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Buying a House in Denver

Buying a House in Denver [2022] | 🏡 Should You, & How to with Tips & Steps for Denver

Are you thinking about moving to the gorgeous and breathtaking city of Denver? When you compare it to other states, Denver is one of the best cities to call home due to being close to the Rocky Mountains and being a family-friendly community. While the housing in Denver is 37% more expensive than the national average, it’s still much cheaper than in nearby states like California.

The population of Denver is 715,878, with the average age being 35 years old, and the median household income is $72,661 per year.

Denver is known for the outdoors, so you have everything to explore, from beautiful parks, lakes, forests, and the crowd favorite, the Rocky Mountains.

As we mentioned above, Denver is known for its outdoors, so here are some of the top places to visit in Denver: Meow Wolf Denver, Denver Zoo, Denver Museum of Nature & Science, Denver Botanical Gardens, Downtown Aquarium, and the Denver Art Museum.

Denver is known for being a semi-arid climate. The spring and summer months are hot. Then the fall and winter months are cold, snowy, and cloudy. If you’re looking for the best time to visit the great city, you’ll want to come between June and September. Don’t forget to bring your warm winter gear for the colder months and your sunscreen for the summer.

As you begin the house-hunting process, we understand that you might be feeling overwhelmed, especially if it’s your first time. It might feel intimidating, but by following this ultimate guide, you will be able to know everything about purchasing a house in Denver.

The Steps To Buying A House In Denver

When you decide to work with the top-rated real estate agent and the best loan officer, purchasing a house in Denver will be seamless. Here is a complete guide with the top recommendations to help ease your stress and give you peace of mind during this process.

How Much Can You Afford? How Much Does It Cost To Buy A House In Denver?

It can feel intimidating to purchase your first real estate property, but we promise that it’s not as difficult as it might seem. Buying a house is a commitment that requires proper planning and budgeting that matches what you can comfortably afford. It’s essential to note that your budget is more than looking at property taxes, homeowners insurance, and maintenance. It requires you to take into account other areas such as health care, food, gas and electricity, and combine the two to get the proper idea of how much you can afford to spend.

To help you get a better idea, you will want to utilize an affordability calculator. First, we’re going to break down an example. Let’s say you’re making the median household income of $81,630, and you currently have a monthly debt totaling $500 for your car and student loans.

  • Downpayment: Based on the home prices in Denver, if you did 20% then it would equate to around $105,000.
  • Debt-to-income ratio: 36%
  • Interest Rate: 6.95% for 30 years or 6.14% for 15 years
  • Loan Term: 30 years
  • Property Tax: 0.074618 or 74.618 mills for every $1 of assessed value
  • Home Insurance: Based on if your monthly homeowners insurance is $2,000 per year

Based on the information that we mentioned above, you can afford a house up to $379,372, which comes to a monthly payment of $1,949. Obviously, if you increase your down payment, have a higher household income, or don’t have any debt, that will increase the total amount you can afford.

You want to make sure that you don’t allow your debt-to-income ratio to get higher than 36%. Ideally, it’s recommended to keep it lower, and you don’t want more than 28% going towards the Principle, Interest, Taxes & Insurance (PITI). There is something called the 28/36 rule that you want to follow when budgeting. Basically, it means that your mortgage should not be more than 28% of your pre-tax income, and your total debt shouldn’t be more than 36% of your income.

On average, homeowners throughout the United States pay around $10,000 per year in unexpected expenses, so keep that in mind before purchasing a house. Here are some examples of unexpected costs that you need to add to your budget:

  • Closing Costs: Depending on the purchase price of the house, you can expect to pay around $6,740-$9,000.
  • Homeowner’s Insurance: Each company is different, and depending on the size of the home you bought, the average for homeowners insurance in Denver can range between $1,233 and $3,104
  • Utilities: The average utilities cost per month in Denver is $300
  • Property Taxes: In Denver, the property tax rate can change each year, but currently, the real estate tax rate is 74.618 mills for every $1 of assessed value. Check out an interactive map of Denver to search and learn more about how the property taxes work in the city.

The median home price in Denver is $550,000. On average, a house in Denver sells within 10 days of being put on the market. To help you narrow down where to consider purchasing a house, here are some of the best places on the market in Denver and their median home price:

  • City Park West: $450,000
  • Washington Park: $1,352,500
  • Capitol Hill: $345,000
  • Cheesman Park: $405,000
  • Highland: $925,000
  • Cherry Creek: $1,280,000
  • Harvey Park: $531,350

What Is Needed To Qualify For A Mortgage In Denver?

Before you begin looking for a home, you need to get pre-approved because it will help to increase your chances of your offer getting accepted by the seller. It’s also essential to do your own research and find a loan that will meet your needs and fit your lifestyle. The three most common forms of mortgage loans include: conventional (Freddie Mac or Frannie Mae), an adjustable-rate mortgage which means your payments can differ depending on the current interest rate, and a fixed-rate mortgage, where your monthly payments will stay the same throughout your entire mortgage loan.

In addition to the type of mortgage you receive and the interest rate, your credit score is a huge determining factor in which you need to get approved for a home mortgage. You need to have a minimum credit rate of 600, but the professionals highly recommend that you have a score in the 700+.

If you’re a Denver first-time home buyer, you should consider looking into a home buying assistance program because you might qualify. Here is the main homebuyer assistance option that is available throughout Denver and the state of Colorado.

CHFA Loan

The CHFA provides a down payment assistance grant which helps you with the last little bit of money for your first mortgage. Since it’s a grant, there is no need for you to repay any of the money given. They will give up to 3% of your first mortgage. For example, if you’re buying $550,000 and receive 3%, you’ll get $16,500 that will go towards your new home.

If you don’t get approved for the grant, you have an option for a downpayment loan. The main differences are that you’ll have to repay this money, and you can borrow up to 4% on your first mortgage.

Find A Denver Real Estate

Finding the best real estate agent for you might feel intimidating, especially if you don’t have any recommendations, but we promise, it’s easier than you might think. We highly recommend that you find a buyer’s agent because they will come alongside you and will be there every step of the way through the entire home-buying process.

Some of the main benefits of choosing a buyers agent are that they’re your representation through the process, help answer any of your questions, and make this time in your life seamless because there are more first-time home buyer mistakes than you think.

To help you narrow down your search, here are the best Denver real estate agents. You deserve to work the best-of-the-best, so make sure to check out this list.

Go Denver House Hunting

Finally! It’s time to start the fun part, house hunting in Denver. To start, we highly recommend that you create a list of three categories: must-haves, nice-to-haves, and optional features. By doing this, you can quickly create a list of homes to check out, rather than wasting time touring houses that don’t meet your requirements.

Some of the best suburbs in Denver where people are looking to purchase a house and plant their roots include:

  • Centennial | Family-Friendly Community: $620,000
  • Littleton | Historical Homes: $625,000
  • Highlands Ranch | Perfect For Nature Lovers: $686,000
  • Lakewood | Affordable Homes: $520,000
  • Wheat Ridge | Strong Community Vibes: $630,500
  • Holly Hills | Family-Friendly: $675,000
  • Park Hill | Cultural Attractions: $729,000

Of course, there are plenty of other suburbs and neighborhoods in Denver, so if the examples above don’t meet your needs, don’t give up. In addition to writing a list of things you want in a house, make sure to include some of the community aspects you’d like. For example, the area is safe and family-friendly, has good schools, restaurants, and bars, and has a low crime rate.

Submit An Offer!

Congratulations, you found your dream home! The first step you’ll be doing is putting an offer on the home is something your agent will help you with–coming up with strategies that will make you stand out compared to the other individuals is their specialty. Based on the current market and comparable sales, your agent can also help you decide on an offer price.

Now, don’t be caught off guard if the seller comes back with a counteroffer requesting a higher price or fewer contingencies. If everything goes as planned and the seller accepts your offer, you will receive a purchase agreement. Once both sides sign this agreement, it will be time to go under contract.

Before the final day of escrow occurs, you need to get an inspection and an appraisal done on the house so that if something didn’t get disclosed, you have the opportunity to back out of the offer.

After these steps get completed, both sides decide to move forward with the deal, it’s time to finalize your mortgage!

Close On your New Denver Home!

The final countdown to getting your keys is beginning. Once your offer is approved, you’ll be waiting to hear from the lender for the final approval. The process can take between 60 to 90 days between signing the offer and the closing date. As we mentioned, you need to get an inspection and an appraisal before it can be final.

Once the process is complete, you will need to meet with your real estate agent to sign the final documents, transfer the ownership agreement and funds, and officially get the keys to your new home.

Congratulations on owning your new home! Now, it’s time to move your belongings into your gorgeous new place! Wasatch Moving is the best-of-the-best. Our team of professional, hardworking, dedicated, and trustworthy team of crew members will make this process seamless! Call us at (801) 683-2346 to receive a free estimate!

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