Colorado Mortgage Rates: Factors to Weigh When Considering To Buy

The first thing you need to know when house buying is that rates are not everything. While there is no one-size-fits-all solution, there are some common factors to consider. Besides the low rates, what is your main reason to buy? You may want to have an easier commute, be closer to work, easier walkability, or to be near establishments. The decision to purchase a new home comes first, then you evaluate monthly payments and Colorado mortgage rates to figure out how much house you can afford.

How Long Do You Plan To Stay In The House?

There are costs associated with purchasing a property. If you want to own it for less than 2 to 3 years, you may not be able to recoup those costs. The costs to buy property include title insurance, loan origination fees, appraisals, transfer and recordation taxes, home inspections, and attorney fees. The transaction costs upfront for the home buyer alone can add about 3% of the sale price.

When it comes to home selling, the costs of transactions can reach up to 9% of the sale price. If you plan on staying at your new home for two years, you will probably lose money. Over time, low mortgage rates can offset transaction expenses. The longer you reside in your house, the more you can take advantage of the low rate; as a result, you can break even on the costs.

Another thing to consider before buying is the potential recession. With this, pause before you buy, even though it is not a reason to stop buying property altogether. Geography is important. If you reside in a region where the economies are dependent on manufacturing and trade, you may be more prone to those headlines.

Rates are not the only factor in home buying. Low interest rates make you want to consider making the purchase. But, make sure to make a smart choice and get a good deal. You must be comfortable in the house for about 5 to 7 years, in case you need to ride out a recession.

Should You Consider Refinancing After Homeownership?

A lot of homeowners take advantage of low rates through refinancing. For example, you save $100 every month. This can add up to huge savings on your 30-year mortgage, depending on the size of your home loan. The same rule applies when it comes to refinancing. If you plan to own the house for another3 years or more, you may not regain the upfront refinancing costs. The savings only apply if you own the house for a longer period.

If you are planning to buy an investment property while the Colorado mortgage rates are low, it is advisable to ask yourself first if you are ready to be a landlord. This is because it is not as easy as you may think. You need to abide by the local laws as well as deal with taxes, unexpected repairs, mortgage payments, home maintenance, emergency water leaks, and many others.