Colorado Mortgage Refinancing

Posted by  on Apr 16, 2009
Nearly every Colorado mortgage lender will trade mortgage points for better terms or a lower mortgage interest rate. Here are some tips to help you decide if paying points when Colorado mortgage refinancing is worthwhile for you.

The decision to pay points when refinancing your Colorado mortgage mainly depends on how long you want to keep your Colorado home. If you stay in your Colorado home for at least five years you could benefit from paying points for a lower Colorado mortgage rate. Here is an example of how trading Colorado mortgage points can save you money.

If you were considering Colorado mortgage refinancing for $100,000 and the lender quoted you an interest rate of 8.0% with zero points because you had credit problems in the past, by paying three Colorado mortgage points at closing (one point=1% of the Colorado mortgage loan amount), you could qualify for a 6.75% Colorado mortgage rate. Your Colorado mortgage refinancing monthly payment at 8.0% would be $733 per month, and at 6.75% you would pay $648 per month. This results in a savings of $85 per month; it will take you 35 months to regain the $3,000 you would be required to pay at the closing of your Colorado mortgage refinancing.

Paying Colorado mortgage points at the closing of your Colorado mortgage refinance can be beneficial for Colorado homeowners with poor credit. Whether or not paying Colorado mortgage points is right for you depends on your financial situation however. Don’t simply rely on your Colorado home loan representative to recommend if paying Colorado mortgage points makes sense; generally a mortgage loan broker will tell you the loan option that produces the largest commission. Never ask your Colorado mortgage broker, “Which Colorado mortgage refinancing loan is best?” Instead, ask to see the interest rate sheet that shows your options with and without points so the two of you can work through the numbers.


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