August 25th, 2010

Are Colorado Fixed Rates Mortages The Best Choice?

Posted in Finance

With interest rates historically low, you are in a great position to buy a home with Colorado fixed rates mortgages. It pays to find out what you get for these low rates, and how you can benefit. If you are looking to buy a new home, your timing could not be better. There are some fabulous deals on the market, and the low interest rates really make the purchase of your dreams possible.

First of all, you should find out what the current rates look like. You can visit online sites such as bankrate.com for this information, or investigate the rates advertised by local banks. Then, talk to a mortgage adviser. The Colorado Mortgage Lenders Association is a solid resource for finding a mortgage professional who will advise you competently, and ethically. A mortgage professional will pair available loans to your budget, and tell you honestly about what you can qualify for. Often, you will score a better scenario than if you just went on the web and tried to do this yourself. Remember, mortgage professionals are working “behind the scenes” of online banking sites, so it is best to have one that is personally working for you.

You’ll want to know if the term should be 30 years or 15 years. There are pros and cons to both. A 30 year “conventional” fixed mortgage will have a lower monthly payment. However, if you are paying off the loan in half the time, you are building equity at a quicker rate, and will save thousands of dollars over the duration of the loan.

Next, you’ll want to know upfront about any fees, and if points are necessary to get a low “teaser” rate. Each point represents one percent of the loan value. Points are paid up front at closing, and it gets you the lower rate. A mortgage lender can advise you if this upfront cost will benefit you over the long run, or if you should stick with a higher rate of interest and fewer or no points.

Make sure that you understand the terms of your mortgage, what your monthly payment will be, and whether there are any penalties for prepaying your loan. You will also want to know if it is advisable to pay your taxes and homeowners insurance with your mortgage, or pay those separately. It simplifies matters knowing the payment is planned for and not overlooked. However, many people opt to pay taxes and insurance as separate items.

There has never been a better time to look into Colorado fixed rates mortgages. Do your research, and then consult a mortgage pro when you are ready to make your big move.