t want my buyers looking only at:

“What’s the rate?”

I want us to look at:

“What’s my total monthly payment, what am I bringing to closing, and what opportunities exist to improve those numbers?”

Colorado Springs New Construction May Have a Financing Advantage

If you’ve been searching for new construction homes in Colorado Springs, you may have noticed builders advertising some pretty significant incentives.

Depending on the builder, community, home and financing program, incentives may include:

• Below-market promotional interest rates

• Temporary rate buydowns

• Permanent rate reductions

• Closing-cost assistance

• Design-center incentives

• Upgrades

• Lot incentives

• Price reductions

This is important because a builder may have tools available that an individual resale seller doesn’t. For example, a builder may be willing to spend money to help reduce a buyer’s financing costs because the builder has an inventory goal, a sales deadline or specific financing promotion.

But there’s another reason I encourage buyers to have their own representation when purchasing new construction.

When You Buy New Construction, Who Is in Your Corner?

When you walk into a builder’s sales office, you’re dealing with professionals whose job is to sell the builder’s homes. That isn’t necessarily a bad thing. It’s simply important to understand the roles. The builder’s sales representative represents the builder. The builder’s preferred lender works within the builder’s financing program. The builder’s construction team builds the home. The builder’s preferred processes and vendors are designed around the builder’s business.

You should have someone representing your side of the transaction, too.

When you partner with me, I can help you evaluate the transaction from the buyer’s perspective.

That can mean helping you:

• Compare builder financing with outside financing
• Understand the builder’s incentives
• Evaluate rate buy down options
• Compare the incentive against a potential price reduction
• Understand contract deadlines
• Navigate the inspection process
• Recommend questions to ask during construction
• Coordinate with your lender
• Help you evaluate the overall purchase
• Negotiate where negotiation is available
• Keep your goals at the center of the conversation

And here’s something I want buyers to understand:

Having your own buyer’s agent doesn’t necessarily mean you’re paying more for the home.

The way buyer-agent compensation is handled varies by builder and transaction, so you should understand the specific arrangement before moving forward.

But the larger point is this:

The builder has someone in its corner. Why shouldn’t you?

You are making one of the largest financial purchases of your life. I believe you deserve someone whose job is to help you understand the transaction from your perspective.

And Don’t Assume a New Home Doesn’t Need an Inspection

Another misconception I hear is:

“It’s a brand-new home. Why would I need an inspection?”

New construction can absolutely have items that need attention. A home can be brand new and still have construction defects, incomplete work, installation issues or items that simply warrant another professional set of eyes. That’s why I encourage my buyers to understand their inspection rights and consider independent inspections where appropriate. The builder has a responsibility to construct the home according to the contract and applicable requirements. An independent inspector evaluates the property for you. Those are two different roles.

The Hidden Opportunity in Colorado Springs: Assumable Mortgages

Now let’s talk about one of the strategies I think Colorado Springs home buyers should know more about.

Assumable mortgages.

Certain VA, FHA and USDA loans can potentially be assumed by a qualified buyer, subject to the specific loan, servicer and applicable requirements.

Why is this interesting?

Because there are homeowners in El Paso County, Colorado who have mortgages with interest rates substantially lower than today’s market rates.

Imagine finding a home where the seller has: $450,000 remaining on their mortgage with a much lower interest rate than a new mortgage today. If that mortgage is assumable and you qualify, you may be able to take over that existing loan rather than obtaining a new mortgage for the entire purchase price. But there is an important piece of the puzzle. If the home is selling for $600,000 and the existing mortgage balance is $450,000, there is a: $150,000 assumption gap. That difference has to be addressed. And that’s where things get interesting.

My Experience with VA Loan Assumptions

This is not simply a strategy I read about online. I’ve had the opportunity to work with lenders on a unique VA loan assumption where the buyer did not have the eligibility normally associated with assuming the seller’s VA loan. Because of the specific circumstances of that transaction, the seller was willing to allow a portion of their VA entitlement to remain associated with the loan. That situation required communication and coordination with lending professionals to determine whether the structure could work.

Was that something every buyer could do?

No. And that’s an important distinction. VA loan assumptions have specific requirements, and every situation needs to be evaluated individually by the appropriate lender and loan servicer. But the experience taught me something valuable:

Sometimes the answer isn’t obvious until you ask the right questions.

Rather than immediately dismissing an opportunity because the financing situation was unusual, we worked with the appropriate professionals to explore whether there was a solution. That’s the type of problem-solving I want to bring to my clients. I don’t replace your lender. I don’t replace your title company, inspector or other professionals.

I partner with them.

My role is to help identify opportunities, ask questions, coordinate the moving pieces and help you navigate the real estate side of the transaction.

Why Assumable VA Loans Can Be Particularly Interesting in Colorado Springs

With the size of the military community in the Colorado Springs and El Paso County area, VA financing is an important part of our local real estate market. That also means there are homes with existing VA loans that may be worth investigating for buyers.

When you see:

“VA assumable”

on a Colorado Springs home for sale, don’t stop at the interest rate.

There are several questions to ask:

• What is the current loan balance?
• What is the existing interest rate?
• What is the current principal and interest payment?
• What is the purchase price?
• How large is the assumption gap?
• Does the buyer qualify?
• Who services the loan?
• What is the expected assumption timeline?
• What happens to the seller’s VA entitlement?
• Will the seller receive a release of liability?
• Can secondary financing be used?
• How much cash will the buyer need to bring to closing?

That’s a very different way of shopping for a home.

You’re no longer simply shopping for a house and a mortgage.

You’re looking for a financial opportunity.

What About a Rate Buy down?

Another strategy worth discussing with your lender is a mortgage rate buy down. A seller or builder may sometimes offer concessions that can be applied toward allowable closing costs or a rate buy down, depending on the loan program and transaction. For example, instead of negotiating exclusively for a lower purchase price, a buyer might negotiate for a seller concession that helps reduce the interest rate. The right choice depends on your circumstances. Sometimes the lower price is more beneficial. Sometimes the concession is more beneficial. Sometimes a combination makes sense.

The important thing is to run the numbers.

That’s where your lender and real estate agent can work together.

So… Have You Been Priced Out?

Maybe the answer is yes.

But don’t make that decision based solely on seeing a 7% mortgage rate.

Before you decide you can’t afford a home, let’s look at the actual numbers. Maybe you qualify for a builder’s promotional financing. Maybe a seller is willing to offer a concession. Maybe a rate buy down changes the monthly payment enough to make a particular home work. Maybe there is an assumable VA loan in Colorado Springs with a substantially lower existing interest rate. Maybe a different price point is the better fit. Or maybe buying right now genuinely doesn’t make sense for you.

All of those are valid possibilities.

My job isn’t to convince you that you need to buy a home.

My job is to help you understand your options.

Let’s Stop Shopping for Interest Rates and Start Shopping for Opportunities

If you’re searching for:

Colorado Springs homes for sale

El Paso County homes for sale

Colorado Springs new construction

Monument homes for sale

Black Forest homes for sale

Falcon Colorado real estate

Tri-Lakes homes

VA homes for sale

assumable VA loans

FHA assumable mortgages

homes with seller concessions

or homes with builder incentives…

I’d love to help you look at the entire financial picture.

Because today’s market isn’t necessarily about finding the lowest mortgage rate.

It’s about knowing what tools are available and knowing how to use them.

I’ll work alongside your lender to explore financing strategies, help you identify opportunities in the Colorado Springs and El Paso County market, and advocate for your interests throughout the purchase.

You may not be priced out.

You may just need a different strategy.

Let’s find out.

Give me a call! 719.233.5993