How To Get The Lowest Mortgage Rate in Colorado

How To Get The Lowest Mortgage Rate in Colorado

Hi, everybody, RJ Baxter here with Fairway Independent Mortgage with your tip of the week. First of all, happy holidays to all of you. It’s Christmas week. I can’t believe 2020 is almost over. I hope you guys enjoy some time with your family, this holiday season in a safe way, of course, and enjoy the season.

This week, I want to talk about a topic that’s on a lot of people’s minds right now, and that is, of course, how to get a lower mortgage rate. We always want the lowest mortgage rate. And of course it’s always to our advantage to get the lowest possible rate. That’s what we always strive to do. So I wanted to just share with you a secret that a lot of lenders don’t want to tell you about, and that is points.

Points in and of themselves are not a secret. Lenders are going to tell you about them. They’re going to educate you about them if they’re good. So let me, first of all, educate you on points. And then let me tell you why sometimes points are a secret.

One point is basically a fee that you pay at closing on your loan. One point is equivalent to 1% of the amount of money that you borrow. So if you take out a $400,000 loan let’s say, one point is a $4,000 fee at closing. So why would you want to pay this fee? The reason why is by paying points, you can obtain a lower interest rate.

Is it worth it to pay points? If you’re going to be in the house or the mortgage long enough to recoup that cost of the point and then some, then it would make financial sense. But if you’re going to be in the house for a shorter period of time, it doesn’t make sense to pay the points because the point is way more expensive than the extra interest you’re going to pay over the short term.

This is something that a skilled mortgage advisor should help you with if you’re considering buying down your rate with points. These are also called discount points, by the way. You might hear that term.

The reason why this is a secret is a lot of lenders that advertise interest rates, especially online, but these rates are with points, but they don’t tell you about the points. And they do this to make their rates seem lower when in reality, it’s probably the same as another lender could provide to you by paying the points. But when you see that rate online, it looks lower because it includes points and when you compare it to a lender that’s quoting you a rate without points, the rate seems a lot lower.

This is something to definitely watch out for and make sure that you fully understand the fee structure that the lender is giving you before you commit to moving forward with them. If they’re not talking about the points, but they’re on there, this is very important to know. And if you have an estimate that you’re looking at and you would like me to take a look at it to see if there’s any hidden costs in there and what the true rate would be. I’m happy to do that for you. Just call me or text me at 303-670-0137, or email me at baxterteam@fairwaymc.com, I can review that for you and give you an honest opinion as to how that falls within the marketplace.  We also can send you a custom Colorado Mortgage Rate Quote.