Rising Mortgage Rates and Falling Colorado Home Values Might Mean It's Time To Refinance

By Gabriel Traverso
Local Lender Columnist
Jul 23, 2007
Homeowners in Colorado may be facing some stormy weather ahead in the housing market. With rates on the rise and home values heading in the opposite direction some are even facing foreclosure.

Adjustable Rate Mortgages and Other Alt-A Loans Might be at the Root

Development Research Partners recently released a study of the mortgages that went into foreclosure last year and found that most of the loans were less than three years old and that many homeowners had taken advantage of low teaser rates offered by ARMs and other alternative mortgages. That was during a period when home values were appreciating nicely, but now Colorado homes are on a downward track (Fiserv predicts prices in Denver will drop 2.2% by April 2008).

Mortgage Rates Are Going Up

Another piece of the bad news mixture for Colorado is that rates are tracking upward. Freddie Mac projects that the 30-year fixed-rate average will be as high as 6.5% by the end of next year, while the Mortgage Bankers Association reported that for the week ending May 18th 30-year mortgage rates had gone up to 6.23% from 6.13% the week prior. Faced with rising rates and mortgage payments that might be getting to be too high, some Colorado residents might need to start looking at refinancing their way out of potential hot water.

Mortgage Refinancing Might be the Answer

Last year approximately 5,100 foreclosures went through in Denver, Colorado alone. Through February of this year there have already been 1,057 foreclosure notices delivered. If you have a mortgage you can't afford, start considering refinancing as a possible solution. Start shopping around to get the best rates on your refinance.

Sources
Rocky Mountain News
Freddie Mac
CNN Money
Mortgage Bankers Association

About the Author
Gabriel Traverso is a freelance writer, professional musician, and an artist. He resides with his family in Reno, NV.