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If you are considering moving to Boulder’s city, you more than likely want to find the best housing situation for your needs and budget. In this article, we will discuss the pros and cons of renting versus purchasing a home in Boulder, CO.
Boulder, Colorado, is one of the hottest housing markets in the country. As a result, both home prices and rental rates are a little pricey. However, the higher rental rates in home prices do not detract from how amazing life is in this city. Thus, for many people, living here is worth the price. That said, if you have been considering moving to Boulder, Colorado, you may be asking yourself, is it better to buy than rent here? Well, the good news is that the answer is fairly straightforward—it is absolutely better to buy than rent for several reasons.
You should consider purchasing a home in Boulder if you have a down payment saved up, plan to stay a few years, and are in a strong market where rentals are desirable (like Boulder). So, if this sounds more like your situation, then buying might be the smarter financial decision. We’ve compiled a list of pros and cons, nonetheless, so you can make an informed decision that is right for you and your family.
There are several advantages to buying a home in Boulder, CO. For instance, with a home purchase, you are building equity over time. In fact, this is one of the major differences between owning and renting a home. Each mortgage payment towards your home loan helps build your equity in your home. Yet another pro to homeownership here is the available tax benefits. In general, homeownership definitely provides some serious benefits come tax season. For instance, homeowners can deduct mortgage interest, property tax payments, and certain expenses from their income tax. People also enjoy having the freedom to design or decorate their homes as they see fit when they purchase a home. When you own your home, you do not need to ask anyone’s permission to decorate the way you want or make the upgrades
That said, there are obviously more initial or upfront costs associated with buying a Boulder home. There is actually no getting around coming up with earnest money, a sizable down payment, funds for appraisal/inspection fees, property taxes, insurance, closing costs, and loan payments. In addition to these upfront costs, you will also need to have money in the bank for utilities and monthly expenses. Plus, you will have to set aside some money for home maintenance and upkeep (generally 1% of your home’s value annually), furnishing, repairs, and renovations.
Alternatively, renting a home in boulder might be a better option for someone who is not ready for the responsibilities of homeownership and is looking for predictable expenses. As a renter, you can plan for rent expenses based on your lease terms, and most unforeseeable repairs are the landlord’s responsibility. There is also more flexibility involved. When you opt to rent a home, you can decide to move without having to worry about selling first and relocate easily if you don’t like your location or neighbors.
What’s more, renting tends to come with less risk; since you do not own the home, you do not have to deal with the risks associated with the real estate market. Finally, often qualifying for credit is not a problem when you decide to rent, and you don’t have to worry about qualifying for a home loan or going through the entire home buying process.
However, when you choose to rent, you still have a few hefty upfront costs such as security deposit, first month’s rent, and any applicable deposits. Usually, there are also a few monthly expenses like utilities or internet to worry about (depending on the terms of your lease). In addition to this, renting means you are okay with spending thousands of dollars a month with no possible return or rather home equity, no tax breaks, and you have to deal with a landlord, as well as his or her rules.
If you are wondering if you are actually ready to transition from renter to homeowner, you are not alone. The good news is as a first-time in Boulder, you have access to a variety of first-time buyers and down payment assistance programs. Moreover, mortgage rates are at an all-time low. Thus, if you are gainfully employed, have a stable job, and are financially strong (no credit card debt, a padded savings account, and control on impulse purchases), then that is half the battle right there.
If you happened to have enough money saved up for a down payment (saved 20% of the home cost), then now may be a good time to take the plunge. If not, you might want to stash some more cash away before you purchase. Likewise, if your credit score is low or you have some serious debt to pay down, then you will need to improve your score and overall financial situation before applying for a mortgage.
Most people make the shift from renter to homeowner when their careers and income build and they start families. Though this is very much still the case, in these uncertain times, the real driving force for many people these days is the need for more space since remote work and homeschooling have taken over their home lives.
Furthermore, despite the current shortage inventory, analysts predict that more homes are likely to become available across the country, thanks to the increase in new home construction now. New inventory ultimately means more options to choose from. Plus, at the moment, the housing market in Boulder, CO, is balanced, and home prices are trending down, which is good news for buyers. So, if you are ready to enjoy the benefits of homeownership, then start gearing up to purchase a home in Boulder, Colorado.
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire Colorado state, including Boulder, and its many amazing neighborhoods like Whittier, Mapleton Hill, Foothills, and Longmont. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.
As the economy continues to rebound, mortgage rates remain steady while home prices and sales rise.
Are you looking to move up? What if you have limited equity to work with? Read on to find out if moving up in this case is possible.