Getting the Best Mortgage Rates in Denver (10-15-30-Year Fixed, 5/1, 7/1 ARM)
As every homeowner knows, purchasing a house comes with plenty of outright and hidden costs attached—and the real estate market in Denver is no different.
With an ever-growing economy, housing prices throughout the state have increased 50 percent since 2012, meaning that potential homeowners in Denver may find themselves paying more in closing costs, too.
The closing costs associated with Denver mortgages are relatively high, averaging between 2-5 percent of the purchase price. For a $200,000 home with a 20 percent down payment, homebuyers can expect to pay an average of $1,990 in closing costs.
With rising property values and increasing fees from Denver mortgage lenders, it’s more important than ever for homebuyers to find a manageable Denver mortgage rates.
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Hidden Costs of Denver Mortgage Rates
Before you even start the application process, it’s helpful to consider the following “hidden costs” of Denver mortgage rates:
- Mortgage application fees (typically 1-2 percent of the total purchase price)
- “Good faith deposit” (helps the seller know that you intend to buy)
- Down payment (20 percent of the total mortgage)
There are also closing costs to consider, which can include a wide range of expenses from:
- Mortgage points
- Attorney’s fees
- Inspections or surveys
- Title insurance
- Escrow deposit
- City recording fees
Although all Denver mortgages are subject to their own unique differences, Investopedia estimates that the average closing costs for a Denver mortgage can include:
- $1,134 for origination fees
- $434 for an appraisal
- $388 for settlement costs
- $76 for tax services
- $435 for a survey
- $125 for pest inspections
- $100 for courier services
- $21 for a credit report
- $10 for flood certification
Denver, CO
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Factors that Influence Denver Mortgage Rates
Monthly payments on a Denver mortgage should not be higher than 28 percent of total monthly income, including related expenses like principal, interest, taxes, insurance, and even HOA fees.
While mortgage terms will play a role in determining monthly costs, Denver mortgage rates will largely determine whether monthly payments are affordable.
See the sections below for common elements that can impact your mortgage rate in Denver.
Credit Score
Just like any other loan, a borrower’s credit score is used as a benchmark for reliability. Denver mortgage lenders see high credit scores as proof of reliability, offering lower Denver mortgage rates as a result.
Lower credit scores are problematic for lenders, as it raises doubts on whether a borrower can financially manage a mortgage rate in Denver.
While exploring mortgage rates in Denver, take the time to examine your credit score. Look for ways to boost your score through paying off any old debts or resolving errors before committing to a mortgage rate in Denver.
Location
For some Denver mortgage lenders, the location of your home could make a difference in Denver mortgage rates.
The best mortgage rates in Denver may differ when purchasing in an urban vs. a rural area, so make sure that you take note of the location while evaluating Denver mortgage rates.
Down Payment
Putting aside more money for a down payment certainly isn’t fun, but it’s a great way to boost your chances of getting lower Denver mortgage rates. According to Bankrate, most lenders require a payment of at least 3 percent.
Although some mortgage rates in Denver will still be affordable with a lower down payment, the best way to keep a mortgage cost-effective over time is to put 20 percent down.
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Conclusion – Getting the Best Rates & Terms on Denver Mortgages
Finding the best mortgage rates in Denver may take time, but the payoff is certainly worth the effort.
As you search for the best Denver mortgage rates, consider the following questions:
- Can I use local banks or credit unions for affordable Denver mortgage rates?
- Can I get better Denver refinance rates from online-only lenders?
- Could I get lower closing costs by going through a different Denver mortgage lender?
Ultimately, finding the best mortgage rates in Denver comes from analyzing long-term affordability and partnership.
No matter which of the top Denver mortgage lenders you choose, it’s important to partner with a financial institution that you trust and are comfortable working with throughout the length of your mortgage.
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