Colorado Springs Mortgage Rates and Closing Costs – What Should you Focus On?

Colorado Springs Mortgage Rates and Closing Costs – What Should you Focus On?
Colorado Springs Mortgage Rates and Closing Costs – What Should you Focus On?

When you’re applying for a mortgage, you have many factors to consider, but most important are the mortgage rates and closing costs.

Colorado Springs mortgage rates today are lower than they’ve been in decades, but what about closing costs? Should you focus on one over the other?

How does the Interest Rate Affect your Payment?

The interest rate is the fee you pay to borrow the money. Lenders charge the rate based on the current market rates and adjust according to your risk factors. If you have great credit, for example, you’ll get a better interest rate than if you have a low credit score.

You pay interest based on the amount of your outstanding principal. Initially, you’ll pay much more interest because you’ll have a higher loan balance than you will as you pay the loan down through the years.

What are Closing Costs?

Closing costs are fees you pay upfront to close the loan. They cover the lender’s costs of processing and underwriting the loan. Many factors go into underwriting a loan including an appraisal, title search, title insurance, and evaluating all of your qualifying factors.

Closing costs cover these expenses. Each lender charges a different amount and type of closing costs. Some lenders bundle all their costs into an origination fee and others itemize it.

The closing costs are what you’ll pay upfront – you pay them one time and don’t pay them again.

Should you Focus on Mortgage Rates or Closing Costs?

It can feel confusing when you’re looking at Colorado Springs mortgage rates and closing costs. Which do you focus on and/or negotiate? Does it make a difference?

While it’s ideal to get the lowest interest rate and closing costs, there are a few factors that should affect your decision:

  • How long will you live in the home? If you are buying a home to live in for only a couple of years, the interest rate isn’t as important. You’ll only pay it for a few years, so if it’s slightly higher it won’t make that much of a difference. Now if you were paying the interest for 15 to 30 years because you plan to live in the home long-term, it could make a difference of thousands of dollars.


  • How much can you afford? If you’re at the limit of what you can afford, even a 0.5% higher rate can make the difference between approval and denial. If it’s that close, focus more on the interest rate than the closing costs.


  • Do you have money for closing costs? If you don’t have money to buy your rate down or cover a large number of closing costs, you may consider taking a slightly higher rate and having fewer closing costs. The loan payment will be higher, but you’ll need less money out of pocket.

Final Thoughts

When you’re looking at Colorado Springs mortgage rates and closing costs, look at the big picture. Think about what you can afford monthly and over the life of the loan and find the right balance. If you’re unsure how to balance the two or which loan is right for you, contact me today and I’ll guide you to the mortgage product that will serve your personal financial needs.

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