Most people get the jitters when they buy big-ticket items. With homes appreciating rapidly in the Colorado real estate market, it takes a strong financial budget to make the move. Fortunately, most real estate experts point out real estate will likely stay strong for many more years to come. Financial planning often reduces anxiety for individuals and couples intent on purchasing a home. According to an article by The Seattle Times, a calculator is an important tool in the house hunt. Making sure you don't have to stretch too far to afford a home is of paramount importance. Getting serious about your finances entails designing a realistic budget, checking credit scores and saving money.

Visiting a reputable lender

A mortgage lender will walk you through the different finance options. Most experts advise people to avoid the zero down loans. At the same time, it's a misconception to think you have to come up with a large down payment to buy a home. If you want a more affordable mortgage payment, strive to put down at least 20 percent. A study by NeighborWorks showed the average down payment is 17 percent. Even if you don't quite make the 20 percent down goal, most lenders remove the PMI or private mortgage insurance payment after you pay your home down or if you enjoy rapid home appreciation. When you see your lender, bring as many documents including pay records and taxes. To qualify for most loan programs, you need at least a 620 credit score. But boasting a credit score of 740 or higher means lower interest rates.

Finding your comfort level

The total cost of a home includes purchase price and closing costs. But it's the monthly mortgage payment that affects your day-to-day life. A lender wants to see a debt-to-income ratio of 50 percent or less. If possible pay off car loans and credit card bills before applying for a mortgage. Again, a higher down payment means a lower monthly mortgage bill. Most first-time buyers receive financial assistance from family members. But if you aren't fortunate enough to receive parental payments, consider selling some of your clothes, collections or even cars. To find out about down payment help, check out DownPaymentResource.com.

Retirement investing is another major component of overall financial planning. But owning a home rather than renting translates into greater wealth once retired, according to financial experts. If you are young and have money in a Roth IRA, consider tapping it to buy a home. Depending on your situation, a 401(k) loan is better than a taxable distribution from a retirement account. Take a deep breath before making any major financial moves. Having your finances in order makes buying a home a breeze. At Team Lassen, we help aspiring home owners in Colorado find incredible homes to start a family or retire in style. For more tips about financial planning to own a home or information about the Colorado real estate market, please contact us.