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Finding The Best Mortgage

by The Colorado Springs Group™

As rates are inching up but still very affordable, buyers should remember that there is an alternative to a fixed rate mortgage that can provide the lowest cost of housing for the homeowners who understand the parameters.

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A $300,000 fixed-rate mortgage at 4% has a principal and interest payment of $1,432.25 per month for the entire 30 year term. A 5/1 adjustable mortgage at 3% has a $167.43 lower payment for the first five years and then, can adjust, up or down, based on a predetermined index.

Another interesting fact is that the unpaid balance on the ARM at the end of the first five years is $4,624 lower than the fixed-rate mortgage. The total savings in the first five years on the ARM is $14,669.00.

Adjustable rate mortgages are not the right choice for everyone but buyers should at least consider the options based on their individual situation. It could be an obvious choice for a buyer who is only going to be in the home for five years or less.

Use the ARM Comparison worksheet to see what possible savings you could have based on your actual numbers. A trusted mortgage professional can help you to understand the advantages and disadvantages based on your situation. You need the facts to make the best decision.

Cut Mortgage Insurance

by The Colorado Springs Group™

Making additional payments toward the principal of your mortgage will do three things for the homeowner: save interest, build equity and shorten the term on fixed rate mortgages.

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These things should be beneficial enough to justify the extra payments but another huge advantage is available to those who have private mortgage insurance on their loan. Mortgage insurance rates vary but can range from seventy-five to two hundred dollars a month on a $200,000 mortgage.

Lenders are required to automatically terminate mortgage insurance when the principal balance reaches 78% of the original value of the property. It is important for homeowners to monitor their balance because sometimes lenders may inadvertently fail to terminate the coverage.

Mortgage insurance is a necessary but expensive requirement for many people who are limited to a down payment of less than 20%. Eliminating the need for it can save thousands of dollars over time.

The Consumer Financial Protection Bureau, CFPB, issued a compliance bulletin on August 4, 2015.

2015 August Sales Activity

by The Colorado Springs Group™

Broken down by area to give a better prospective on the results for August. Single Family & Patio Homes

Black Forest: 24 Sales for a total dollar volume of $12,005,800

Briargate: 108 Sales for a total dollar volume of $34,807,962

Central: 77 Sales for a total dollar volume of $16,197,016

East: 88 Sales for a total dollar volume of $18,706,075

Fountain Valley: 188 Sales for a total dollar volume of $40,943,626

Falcon - Peyton: 87 Sales for a total dollar volume of $25,342,681

Marksheffel: 23 Sales for a total dollar volume of $6,138,508

Northeast: 114 Sales for a total dollar volume of $26,435,615

Northwest: 48 Sales for a total dollar volume of $18,168,489

Northgate: 43 Sales for a total dollar volume of $17,173,938

Old Colorado City: 31 Sales for a total dollar volume of $6,535,726

Powers: 141 Sales for a total dollar volume of $33,848,543

Southeast: 80 Sales for a total dollar volume of $13,214,748

Southwest: 60 Sales for a total dollar volume of $27,958,900

Tri-Lakes: 69 Sales for a total dollar volume of $28,591,352

West: 27 Sales for a total dollar volume of $8,692,165

"Based on information from the Pikes Peak REALTOR Services Corp. ("RSC"), for the period 8/1/2015 through 8/31/2015.  RSC does not guarantee or is in any way responsible for its accuracy.  Data maintained by RSC may not reflect all real estate activity in the market."

Lower the Rate & Deduct the Interest

by The Colorado Springs Group™

A home can easily be a person’s largest personal asset and it can be a powerful tool to increase financial stability also.

Since most mortgages are amortizing, the loan becomes a forced savings account that reduces the unpaid balance with each payment. The equity could be used to improve a homeowner's financial position involving other loans.

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While every homeowner recognizes that they can deduct the interest paid on their mortgage, it is surprising how many don’t know that they can write-off the interest on up to $100,000 of home equity debt assuming there is sufficient equity in the home.

The real advantage to a homeowner is that the money borrowed can be used for any purpose and the interest is still deductible. Homeowners could payoff high-interest rate credit card debt or student loans with a considerably lower rate on a mortgage and deduct the interest on the home-equity debt.

Replacing debt with lower rate loans that have deductible interest can be a strategic decision to financial stability and a debt-free environment. A trusted mortgage professional can help you analyze your individual situation to determine if it would be better to refinance with a cash-out first-mortgage or a dedicated home equity loan.

Things That Kill Your Credit

by The Colorado Springs Group™

Some people take their credit for granted and don’t start paying attention to it until they need it. The problem with this is that it could delay if not altogether cause the loan to be denied.

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The most common issue is not correcting items on your credit report. A large majority of credit reports have errors but not all of them are critical. Since it takes time to remove them, it is a good practice to review your free credit reports from each Experian, TransUnion and Equifax once a year at www.AnnualCreditReport.com.

Another problem is making late payments. One 30-day late payment could be enough to cause a borrower to pay a higher interest rate or even be denied a loan. Payments have a due date and even when they allow a few days before a late fee kicks in, if it isn’t on-time, it is late.

Maxing out credit cards is another big problem. Ideally, a person wants to have an outstanding balance of no more than 30% of their available credit. As the percentage of available credit decreases, the credit score will go down.

Bad credit can not only keep you from getting the loan you want, it can raise your rates on the insurance you buy. In a study released by the Consumer Federation of America, people with good credit paid less than people with average and poor credit. Their results indicate that some customers with poor credit scores were charged about twice as much as those with excellent scores.

A prudent idea if you are going to be moving to a larger home is to get pre-approved with a trusted mortgage professional before you sell your current home. Occasionally, sellers find out after they’ve sold their home that they can’t qualify for another mortgage.

Have a safe and happy Labor Day weekend!

by The Colorado Springs Group™
 
Spring Forward
 


Labor Day is the first Monday in September
Founded in 1882. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.
 

 

Jessica Laude
The Colorado Springs Group™
1755 Telstar Drive
Suite 300
Colorado Springs, CO 80920
 (719) 799-3686
 Info@ColoradoSpringsGroup.com
 
www.Colorado SpringsGroup.com
 

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The Colorado Springs Group™
6665 Wild Indigo Drive
Colorado Springs CO 80923
(719) 799-3686

Kevin & Jessica
The Colorado Springs Group
6665 Wild Indigo Drive
Colorado Springs, CO 80923
(719) 799-3686