Mortgage Types in Colorado

With all things today you have more choices than ever before, Colorado mortgage types are no different. There are many different types of mortgages and within those types, many options and variations to help almost anyone buy a home.

The 2 main types of Colorado mortgages are the Colorado fixed mortgage and the Colorado adjustable rate mortgage (ARM). The fixed rate mortgage is a loan where the interest rate is fixed or stays the same for the life of the loan. A Colorado adjustable rate mortgage or ARM is where the interest rate adjusts or changes after a certain amount of time or in increments.

Some available options for fixed rate mortgages are;

30 year Colorado fixed rate mortgage. This is the most common Colorado home loan. You have 30 years to pay back the mortgage by making regularly monthly payments, (360 of them), and the interest rate never changes.

15 year Colorado fixed rate mortgage. You have 15 years to pay back the Colorado mortgage by making regular monthly payments, (180 of them), and the interest rate never changes. This Colorado mortgage allows you home ownership in half the time of the common 30 year loan, but remember, the monthly payments will be higher.

Colorado Fixed rate balloon mortgage. This Colorado mortgage type is preferred by people that expect the property to appreciate quickly and plan on selling it before the Colorado balloon payment is due. This is a Colorado fixed loan with low payments like a 30 year fixed rate loan, however, somewhere between 5 to 7 years depending on the terms the mortgage ends with a single large payment, (the balloon).

Colorado adjustable rate mortgages (ARM) are riskier loans than the fixed rate variety for both the borrower and lender. The type of ARM loans offered depend on changes in the economy. Below are some Colorado loan options, be aware that not all options may be available all the time.

Colorado Hybrid ARM. A Colorado hybrid loan can start as a fixed rate and convert to an ARM or just the opposite; it can start as an ARM and convert to a Colorado fixed rate loan. If you start with a Colorado fixed rate you will have that interest rate for 2, 3, 5, 7 or 10 years depending on the terms. Then the Colorado loan converts to a 1 year adjustable ARM. The interest rate will be based on the rates available at that time, plus an additional amount or margin. The Colorado mortgage payment can increase at each stage and the rate is usually capped so the Colorado mortgage payments stop increasing when the rate cap is reached.

Colorado Two step mortgage. A Colorado two step mortgage is a type of hybrid ARM, this type adjusts only once.

Colorado Convertible ARM. This is the type of Colorado hybrid ARM. You start with the lower interest rate ARM and then it changes to a 30 year fixed loan at which time your payments could go up. There may be a fee or fees associated tot his loan at the time it changes or converts.

Colorado Payment option ARM. This option provides a lot of flexibility but can get costly. During a specified number of years you get to decide what kind of payments you make. Your choices are;
Minimum payments, which would not cover interest.
Interest only, which does not reduce the balance.
Principal and interest, that would payoff the loan in 30 years.
Principal and interest, that would payoff the loan in 15 years.
With some options, negative amortization may occur. Negative amortization is when the amount you owe on your home is more than what the home is worth.

Colorado 2/28 adjustable rate mortgage, also known as the 3/27 or other similar names.
These types of Colorado home loans may help people with lower credit scores. Essentially, the rate is fixed for the first 2, 3, etc. years, allowing the borrowers to rebuild their credit. Then the loan adjusts for each of the next, 28, 27, etc, years plus a margin. Basically the rate and the payments will go up, so it is good to refinance after the initial time period. Just be sure there isn't a prepayment penalty past the 2, 3, etc year mark.

Colorado mortgage allowing interest only payments.
If you plan to move before the interest only period ends, so if you expect the value of the house to increase greatly, or you receive large bonuses at certain times of the year this may be an option for you. You can get an interest only option on any type of loan. It is usually available for a limited time and then the payments jump up. This option does not help to payoff the balance of the loan; you are only making payments on the interest.

Colorado Low or no documentation loan.
With this Colorado loan you do not have to show proof of income or assets. You may need a substantial down payment and a very high credit score. This Colorado loan helps people that count tips as a large part of their income, are self employed or have commission based jobs.

Colorado Pre-payment penalty loans.
Any Colorado loans can have a pre-payment penalty, so you need to know what your loan states before signing. Sometimes these Colorado loans offer lower payments throughout the loan or upfront as long as you don't refinance before a certain date.

Colorado buy down mortgage
There are 2 types of buy downs; temporary and permanent. A temporary buy down lowers your interest rate and monthly payments for the first few years. New home builders tend to offer these deals. They have a variety of names but a popular version is the 3-2-1, where the interest rate and your monthly payments go up each year for the first 3, 4 etc years of the loan and then locks in at a predetermined rate for the remainder of the loan. A permanent buy down lowers the interest rate for the life of the loan.

Research Colorado mortgage types and discuss all of your options with your mortgage lender to find the best loan for you and your situation. More information can be found on this site ColoradoHomeLoan.org.

Fill Out An Application

Take the first step and fill out the online application. Once contacted, we will let you know within a day if you are approved for your loan amount and will close within 10 days.

30 Year Home Saver

Our 30-Year Home Saver Loan provides security and saves you money. In fact, few mortgage companies are AUTHORIZED by the Federal Housing Authority to sell these products.