It is no secret that purchasing a home for the first time or opting to buy a new home is one of the largest decisions a person or family can make.
The people of Denver remain cautious about it, given the rising interest rates and general affordability.
Knowing what you can and cannot afford is crucial when buying property. This will allow you to make the purchase with knowledge and confidence.
Having a guide to these issues can help to steer through the journey properly and come out on the other side with that dream home!
Navigating Mortgage Rates in the Mile High City
Denver has a truly dynamic real estate market and so many options in terms of neighborhoods and surrounding suburbs to choose from.
However, all of these options leave the potential buyer with many questions.
Interest rates fluctuate, general pricing can change from region to region, transportation and schooling choices may be a concern, etc.
Finding the right place is accompanied with keeping things within your budget and staying on track for a valuable investment to eventually move on to things that are bigger and better.
Before you start to worry about all of the details it is essential to take a deeper look into the cost of a home in today’s market.
Evaluate All of Your Options
Don’t get discouraged if you begin the search and don’t immediately see something to your liking because there are apartments, condos, and houses that meet the needs of almost any family across the Denver metro area.
Taking the time to lay out all of the options that are available to you can take time and it is important to take that time to unveil the perfect place for yourself and your family.
Getting started with the process of purchasing a home means knowing the following:
- Understanding your mortgage rates and how they can work to your advantage or disadvantage.
- Current mortgage rate trends and how that may affect the buying process.
- How to secure the best mortgage rates with your financial profile.
- Market ebbs and flows.
Contemplating Condos or Apartments?
The Mile High City is well known for its modern high-rises and contemporary condos throughout the city.
These are a great option for buyers looking for convenience, amenities, and relatively lower price points.
Most of the apartments or condos for sale are going to offer more affordable options compared to a traditional single family home.
If you are really focused on your budget this is a great place to get started when looking for property to purchase in the Denver area.
What to Expect with $250k-$350k Housing Options
Anyone in Denver will tell you that it has become increasingly difficult to find anything to buy under $450k, but this is not true when it comes to alternate modes of living.
Apartments and condominiums are still a fabulous option for first-time buyers or someone hoping to purchase for rental opportunities. For these kinds of smaller properties you will typically find anything between 2 to 3 bedrooms and 2 to 2.5 baths.
While places like these can be located throughout the metro area, they are easiest to locate in suburban areas like Aurora, Lakewood, and even Arvada.
Let’s dive into what the monthly mortgage payment will look like!
30-Year Mortgage for Housing Between $250k-$350k
- With a 20% down payment on a house up to $350k, the monthly mortgage payment will be around $1,850 a month.
- With a 15% down payment on the same property, the monthly mortgage payment would be about $1,970 a month.
15-Year Mortgage Payment Options
- With a 20% down payment, the monthly cost of your mortgage would be approximately $2,500.
- A 15% down payment comes in with monthly payments that are slightly higher at around $2,670.
Traditional Home Options in Denver, CO
While condos and apartments have become increasingly popular due to their low prices, single-family home options offer an array of benefits.
They are often seen as providing additional privacy and long-term investment opportunities.
Denver offers a fabulous array of neighborhood options, although the pricing greatly varies depending on the area of town you are looking to live in.
There are growing suburbs around the community offering modern housing options and historic places throughout the city.
Families can locate these beauties all across the city from the suburbs of Littleton or closer to downtown off South Broadway.
Taking a Closer Look at Homes Between $450k-$900k
Finding a place and getting your mortgage straight is the most important aspect of the moving process.
Homes priced within the range of $450,000 and $900,000 is the common starting place but families can set their cap accordingly. This range sets a sweet spot in the housing market for quality homes.
Here are the options for mortgage rates for houses between $450k and $900k:
Houses at $450k to $550k
- With a down payment of 20%, you can expect the mortgage payment to be anywhere between $3,200 to $4,000 a month for a 30 year loan. This total increases at $3,200 to $3,900 at 15 years.
- A 15% down payment will result in payments of anywhere from $3,400 to $4,200 for 30 year loan term.
Houses at $600k to $700k
- When making a 20% down payment, the average mortgage rates are somewhere between $4,200 and $5,100 with 30 year loan. At a 15 year term the range is similar.
- With a 15% down payment on the home, mortgage costs start at around $4,500 and can extend up to around $5,350.
Houses at $750k to $900k
- Mortgages in this price range will start around $5,600 to $6,500 when there is at least a 20% down payment over 30 years. These rates are similar to those of a 15-year loan.
- 15% down payments on these houses begin at about $5,700 to $6,900 a month.
Houses at $950k-$1.5m
Those thinking of settling into a new place may not be seeking the higher price points, but as we move up, the sale of options homes between $950,000 and $1.5 million provides a really unique set of luxuries for buyers.
These properties can be found in the most sought-after locations, with tons of space and premium features.
Things usually get more competitive at this level of real estate as it caters to those who are usually upgrading their current location or relocating to find more desirable neighborhoods.
Buyers will find anything from historic homes near Cheesman Park with comfortable finished basements to modern townhomes in LoDo.
Mortgage Expectations for Homes Between $950k and $1.5m
- With a 20% down payment on one of these houses the mortgage rates begin at about $6,800 and can get up to $10,800 a month on a 30 year term.
- 15% down on a new home between $950k and $1.5m will cost anywhere between $7,200 to $11,500.
Keep in mind that all of these rates are dependent upon the qualifications of the buyer and do not include additional costs and fees that come with purchasing a home like insurance and property taxes.
The all-encompassing cost of buying a house is essential to determine before the big purchase, as there are many other fees to consider.
Cost-Effective Tips for Potential Homeowners
Mortgage rates are dependent on current interest rates, the length of the mortgage, credit history, and other factors and will differ from person to person.
Creating strategies to better navigate the upcoming costs of owning a home will help to relieve unnecessary financial stress.
Before you start calling local professional moving services for move-in day, learn from these tips and tricks to develop the best path to a new home in Denver, Colorado.
How can I shorten my mortgage payments?
Entering into mortgage payments, whether for the first time or the third, it can feel like those payments will go on forever, but there are ways to shorten the journey.
Shortening the term of the loan will not only help you own sooner but also bring additional financial benefits.
You can effectively avoid the total interest costs and financial freedom.
To get there, you will need to put in some work:
- Making additional payments towards the principal is one of the easiest ways to work off the balance quickly. This can be done by making biweekly payments instead of monthly payments, completing extra lump sum payments when capable, which helps to reduce the length of the loan terms, or rounding up your payments and attempting to pay more on the months that you have additional cash available.
- Refinancing the mortgage is also an option available, and many choose to shorten a 30-year loan to a 15-year one when applicable. This can also help to provide lower interest rates, overweighing the costs over time.
- Eliminating the mortgage insurance is another possibility once the equity is over 20%. This will free up extra funds that will go directly towards paying the entire mortgage off.
- Create a mortgage repayment strategy and stick to this. No matter how you are planning or budgeting, develop a strategy and stick with that to avoid being rolled down a debt avalanche throughout repayment.
How can I find affordable home insurance options?
The average cost of home insurance for Colorodans is currently between $2,300 and $3,850 which comes to around $300+ a month for the protection of the property.
While having reliable homeowners insurance is a necessity for the new place, it is a good way to save money on monthly bills.
- Start by comparing insurance rates from different companies. There are online tools readily available for comparison, and third parties can do the work and bring back all the information for you!
- Bundle up your policies, as there are plenty of insurance agencies that put auto, life, and home insurance all in one policy to save up to 25% on costs. You can check with the current insurer or consider a new company entirely if the savings speak to you.
- Check into any discounts available for home security systems, a previously claim-free history, loyalty programs, non-smokers, veterans, etc.
- Review what is necessary for the insurance policy before signing off. This can be as simple as choosing between basic and comprehensive coverage or high-risk scenarios for flooding, natural disasters, and fires.
How will property tax impact my home purchase in Denver, CO?
Property taxes are relatively lower than the rest of the country, but in Denver, they are slightly higher than the rest of the Centennial state at .62%.
These rates differ according to county, so if you have taken interest in a neighboring suburb, that percentage will fluctuate.
That percentage is based on the assessed value of the house.
This greatly impacts payments due for the home each month and must be incorporated into the budget when trying to determine what you can or cannot afford.
Generally, larger and more expensive homes will end up with higher property taxes, impacting what is most cost-effective for the household.
Some homeowners can qualify for exceptions and benefits to help relieve the burden, so be sure to check into the following:
- Senior Tax Exemptions are available for anyone over the age of 65. This can help reduce the value of the home by up to 50% with certain restrictions.
- Disabled veterans qualify for property tax exemptions in Denver to help lower the overall tax liability.
- Tax deductions can be sought out on federal tax return filings to provide additional relief during the tax season!
What is the golden rule associated with a home mortgage?
There isn’t necessarily one golden rule associated with home mortgages, but there are some things to keep in mind when purchasing a new house in Denver.
The “golden rule” puts emphasis on the importance of ensuring that monthly mortgage payments stay within budget for long-term financial stability and security.
Aspects of the golden rule are as follows:
- Do not try to overextend yourself. When a lender is willingly offering a large loan, it does not mean that you should immediately take it. Make sure that the mortgage payment, extended interest, property taxes, and insurance will fit into the budget comfortably. Most will not extend those costs over 30% of their gross income each month.
- Factor in all the potential costs associated with the property, whether there are remodeling plans in place, upgrades that need to be made, security systems, general maintenance, HOA fees, etc.
- Don’t rule out other financial priorities. From car payments to child care, there are tons of regular expenses and unexpected ones that may arise, which should be taken into full consideration before accepting a loan.
- Be cautious when attempting to leverage the home’s equity. Homeowners can, at times, tap into equity for things like renovations and consolidating debt, and while this can be very beneficial, sometimes it can be detrimental to others. Never take on more debt than it is worth or so much that it is trying to repay.
When You Are Ready to Move, Contact Local Relocation Specialists
Buying a new home is one of the most joyous milestones, but the road to getting there requires a sturdy foundation and much forethought.
Denver is a beautiful, diverse city supplying residents with a tremendous quality of life.
When the day comes to move into that new place, trust in the experts and local Denver movers for help with the logistics of packing, coordinating, and delivering all of your most prized possessions!
Eden’s Moving Services is a family-owned company that is dedicated to making settling in simple.
Our relocation specialists and movers are intimately familiar with the city’s neighborhoods and put in the hard work to keep everything entirely stress-free for you.
No matter the reason for moving, make the process smooth and start enjoying all the benefits of that new home!
