Guide to Buying Your First Home in Colombia

Buying your first home: where to start

Buying a home for the first time can feel overwhelming. There are unfamiliar terms, paperwork you’ve never done, and decisions that seem irreversible. But with clear information and good guidance, the process is simpler than it appears.

This guide takes you step by step from zero to the keys of your new home.

Assess if you’re ready

Before house hunting, ask yourself these questions:

Do I have stable income? You don’t need formal employment — freelancers also qualify for credit, but you need to demonstrate stable income for at least 12 months.
Is my credit history healthy? Check your report at DataCrédito or TransUnion. Scores above 700 get better conditions.
Do I have any savings? Even a small amount — you need at least the reservation fee ($1M-$5M COP / $250-$1,250 USD). The rest of the down payment can be paid in installments.
How much can I pay monthly? The 30% rule is key: your payment should not exceed 30% of your household income.

Define what you need vs. what you want

It’s easy to fall in love with a home that doesn’t fit your reality. Separate your needs from your wants:

Needs (non-negotiable)

Minimum bedrooms for your current family
Proximity to work or children’s school
Realistic maximum budget
Neighborhood safety

Wants (nice to have)

Specific common areas (pool, gym)
Premium finishes
Panoramic views
Double parking

New vs. pre-owned housing

For first-time buyers, new construction has clear advantages:

Factor	New Construction	Pre-owned
Subsidies	Yes (Mi Casa Ya, funds)	No
Down payment	Paid in installments during construction	Paid in full at closing
Renovation costs	None	Potentially high
Structural warranty	10 years by law	Not applicable
Finishes	Modern, efficient	May need updating
Appreciation	Higher in early years	Variable

The step-by-step process

1. Calculate your purchasing capacity

Simple formula:

Monthly household income × 0.30 = maximum monthly payment
Use bank simulators to calculate the maximum credit for that payment

Example:

Household income: $4,000,000 COP/month (~$1,000 USD)
Maximum payment: $1,200,000 COP/month
20-year credit (~12% rate): ~$130,000,000 COP
With Mi Casa Ya subsidy: homes up to ~$170,000,000 COP

2. Research subsidies

Check if you qualify for:

Mi Casa Ya (national government)
Compensation fund subsidy
FNA voluntary savings
Special benefits for youth, single mothers, or veterans

3. Get bank pre-approval

Visit your bank (or multiple banks) with your documents and request pre-approval. This tells you exactly how much they’ll lend and at what rate. Do this before falling in love with a project.

4. Visit projects

With your budget clear, visit projects that fit. Ask about:

Estimated delivery date
Valid construction permit
Down payment plan
Included common areas
Builder’s track record and delivered projects

5. Reserve your home

The reservation fee is a purchase commitment. Make sure to:

Read the purchase agreement before signing
Verify that price, area, and finishes are specified
Understand withdrawal conditions
Keep all receipts and signed documents

6. Pay the down payment

You generally pay in monthly installments during construction. Some builders offer flexible plans. At PCG, we help you structure a plan that fits your cash flow.

7. Disbursement and title transfer

When the project is ready for delivery:

The bank appraises the property
Final documents are submitted
The bank disburses the credit
You sign the public deed at the notary
The property is registered in your name

Mistakes to avoid

Not comparing banks

Each bank has different rates, insurance, and commissions. Comparing 3 banks can save you $10-20 million COP in interest over the life of the credit.

Ignoring closing costs

The property price isn’t everything. Budget an additional 3-4% for title transfer, registration, and notary fees.

Not verifying the builder

Research the builder’s track record. How many projects have they delivered? On time? With the promised quality? Ask for references from previous buyers.

Buying without visiting

Never buy a home without visiting it in person. Photos and renders can be misleading. Visit the site, explore the neighborhood, talk to neighbors.

Not reading the purchase agreement

This is a legally binding contract. If you don’t understand it, have a lawyer review it. It’s a small investment compared to the risk.

First-time buyer checklist

Ready to take the first step?

At PCG Constructora, we’ve guided over 2,000 families through their first home purchase. Explore our projects or contact an advisor to get started.