Denver Mortgage Rates

There are several factors to consider when you’re looking for a mortgage, each of which will help you decide what kind of mortgage is best for you. Depending on your circumstances, you might find that you qualify for more than one type of mortgage.

Hunter Lending offers four types of mortgages: conventional mortgages, FHA and VA loans, and jumbo mortgages. Each type of mortgage loan is designed for a different buyer, with different requirements, limitations, and mortgage rates.

First and foremost, most mortgages have a limit on how much money they can lend to a homebuyer. In Colorado, the 2020 limit on mortgages was $510,400, well over the median home value, which is just shy of $400,000. However, because of demand, many homes in Denver exceed that amount, which can limit the mortgage options available to you.

Current & Historic Rates

How Denver Mortgage Rates Are Determined

Lenders make several considerations when determining a mortgage rate, depending on how risky they judge a loan to be. The riskier they feel a loan is, the higher the interest rate will be.

When judging a loan’s risk, the lender will consider how likely you may be to fall behind on your monthly payments—or to stop making payments altogether. This also means the lender must consider how much money they stand to lose if you default on the loan.

When considering Denver mortgage rates, there are factors that you can affect and factors that are beyond your control. While it’s important to familiarize yourself with all aspects affecting your mortgage rate, you should focus especially on those factors that you can control yourself.

Factors You Can Control

For lenders, your credit score indicates how likely you are to make your mortgage payment each month. A higher credit score means you’re likely to get a lower mortgage rate, with the lowest rates going to homebuyers with a credit score over 740.

The loan-to-value ratio (LTV) measures the mortgage loan amount compared to the assessed value of the home, with a higher ratio typically leading to higher interest rates. For example, if you purchase a home valued at $100,000 for the assessed price and make a $10,000 down payment, your loan will be for $90,000. If you divide your loan amount ($90,000) by the home’s value ($100,000), you get an LTV of 90%. In general, the best rates are available to homebuyers with an LTV at 80% or lower.

It’s common for mortgage rates to change slightly depending on the location of the home. Mortgage rates in Denver, for instance, are probably different for buyers in other parts of Colorado, especially in rural areas.

Your lender may charge you more for certain circumstances that increase their risk. Among the more common reasons for a higher rate are loans on manufactured homes, condominiums, second homes, and investment properties, and for cash-out refinancing.

Factors Out of Your Hands

As a general rule, mortgage rates tend to rise when the economy is experiencing fast growth, higher inflation rates, and low unemployment. On the other hand, mortgage rates generally fall when the economy slows, inflation goes down, and unemployment rates rise. While you don’t have control over these factors, you can take advantage of them to secure the best rate possible.

While the Federal Reserve doesn’t set mortgage rates, they do have an indirect effect. When the Federal Reserve votes to raise or lower short-term interest rates, lenders may sometimes adjust their own rates up or down in response.

While the American economy is usually the biggest factor in setting mortgage rates, there are a number of unpredictable factors that can also have an impact. While global economic downturns and political upheaval may be on the other side of the world, they can still affect mortgage rates in Denver.

Mortgage loan rates in Colorado are constantly changing. That’s why it’s important to get a real-time quote, to make sure you’re getting the best rate possible. Contact Hunter Lending today to speak with a mortgage professional. We’ll help guide you through your options to determine what kind of loan is best for you and to make sure you get the best mortgage rates in Denver.

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Here Are More Details on the Four Loan Types We Offer

Conventional Home Loans

As the name suggests, conventional mortgages are standard home loans offered by most lenders. Because the government does not back them, they usually require a credit score of at least 620, although a score above 740 will get you the best mortgage rates in Colorado. Most conventional mortgages also require a down payment between 5 to 20 percent, with a higher down payment netting you a better mortgage rate.

FHA Loans

These mortgages, backed by the federal government, are intended to help make homeownership possible for low- and middle-income buyers. These loans typically have more lenient lending thresholds; you can secure a loan with a credit score as low as 500 and a down payment of 10%, although with a score of 580 or higher, you’ll only be required to make a 3.5% down payment. Because the government backs these loans, they typically have a lower mortgage rate than conventional mortgages.

VA Loans

Also a government-backed program, VA loans are intended for active service members, veterans, and their family members. These loans usually have lower mortgage rates than conventional mortgages, and they don’t require a down payment or mortgage insurance.

Jumbo Loans

If the home you’re buying is more expensive than the limit for conventional mortgages, you’ll need a jumbo mortgage. Because they’re larger loans, most jumbo loans require a larger down payment, usually around 25 to 30 percent. Homebuyers also need to have high credit scores, typically over 740 and will be required to show proof of 6 to 12 months of income. Finally, mortgage rates on jumbo loans tend to be higher, although depending on the lender, you can still get a competitive rate.

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