Home Mortgage Rates in Colorado
Colorado Real Estate Trends
What kinds of mortgages are available in Colorado? Are the loans recourse or non-recourse? What is the foreclosure process like in Colorado? What are the average real estate prices in Colorado, and how do they compare with other states? What are the most popular, and what are the fastest growing cities in the state? This article will examine those topics in depth.
Average Real Estate Prices in Colorado
According to homegain.com, the average price for a home in the United States is $173,585. The average home in Colorado costs $219,558.
Average home prices for various areas in the state are:
- Colorado Springs, $189,305
- El Paso County, the county Colorado Springs is in, $193, 838.
- Denver, $213,068
- Jefferson County, the county Denver is in, $259,053
- Pueblo, $120,712
- Pueblo County, $121,286
Although some real estate experts point out that real estate prices in Colorado are one-third what they are in some other popular areas, like California, they also note there might be some obvious reasons prices are still above the national average. Some reasons include: the natural beauty of the state, including a mountainous area six times the size of the whole country of Switzerland, with many mountains more than 14,000 feet high; the amount of outdoor recreation available; the largest city park system in the country in Denver; a mild climate; and more than 30 major colleges and universities.
Most Popular Cities in Colorado
According to the Denver Business Journal, Denver, the city is not only popular locally, but is the second most popular city nationally to live in, behind only New York City. Other experts who rated cities consider Colorado Springs as one of the top places to live, when considering cost of living, unemployment, green spaces, and other factors. Other areas rated as desirable places by some experts for various reasons, and that might be popular at least among some groups of people for those same reasons include:
- Highland Ranch, which was rated high by Money Magazine because of its strong job growth.
- Castle Rock, which was called the best place for familes, by Family Circle
- Gunnison, because of the terrain, things to do, and economic opportunity.
Fastest Growing Cities
Some of the fastest growing cities in the state are:
- Aurora, which was the 50th fastest growing city in the country, according to citymayors.com
- Colorado Springs, the 69th fastest
- Fort Collins, the 81st fastest
- Thornton City
- Arvada City
- Fort Collins
Reasons many people give for living in Colorado, which may cause the cities to grow so fast include the mild climate, the many days during the year when sunshine is available, the beautiful scenery, including the many mountains, and the economic opportunities available.
Interest Rates for Mortgages in Colorado
Although the interest rates in Colorado are slightly higher than nationally, a borrower can get a low rate, if he has demonstrated a high degree of trustworthiness as far as his credit. Someone wanting a shorter term mortgage, for example a 20-year loan, as opposed to a 30-year loan, can also get a cheaper rate.
The popularity of the Colorado area, because of its mild climate, beautiful scenery, educational system, park system, and economic opportunities, has driven up the price of real estate generally (although prices are still far less than some other popular areas, such as Florida), regardless whether or not that has affected interest rates.
Types of Mortgages in Colorado
The types of mortgages available in Colorado include:
- Fixed rate mortgages
- Adjustable rate mortgages
- The 2-1 Interest Rate Buy Down
- The 3-2-1 Interest Rate Buy Down
- Flex Fixed Buy Down
- Balloon Loans
- Home Equity Loans
Fixed Rate Mortgages
With a fixed rate mortgage, the monthly payment amount paid by the home buyer never changes. Even though home buyers may find their property taxes increase or may pay more for insurance, their monthly payment amounts will remain stable. Commonly a home buyer will purchase a home with a fixed rate mortgage for 30 or 15 years. Payments are structured so that the mortgage will be paid off at the end of the mortgage term.
Adjustable Rate Mortgages
Home owners who purchase a home with an adjustable rate mortgage may find their payments will increase or decrease, depending on interest rates. Buyers who choose this option may be able to take advantage of falling interest rates. On the other hand, they may find their monthly payments will decrease dramatically, if interest rates rise.
The 2-1 Interest Rate Buy Down Mortgage
With this type of mortgage, a home buyer begins to repay the interest at the beginning of the payoff period. Because the interest is paid off early, the payments for the homebuyer will be much lower. With a 2-1 Interest Rate Buy Down, a buyer has to pay three points above current market points. This enables him to pay a below market interest rate the first two years of the mortgage.
The 3-2-1 Interest Rate Buy Down Mortgage
This type of mortgage works a lot like the 2-1 Interest Rate Buy Down Mortgage. The difference is the starting interest rate is 3 % below the note rate.
The Flex Fixed Rate Buy Down Mortgage
With this mortgage, the interest rate increases at six month, not annual intervals. Although the rate increases each six months, it will remain the same during each six month period, with no increases or decreases.
These types of loans have some of the same features as fixed rate mortgages. Although there is a level payment feature during the term of the loan, payments do not amortize during the original term. When the loan period has expired, there is a remaining balance that usually must be paid off in full. If someone cannot pay this amount in full, the loan may be refinanced. Sometimes the loan can be converted to a 30-year loan. Balloon mortgages often are first mortgages, with a term of five to seven years.
Home Equity Loans
With a home equity loan, a home owner uses the equity in his house as collateral to obtain a loan. They loan may be used for home repairs, to pay off debt, buy a business, to pay medical bills or for a college education. With a home equity loan, a borrower will actually have less home equity, because a lien will be placed against his house.
Recourse or Non-Recourse Mortgages
Colorado is a non-recourse state. That means the state cannot pursue you, in case of foreclosure, for financial losses. In a non-recourse state, borrowers may not be liable for more than their home is worth when the loan is repaid. The lender may be able to get some of his money back through foreclosure. He may not sue the borrower for additional money, however.
Foreclosure Process in Colorado
Judicial and non-judicial foreclosure is available. The non-judicial foreclosure, the deed of trust sale, is strongly preferred. With a judicial foreclosure, a judge supervises the whole process after a complaint is filed. The process will start when a lawsuit is filed in the county where the property is. The process begins after a complaint is filed with the county clerk of court. Often, a lis pendins, which notifies all parties interested in a particular property that litigation is pending concerning the property, is filed. The property will then be extremely difficult to market. With a judicial foreclosure, the home owner has the legal right to pay back payments and interest before the court orders a property sold. The foreclosure process takes well over a year, so the home owner has a good deal of time to make payments on the house and interest payments.
In Colorado, the governor appoints a public trustee in each county to handle power of sale foreclosures, if he is asked to do so.
The borrower has seven days before the foreclosure sale to cure the default, if the default is due to non-payment.
In the state, the lender may sue for a deficiency, if the house sells for less than the cost of the loan during a foreclosure sale.
The owner's redemption period was eliminated January 1, 2008.