Rakhaet kuate

Denver Mortgage Loan Experts React to Colorado's Soaring Rates

Denver mortgage experts asserted their position on the mounting fixed mortgage rates in Colorado observed for the month of July following speculations that the rates may even go higher. Even with such a bleak prognosis, the mortgage specialists doubt the wisdom of going for adjustable-rate mortgage (ARM) home loans without considering other factors.

 

Denver, CO -- (SBWIRE) -- 08/02/2013 -- Denver mortgage experts asserted their position on the mounting fixed mortgage rates in Colorado observed for the month of July following speculations that the rates may even go higher. Even with such a bleak prognosis, the mortgage specialists doubt the wisdom of going for adjustable-rate mortgage (ARM) home loans without considering other factors.

They warned prospective borrowers of the pitfalls of hasty decisions just because mortgage rates spike with the rhetorical question: Do you know how rising rates affect your finances? Panic for securing the swiftest available loan program that allows you to stretch and borrow more would most likely work against your advantage. The thing is, ARM home loans actually have a downside such that when the interest rates rise up in general, the interest rate on loans as well as monthly payments also tends to rise.

From their long years of consulting experience in home loans, the Denver mortgage specialists maintain that during most time periods, if rates rise more than one or two percent and the trend persists, ARM home loans will most likely cost borrowers more than a fixed-rate loan. Nevertheless, they argued that there are circumstances when hybrid loans make a better choice.

They claim that if borrowers expect to pay their loans within five to ten years, then hybrid or intermediate ARM loans with a fixed interest for the first five to ten years of the loan is a much better choice as compared to regular ARM loans. The hybrid loan, according to them, offers more stability in the monthly payments than the regular ARM loan.

As a general rule, the Denver mortgage specialists explained that the longer the interest rates are locked in for ARM home loans, the higher the initial rate is. Comparing their numbers with 30-year fixed mortgage rates, they emphasized that the initial rate of a hybrid ARM is almost always lower. However, they closed their statement with a clarification that initial interest rates are naturally higher for the hybrid ARM than for the regular ARM loan.