Deciding Whether to Refinance Your Colorado Mortgage

By Allison E. Beatty
Local Lender Columnist
May 25, 2006
As interest rates remain at historic lows, many homeowners are refinancing to take advantage of market conditions. There are many variables to consider, however, when deciding whether to refinance and which mortgage to select.

Weigh all the Colorado Mortgage Options

There are a variety of mortgage loan options for Colorado borrowers. Among the more popular ones are:

• Adjustable rate mortgages with low rates for 1, 3, 5 or 7 years, typically. The rate then increases yearly.
• Fixed rate mortgages with a set rate for a set period of time, typically 30 years.
• Mortgages with cash out options that let you pull out equity to pay for home improvement or other expenses.
• Hybrid mortgages that pair adjustable and fixed interest rates in one. The rate often is set for a period of time, and then adjusts annually.
• Interest only mortgages that only require you pay interest and not principal.

Interest Rates Are Key

One popular reason for refinancing is to gain a more favorable interest rate and save money. If you purchased your home many years ago when rates were higher, you might save in today's mortgage climate. Here are other situations when refinancing makes sense:

• You want to pay off high interest credit card debt with funds from a lower interest mortgage.
• You want to pay off a home equity loan or line of credit that carries a higher interest rate.
• You need funds for home improvement, a new car, college courses or other major expenses.

As you investigate online and Colorado mortgage lenders, look for:

• A variety of mortgage programs.
• Quick response to inquiries.
• Low cost home appraisals to set value of your home and equity.
• Detailed estimates on closing costs.
• Mortgages that fit a variety of needs – first time homebuyer, credit repair needs, etc.

Refinancing your mortgage can be a positive financial step, as it can help you reduce your mortgage payments and take cash out for other expenses. Before committing to one mortgage, however, examine all the options for one that best fits your financial goals.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing columns for 15 years.