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Denver Colorado Home Mortgage Loans Fixed or Adjustable Rate Guide

By Kevin A. Guttman-Author, ReverseMortgageSpecialist

Mortgage and Lending with NMLS #384936 NMLS #384936

November 15, 2014 06:09 AM

Denver Colorado Fixed-interest mortgage loan

With a fixed-rate home loan, your interest rate remains the same for the life of the loan and the payment is split into equal monthly payments for the duration. In other words, it is amortized over the life of the loan.

The interest payments are front-loaded, however, so that during the first few years of the loan term, only a small portion of the payment pays off the principal. To see an example of an amortization schedule, plug in some hypothetical numbers in Colorado Home Loan Team's mortgage calculator.

Most commonly taken as a 30-year loan, fixed-rate mortgages can be shorter in duration or, more rarely, longer.

"Colorado Home Loans Fixed-rate home loans can be 10 years, 15 years or 20, but most popular is the 30-year because that makes your payment the lowest," says Kevin Guittman, owner of Colorado Home Loan Team, Colorado Springs, CO.

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On a fully amortized 30-year fixed-rate loan at 5.25 percent for $250,000, the payments would be $1,380 per month. Take that same loan out another 10 years to a 40-year note and the payments drop but only to $1,247 per month. You save $133 per month but it adds 10 years to your note with a net cost of an additional $100,000 or so.

Denver Colorado Home Loan Adjustable-rate mortgage

Unlike a fixed-rate home loan, which sports a static interest rate over the life of the loan, the interest rate on a Colorado home adjustable-rate mortgage, or ARM, changes every year.
ARMs come in various permutations. For instance, a hybrid ARM features aspects of both adjustable and fixed-rate mortgages.
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Kevin Guttman
Sr Mortgage Banker
Top Colorado Loan Originator
Financing Your Dream
Colorado Statewide
Colorado Springs, CO
877-251-9709
www.ColoradoHomeLoanTeam.com