Looking for Lower Home Interest Rates in Colorado? How to Get One
Let’s face facts: buying a house isn’t cheap. It's no secret that owning a home anywhere can be quite expensive, especially in high-demand regions. Affordability matters, and for many people, the biggest obstacle to homeownership is finding an affordable mortgage with a low interest rate. If you're looking for lower home interest rates in Colorado and nationally for your next home, you've come to the right place.
We founded the Blue Pebble Group to simplify the transaction process for residential real estate and to help our clients save money on their property purchases. With our valuable insights, we'll help you learn how to secure a more affordable interest rate on your mortgage so you can worry less about your budget and move into the home of your dreams.
What Influences Mortgage Interest Rates?
Mortgage interest rates are constantly fluctuating across the U.S. due to a multitude of factors within the financial market. Understanding these influences can help you identify ideal times to buy or sell, navigate the housing market with ease, and potentially secure a lower interest rate. Here are some key factors that influence mortgage interest rates:
National Economic Growth Trends: When the economy is strong (i.e., rising gross domestic product, low unemployment rates, etc.), interest rates tend to rise because homebuyers have higher wages and there's greater consumer spending. But, when the economy is weak, interest rates tend to fall because consumers have less disposable income and tend to save more.
Inflation: If the purchasing power of the U.S. dollar changes, mortgage rates can be directly affected. When inflation is high, lenders may raise interest rates to protect themselves against the lost purchasing power caused by rising prices. However, when inflation is low, lenders may reduce interest rates to stimulate borrowing and spending.
Federal Reserve Monetary Policy: While the Federal Reserve does not set specific interest rates for home loans, they can adjust the federal funds rate (i.e., the rate at which banks lend money to each other) and that change can affect overall interest rates.
Housing Market Trends: When there's low inventory in the market, the demand for mortgages tends to decline and in turn pushes down interest rates. But, when inventory is high, demand for home loans will follow suit and so will interest rates.
That said, a big factor that affects home interest rates in Colorado and the rest of the country is the bank or lender for your loan. Depending on the loan structure, your location, and your credit score, you can find very different rates for mortgages from one lender to the next. Simply put: it matters which bank provides your loan.
How to Lower Your Home Interest Rates
When you're shopping for a new home and want to get the lowest possible interest rate, take steps to improve your credit score. That number can carry significant weight in your home loan application and will affect the rates available to you.
It may also be worthwhile to consider your timeline when researching home loans. Interest rates are constantly fluctuating, and, for some people, it can make sense to delay a home purchase and wait for interest rates to fall, but there is no guarantee that'll happen on your schedule.
One of the best strategies to reduce home interest rates in Colorado and across the country is to find a lender that allows you to leverage mortgage points for a lower rate. Mortgage points are used in the loan closing process and essentially function as a form of prepaid interest. There are two kinds of mortgage points (i.e., origination points and discount points) and while both can help you save money on your home purchase, you'll want to use discount points to lower your rates.
Discount points can be exchanged by buyers to lower their interest rates on a loan. In most cases, each discount point is typically equal to 1% of the total mortgage amount. So, one point on a home that's worth $300,000 would be $3,000. With the right lender and enough discount points, you can get a much lower interest rate and reduce your monthly payments by up to 10%!
If you've already got a mortgage, the smart thing you can do is refinance your home loan. While you will need to pay some fees, refinancing can help you secure a much more affordable interest rate and improve other aspects of your loan too.
Explore Home Interest Rates with Blue Pebble
At the Blue Pebble Group, our mission is to help you save money on your residential real estate transactions. Because of our integrated brokerage model, we can simultaneously act as your agent and your lender, and we'll explore every opportunity to reduce the costs of your property purchase. With our discounted mortgage program, you can save hundreds each month on your home loan payments - what could be better than that?
Contact the Blue Pebble team today to explore home interest rates in Colorado and throughout the U.S. and apply for a discount mortgage.