Colorado Mortgage Calculator

Colorado Mortgage Calculator

Home loans are the most common way for low to average-income home buyers to finance a home in Colorado. On this page, we offer a convenient Colorado mortgage calculator to help you estimate your monthly payments, and up-to-date answers to several frequently asked questions about buying a home in Colorado.

Best mortgage lenders in Colorado

Colorado boasts a wide range of mortgage lenders operating across the country. Renowned names like Rocket Mortgage, Advanced Mortgage and Investment Co, and AmeriSave dominate the market. Several lesser known but trustworthy options include Colorado-based Colorado Mortgage Company, Integrity Mortgage & Financial Inc.

How to calculate mortgage payment in Colorado

Utilize our rapid and straightforward Colorado mortgage calculator to assess your prospective monthly costs. An elaborate, systematic guide is presented below.

Why and How to Use Our Mortgage Calculator

Employ our Colorado mortgage calculator for thorough planning of your forthcoming expenses related to housing. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Colorado.

The primary element is the cost of the property - that is, the amount you intend to allocate for your future dwelling. A down payment refers to the segment of this cost that you pay upfront. To avoid expensive insurance, it is necessary to provide a minimum of 20% down payment (in the case of a conventional loan). The remaining amount constitutes the principal (e.g., 80% of the home price with a 20% down payment).

The loan term signifies the duration required for the complete repayment of your mortgage through scheduled payments. Fixed-rate conforming loans typically have a maximum duration of 30 years, whereas adjustable-rate options often have shorter terms.

An interest rate represents a fixed or fluctuating percentage of the principal that you are obligated to pay over the loan's duration. It's important to mention that you are charged an annual percentage rate (commonly abbreviated as APR), which is not precisely equivalent to the interest rate. Although the interest rate comprises the majority of the APR value, the latter also includes various fees (e.g., origination fee, closing costs, insurance payments, etc.).

For a more precise evaluation, the interest rate used in these calculations is based on the current mortgage rates in Colorado, taking into account a $400,000 home price and a 10% down payment.

Colorado Housing Market 2023

In Colorado, the value of housing has witnessed a substantial surge in the previous year. This upholds an enduring tendency intensified by the COVID-19 crisis. Notwithstanding, the pace of growth has declined when juxtaposed with the preceding year, while both acquisition and restructuring rates have been on the upswing for a while and are predicted to soar even higher in the immediate future.

Median property taxes in Colorado counties

The property tax is another important thing to consider when selecting your future house. Many lenders insist on setting up a mortgage escrow account to ensure the borrower’s keeping up with the tax and insurance costs.

Source: American Communities Survey 2016, U.S. Census

How do I calculate my mortgage payment?

For your convenience, we suggest utilizing our Colorado Mortgage Calculator, which relies on a simple formula. Alternatively, you can manually determine the payment amount using the provided equation:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to ascertain it, divide your annual mortgage rate by 12);

N – loan term expressed in months (essentially, the total count of monthly payments)

Imagine you are considering a 15-year mortgage loan with a fixed 6.99% APR (equivalent to .0699 as a unit fraction). The house has a value of $500k, and you plan to make a down payment of 10% ($50,000). Therefore, the principal amount (P) will equal 90% of the initial home value ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Lastly, let's convert the loan duration from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

Consequently, your monthly payment will amount to approximately $4042.

Please bear in mind that the calculated M value is an approximation and does not encompass any additional fees.

Tips for first-time home buyers in Colorado

Initially, numerous federal agencies (USDA, FHA, and VA) provide assurances for loans aimed at selected borrowers. Several first-time home purchasers can explore alternatives that align best with their financial plan.

In addition to these government-guaranteed initiatives, it is valuable to consider certain offerings from CHC (Colorado Housing Corporation) accessible to individuals residing in Colorado. Specifically, first-time home buyers can make an application for FirstHome - a program that offers support with the down payment and closing expenses provided they fulfill the qualifications for an FHA loan and possess a FICO score of at least 660. This choice encompasses up to 6% of the loan amount towards the down payment and/or closing expenses. It is crucial to note that this option solely takes the form of a 30-year fixed-rate second loan. In the circumstance that you are ineligible for the FirstHome program, there is no reason to feel disheartened. Colorado Housing Score Loan serves as an alternate program covering up to 4%. The minimum satisfactory credit score required is 620.

Here are some valuable suggestions for newcomers:

1. Obtain pre-authorization in advance. This step will enhance your creditworthiness in the eyes of home sellers. It is strongly advised to acquire pre-approval letters not just from one, but from at least two or three different lenders.
2. Compare diverse mortgage rates. Select a minimum of three lenders. The greater the number, the better.
3. Perform preliminary computations based on the amount you have been pre-authorized for. Plan your forthcoming expenses.
4. Allocate as much as possible, and as early as possible, for a down payment. The down payment will decrease the principal amount, which in turn can lower your potential expenses. Hence, commencing early savings is crucial.
5. If you meet the criteria for a VA loan, prioritize this option above all.
6. Take into account government-backed schemes, as well as local assistance programs. There might be enticing offers – don't miss out.
7. Repay any prior debts if possible.