BUYING LAND IN COLORADO
Looking for land in the the Denver - Colorado Springs area? This may be your lucky day because you would have a lot (no pun intended) to choose from! Just realize that financing is not so abundant. In talking with a local mortgage company, I discovered that typically financing would only be about half of he appraised value of the land. Also, the interest rate on Colorado land would be a tad higher as well.
Some potential Buyers are thinking that maybe the modular home could be the least expensive housing. If you are planning on buying a brand new modular home or the typical stick built home, it might require less cash if you combine purchase of both the land and the home at the same time. However, realize that the companies who will finance this have their own restrictions. These restrictions might include size such as a minimum one acre, electricity in place, pavement on the street plus a host of other items. Also realize that lenders may require that the land cannot cost more than 40% of the total appraised value of the land and home combined. Caution: financing of pre-owned modular homes has been challenging.
There is also a second home financing which generally costs around 10% to 20% down with traditional financing. The IRS requires the owner live in the home for at least 14 days out of the year. I am sure many who own a second home rent the home out while they do not occupy it. However, don't expect to count that rent while trying to obtain financing that home. Plus, remember that the debt ratio to income should normally not be more than 40%, which will include the cost of financing that second home.
This is a good time to buy land in Colorado but be sure and talk to your CPA, Lender and Realtor before you invest in land.
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