Homebuyers and those looking to refinance in Colorado can benefit from competitive mortgage rates. Here’s an overview of the current rates and tips for securing the best mortgage.
Current Mortgage Rates
Mortgage rates in Colorado vary depending on the loan type and term. Here are the average rates for some of the most common mortgage products:
Purchase Rates
30-Year Fixed Rate
- Average Rate: 7.14%
- APR: 7.18%
15-Year Fixed Rate
- Average Rate: 6.53%
- APR: 6.58%
30-Year Fixed Jumbo Rate
- Average Rate: 7.10%
- APR: 7.15%
15-Year Fixed Jumbo Rate
- Average Rate: 6.45%
- APR: 6.50%
Refinance Rates
30-Year Fixed Refinance
- Average Rate: 7.31%
- APR: 7.35%
15-Year Fixed Refinance
- Average Rate: 6.70%
- APR: 6.75%
How to Get the Best Mortgage Rates
Securing the best mortgage rate involves several strategic steps:
- Improve Your Credit Score: Aim for a credit score of 780 or higher to access the lowest interest rates.
- Lower Your Debt-to-Income Ratio (DTI): Reduce your DTI by paying off existing debts and increasing your income. A lower DTI indicates less risk to lenders.
- Increase Your Down Payment: A larger down payment can lower your loan amount and interest rate.
- Consider Loan Points: Paying for mortgage points can reduce your interest rate. Each point typically costs 1% of the loan amount and can lower the rate by about 0.25%.
- Shop Around: Obtain and compare quotes from multiple lenders. Even a slight difference in interest rates can result in significant savings over the life of the loan.
Special Programs in Colorado
Colorado offers several programs to assist homebuyers in securing favorable mortgage rates:
- CHFA Second Mortgage Loan: The Colorado Housing and Finance Authority (CHFA) offers a second mortgage loan that can help finance up to $25,000 or 4% of your loan amount, whichever is less. The funds can be used towards your down payment or closing costs, with repayment options that allow you to wait until you sell the home, pay off the primary mortgage, or move out.
- CHFA Down Payment Assistance Grant: This program offers up to $25,000 or 3% of the loan (whichever is less) to help boost your down payment or cover closing costs. Since this is a grant, repayment is not required.
Understanding and comparing current mortgage rates is crucial for anyone looking to buy or refinance a home in Colorado. By improving your credit score, lowering your DTI, making a larger down payment, considering loan points, and shopping around, you can secure the best possible rate. Additionally, leveraging special programs like those offered by CHFA can provide further benefits and savings.
For more detailed information and personalized quotes, it’s advisable to consult multiple lenders and explore all available options. This proactive approach will help you make informed decisions and achieve your homeownership goals in the most cost-effective manner.
