Financial Planning for Buying a Home in Denver

Embark on your home buying journey in Denver with confidence. This guide sheds light on key financial aspects, from understanding property prices to securing the best mortgage deals.
financial planning for home buying in denver

Denver, the Mile-High City, is known for its stunning mountain views, vibrant culture, and booming real estate market. If you’re considering buying a home in Denver, it’s essential to understand the financial aspects of the process. This guide will walk you through key financial considerations, from understanding Denver home prices to securing the best mortgage deals.

Don’t wait to buy real estate, buy real estate and wait.

Will Rogers

Understanding Denver Home Prices

Denver’s real estate market is competitive, with homes receiving multiple offers and selling quickly. According to Redfin, the median sale price of a home in Denver was $570K last month, marking a 1.3% increase from the previous year. The price per square foot stands at $377, which has seen a 1.3% decrease since last year.

In August 2023, Denver home prices rose by 1.3% compared to the previous year, with homes selling after an average of 16 days on the market. This is a slight increase from the 12-day average of the previous year. The data also indicates that there were 962 homes sold in August, a decrease from the 1,071 homes sold the previous year.

Denver Mortgage Tips

  1. Start by assessing your financial situation: Before applying for a mortgage in Denver, it’s important to evaluate your financial health. Calculate your monthly income, expenses, and debts to determine how much you can afford to borrow. This will help you set a realistic budget for your home purchase and ensure you don’t overextend yourself financially.
  2. Research different mortgage options: Denver offers a variety of mortgage options, so it’s crucial to explore and compare them. Look into fixed-rate mortgages, adjustable-rate mortgages, FHA loans, and other programs available in the area. Each option has its own advantages and considerations, so take the time to understand the terms, interest rates, and requirements associated with each type of mortgage.
  3. Improve your credit score: A good credit score can significantly impact your mortgage eligibility and interest rates. Take steps to improve your credit score before applying for a mortgage in Denver. Pay your bills on time, reduce your debt-to-income ratio, and review your credit report for any errors that need to be corrected. A higher credit score can help you secure a better mortgage deal.
  4. Save for a down payment: Saving for a down payment is an essential part of the homebuying process. In Denver, the typical down payment ranges from 3% to 20% of the home’s purchase price. Determine how much you need to save based on your desired home price and start setting aside funds. Consider automating your savings or cutting back on expenses to accelerate your down payment savings.
  5. Get pre-approved for a mortgage: Before house hunting in Denver, it’s beneficial to get pre-approved for a mortgage. This involves submitting your financial documents to a lender who will assess your creditworthiness and provide you with a pre-approval letter stating the loan amount you qualify for. Having a pre-approval letter in hand can make you a more competitive buyer and streamline the homebuying process.
  6. Consider hiring a mortgage broker: If you find the mortgage process overwhelming or want professional guidance, consider working with a mortgage broker. A mortgage broker can help you navigate the Denver market, compare loan options, and negotiate with lenders on your behalf. They have access to a wide range of mortgage products and can assist you in finding the best mortgage terms for your specific needs.
  7. Factor in additional costs: When budgeting for a home purchase in Denver, don’t forget to consider additional costs beyond the mortgage. Property taxes, homeowners insurance, closing costs, and maintenance expenses should all be taken into account. Understanding these costs upfront will help you plan your finances more effectively.
  8. Stay within your budget: Lastly, it’s crucial to stay within your budget when buying a home in Denver. While it can be tempting to stretch your budget to get your dream home, it’s important to consider the long-term financial implications. Make sure you can comfortably afford the monthly mortgage payments and still have room for other expenses and savings.

Denver Property Taxes

Property taxes in Denver are based on the assessed value of your home. It’s essential to budget for this annual expense. You can often roll your property taxes into your monthly mortgage payment, but ensure you understand the total amount and how it’s calculated. Check with the local county assessor’s office for the most accurate and up-to-date information on property tax rates.

Preparing Your Finances

Before diving into the home buying process, take a holistic look at your finances. This includes:

  • Debt-to-Income Ratio: Lenders use this ratio to determine your ability to manage monthly payments. Aim for a ratio below 43% to increase your chances of loan approval.
  • Emergency Fund: Ensure you have an emergency fund in place. This fund can cover unexpected home repairs or financial setbacks.
  • Budgeting: Create a monthly budget that accounts for your mortgage payment, property taxes, insurance, and other homeownership costs.

Working with Real Estate Agents

A knowledgeable real estate agent can be a valuable asset in your home buying journey. They can provide insights into the local market, negotiate on your behalf, and guide you through the closing process. For more information on the home buying process and working with real estate agents, contact Horizen Realty today.

Taking advantage of first-time homebuyer programs in Denver

Denver offers several homebuyer programs that can help make purchasing a home more affordable. One such program is the Metro Mortgage Assistance Plus Program, which provides down payment assistance to eligible homebuyers. This program offers a grant of up to 4% of the mortgage loan amount, which can be used towards the down payment and closing costs. Another program is the Colorado Housing and Finance Authority’s (CHFA) first-time homebuyer program, which offers low-interest mortgage loans and down payment assistance to qualified buyers. These programs are designed to assist individuals and families who may not have enough savings for a down payment or who have a lower income. By taking advantage of these programs, homebuyers in Denver can reduce their upfront costs and make homeownership more attainable.

CHFA Home Ownership Info

Another first-time homebuyer program in Denver is the Metro Mortgage Assistance Plus program. This program provides down payment assistance in the form of a grant that does not need to be repaid. Eligible homebuyers can receive up to 4% of the mortgage loan amount to use towards their down payment and closing costs. The program is available to first-time homebuyers and individuals who have not owned a home in the past three years. There are income and purchase price limits that applicants must meet to qualify for the program. It’s important to research and understand the specific requirements and benefits of each program before deciding which one is right for you.

In addition to down payment assistance programs, Denver also has programs specifically tailored for first-time homebuyers. The Denver Mortgage Credit Certificate (MCC) program is one such initiative. The MCC program allows eligible first-time homebuyers to claim a federal income tax credit of up to 20% of the annual mortgage interest paid. This can result in significant savings over the life of the loan. The MCC program aims to make homeownership more affordable by reducing the amount of federal income tax owed, thereby increasing the homebuyer’s disposable income. It is important for potential homebuyers in Denver to explore these programs and determine if they meet the eligibility criteria, as they can provide valuable financial benefits. To qualify for the MCC program, homebuyers must meet certain income and purchase price limits, as well as other eligibility criteria. It’s worth consulting with a mortgage lender or housing counselor to determine if you qualify for this program and to understand how it can benefit you financially.

Another noteworthy homebuyer program in Denver is the NeighborhoodLIFT program, which is offered by Wells Fargo in collaboration with local nonprofit organizations. This program provides down payment assistance grants and homebuyer education to eligible individuals and families. The grants can be used towards the down payment and closing costs, helping to bridge the affordability gap for homebuyers. The NeighborhoodLIFT program also offers homebuyer education workshops, which provide valuable information and resources to help buyers navigate the home purchasing process. By participating in this program, homebuyers can gain access to financial assistance and educational support, making their homebuying journey smoother and more informed.


Buying a home in Denver is an exciting venture, but it requires careful financial planning. By understanding the local market, preparing your finances, and seeking expert advice, you can navigate the home buying process with confidence.

Peter Hauben

Peter Hauben

20+ yrs in real estate, Principal Broker at Horizen Realty. Your go-to choice for luxury real estate in Denver Colorado and New Construction Homes. #Luxury #RealEstate #NewConstruction #HomeSeller #@HomeBuyer More About Peter Hauben

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About Peter Hauben

With an engineering master’s degree and over two decades of experience in international business and real estate, Peter Hauben brings a unique blend of innovation and expertise to the market. As the owner of Horizen Realty, he’s revolutionized the industry with his Listing Success System, turning ordinary listings into the most sought-after properties. Peter’s passion for energy-efficient design, commitment to personalized service, and relentless pursuit of excellence have positioned Horizen Realty as the go-to choice for discerning clients. Reach out to Peter, and experience the future of real estate today.

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