How Much House Can You Actually Afford in Denver Right Now

Almost every buyer I work with shows up with a pre-approval letter for more than they actually want to spend. That's not a criticism — it's just how lender qualification works. The number on that letter tells you the ceiling your lender is comfortable with. It doesn't tell you what you'll be comfortable with at month fourteen, after the new-house furniture and the first surprise repair.

Here's the honest version of "what can I afford" — not the maximum, the realistic one.

What "afford" actually means

A common starting rule of thumb: aim to keep your total housing payment — principal, interest, taxes, insurance, and any HOA dues — at or below roughly 28% of your gross monthly income. Lenders will often qualify you well past that, sometimes up to 40–45% of gross income when your total debt load allows it. That gap between what a lender will approve and what actually feels comfortable month to month is the single biggest thing I try to walk clients through before they start touring homes.

A note before the numbers below: this is a simplified illustration, not a loan quote. Your actual payment depends on your rate, credit profile, taxes, insurance, and HOA dues — always confirm exact figures with a lender before setting your budget.

What the math looks like across our neighborhoods

Using a 20% down payment and an illustrative 6.4% 30-year fixed rate, here's roughly what principal and interest alone looks like at each neighborhood's current median price:

Add roughly $300–$900 a month on top of that for property taxes and homeowner's insurance depending on the specific property, plus HOA dues where applicable. That's the number that actually hits your account every month — not the P&I figure alone.

The gap between "approved for" and "comfortable with"

This is the part I spend the most time on, and it's the part that doesn't earn me a bigger commission — a client who buys a $780,000 home instead of the $950,000 they were approved for is a smaller number for everyone involved, including me. I bring it up anyway.

A few questions I ask every buyer before we start touring:

• Does this payment still work if one income drops or changes?

• Have you budgeted for the first year of "new house" costs — appliances, furniture, the repair that always shows up in year one?

• Are you comfortable with less monthly cushion for three to five years while equity builds, or does that number keep you up at night?

If the honest answer is "this feels tight," we adjust the search — often toward Berkeley or Congress Park instead of Highland or Wash Park, where the same square footage and a lot of the same walkability come in $100,000–$150,000 lower. That's not a downgrade. It's matching the neighborhood to the budget instead of stretching the budget to fit a neighborhood.

A few honest rules of thumb

• Budget roughly 1% of the home's value per year for maintenance and repairs — more for an older home that hasn't been recently updated, less for something newly renovated.

• Don't count bonus, overtime, or variable income in your baseline budget. Use it to pay down the mortgage faster or build savings, not to qualify for a higher payment.

• Keep 3–6 months of expenses in reserve after your down payment and closing costs — closing costs typically run 2–3% of the purchase price on top of your down payment.

• Get pre-approved before you fall for a listing, especially in Highland, Berkeley, or Wash Park, where homes are moving in 11–13 days on average. You don't want financing to be the thing that costs you the house.

Want a real number instead of a rule of thumb?

The bottom line

The number on your pre-approval letter is a ceiling, not a target. The right budget is the one that still feels fine in year two, not just the one a lender says you can technically carry. Bring us your actual numbers — income, existing debt, how much cushion you want to keep — and we'll help you find the neighborhood where that budget goes furthest, even if it's not the one you started searching in.