In a previous blog we broke down all the components of your monthly mortgage payment and talked about ways you can save on the cost. Here, we discuss more ways to save on your monthly payment.

More Ways You Can Save Money on Your Monthly Mortgage

Mortgage Insurance

What is private mortgage insurance? Put simply, private mortgage insurance (PMI) is a policy that protects the lender should you default on your loan. You pay the cost for the policy wrapped up in your monthly mortgage payment. A lender will require a mortgage insurance policy when you put less than 20% down on a conventional loan. If you are obtaining an FHA loan, this payment is sometimes called a mortgage insurance premium (MIP), and you are required to pay it regardless of how much you put down.

You can avoid PMI with a conventional loan by putting 20% or more down on the purchase price of your home. This will save you from the added cost to your monthly payment. If you are unable to put that much down, know that PMI is temporary. Once you’ve paid 20% of your loan off, you can request the PMI be removed. A lender is required to remove it once your equity reaches 22% of the purchase value, but it’s always a good idea to keep an eye on it just in case they need a reminder.

When it comes an FHA loan and MIP, there are two scenarios. If you put less than 10% down, the MIP will be in place for the life of the loan. The only way to remove it is to refinance into a different loan type, such as a conventional loan. If you put 10% or more down, the MIP is dropped after 11 years. You can refinance into another loan type before the 11 years passes to reduce the number of years you spend paying MIP. Either way, most people end up refinancing to avoid further premium payments.

Refinancing

Speaking of refinancing, make sure you understand the costs to refinance and the new interest rate you will have. When you refinance, you are trading in your old loan for a new loan. The goal is to capture a better interest rate and terms than your current loan. You do not have to stick with your current lender to refinance. Refinancing can lower your payments but do so only if the cost to refinance makes sense. Your income, debt, and credit score are all considered in calculating a refinance. If there have been significant changes to your financial status, this can affect the closing costs and interest rate for the new loan. Be sure the benefits outweigh the cost before refinancing.

Recast Your Loan

Instead of refinancing, you can recast (or re-amortize) your loan. This option is typically only available for conventional loans (sorry FHA, VA, and USDA loan holders) and not all lenders offer it. Recasting a loan involves putting down a large lump-sum of money toward the principle. The lender then recalculates monthly payments based on the new principal balance. You keep the same interest rate and loan term, but your monthly payment will go down because you now owe less money on your loan.

This is an especially helpful option when you buy a new home before your old home sells. Once your old property is sold, you can use your proceeds to recast your loan on the new property and lower your monthly payment. Each lender is different, so make sure you understand the requirements of recasting your loan with your current lender.

Assumable Loan

When shopping for a new home, consider an assumable mortgage with a lower interest rate. FHA and VA loans (and some conventional loans) are assumable, meaning a buyer can take over a seller’s existing mortgage balance. To assume a loan, you need to qualify for the seller’s existing loan. Additionally, you’ll need to pay the seller their equity at closing in place of a down payment. For instance, if the purchase price is $400,000 and the seller owes $350,000 you will need to bring $50,000 to closing. This is called a gap payment.

Some lenders offer secondary loans to bridge this gap payment, but they may cap how much of the gap they will loan. If getting a secondary loan, you will need to qualify for both the assumable loan and the secondary loan. Make sure you understand the terms and repayment of a secondary loan before going this route.

If you have the cash to pay the gap and qualify for the existing mortgage, then you can take over their monthly payments from where they left off in the life of their loan. If the seller had a 30-year mortgage and paid five years into the loan, your assumed loan will only take 25 years to pay off. You keep the interest rate, have a shorter loan term, gain instant equity, and closing costs are less to boot.

You do not have to be a veteran or active military to assume a VA loan. However, some VA sellers may need a VA buyer to substitute their VA eligibility for an assumption. Anyone can assume an FHA loan if they qualify. Assuming a loan can save you thousands of dollars in both the short and long term of a home purchase.

Wondering Which Is Right for You?

Reach out to learn more about refinancing, recasting, and assumptions. We can put you in touch with trusted lenders who are knowledgeable about these options. Live Dream Colorado is well versed in assumptions and can help you find the right home for the right price. When You Buy or Sell with Us, the Power Is in Your Hands.

Most people like to save money when possible. Whether you’ve bought a house or are looking for a new home, you can save on your monthly mortgage payments as well. First, we’ll breakdown your monthly payment into parts and define each component. Then, we’ll talk about ways you can save money on each component to lower your overall monthly payment.

PITI – Your Monthly Mortgage Payment Breakdown

Your monthly payment consists of PITI: Principal, Interest, Taxes, and Insurance. Principal refers to the amount of money you borrowed, and interest refers to the interest to be paid on the borrowed amount. When taking out a loan, most people escrow their property taxes and home insurance premiums with their lender. Escrow is a legal arrangement that allows a third-party to hold onto funds from one party before they are passed on to another party. In this case, your lender will hold onto the funds intended to pay your taxes and insurance and pay them when they come due. To ensure there is enough money to pay for taxes and insurance, the totals are divided by twelve to calculate what you owe monthly. That monthly amount is then added to your monthly principal and interest.

Ways You Can Save Money on Your Monthly Mortgage

Principal and Interest

This is the obvious place to start when looking to save money on your monthly payment. Shopping for a home based on what kind of monthly payment you can comfortably make can help you save and stay within your budget from the get-go. If your dream home is a little outside your preferred monthly payment, a larger downpayment can help reduce the amount of money you need to borrow. A bigger downpayment can also improve your interest rate, as lenders will see you as less of a financial risk.

As well, you can buy down your rate with any extra cash you may have or use seller concessions to buy down your rate to save on interest payments. If you’ve already purchased a home, making extra payments on your principal will help you to pay off your loan faster. This will also reduce the years and amount of money you spend towards interest payments.

Property Taxes

El Paso County property values are reassessed every two years. These assessments are based on the market activity within the area or neighborhood to adjust the value of property. This assessed value is what you pay taxes on. Some homes are in special taxing districts, while others may be subject to special tax exemptions (such as senior or military tax exemptions) that won’t carry over to the next owner. Since property tax is a component of your monthly payment, it’s best to research and understand the tax districts your potential new home is subject to. Shopping for homes in neighborhoods where the taxes fit your budget will help you reduce the overall cost of your monthly mortgage.

For current homeowner’s, keep an eye on your property taxes. You can contest your property tax amount with the El Paso County Assessor’s office. The County Assessor’s office will review recent home sales of similar properties to yours to assess your property value. Be aware, however, that if the county does not find evidence to support reducing their property value of your home, your taxes won’t be lowered.

Metro Districts

Metro districts are a type of special taxing district. Costs to build infrastructure of new subdivisions (roads, sidewalks, lights, sewers, water and utility lines, etc.) is passed to the homeowner by adding them to the purchase price. In today’s economy, this could make new homes in larger new subdivisions unaffordable. To offset that cost from the purchase price, metro districts can form and charge a specialized tax on the new homeowners to pay those fees and infrastructure costs over time. Once paid off, the metro district should be able to dissolve if that was its sole function.

You’ll find homes in metro districts have noticeably higher taxes. When home shopping, pay attention to whether properties of interest are in a metro or other special taxing district. Purchasing a home that is not part of a special taxing district can help you save on property taxes, and ultimately your monthly mortgage.

Homeowner’s Insurance

Your homeowner’s insurance premium is wrapped into your total monthly mortgage payment. So, shop around for homeowner’s insurance! Different providers offer different types of coverage at different rates. Be sure to understand the policies each insurance company offers, their costs, and your out-of-pocket costs should you need to make a claim.

Homeowner’s insurance is paid one full year in advance, typically collected at closing. There will be additional months’ worth of insurance payments collected at the same time to go into the escrow account. Make sure you know what those costs are and how they will affect your total closing costs.

You will notice your insurance premium increase over time. This occurs due to rising costs in the insurance world. However, you don’t need to stick with the same insurance company. If the premium cost is getting too much, shop for a different agency – but don’t sacrifice the coverage you need for the sake of lowering the cost; you might just need it one day. You may also be able to negotiate the premium with your current insurance company. If the fear they’ll lose you as a customer, they may just offer to lower it.

Live Dream Colorado Helps You Save

When you buy a home with us, we make sure you understand the costs associated with your home purchase. We refer lenders we trust to help you budget for your home purchase and we work closely with your lender so there are no surprises about your monthly payment. Reach out to learn more about how we work for you!

What Is Radon?

For those who remember their days in chemistry class, radon is an element that appears on the periodic table of elements. Radon is a naturally occurring colorless, odorless, and tasteless gas. When uranium, thorium, and radium (other naturally occurring elements) break down in soil, rocks, and water, radon gas is formed.

As a gas, radon can seep up through the ground and enter homes through cracks in foundations, walls, and porous materials. When radon decays, or breaks down, it produces radiation. The gas and radiation can become trapped inside buildings where the air does not circulate as well as the outdoors. Breathing in radon gas can have serious health consequences. According to the CDC, “Radon is the second leading cause of lung cancer deaths in the United States after cigarette smoke.”

In Colorado Springs, we have a lot of granite in our soil. As the granite rock decays it releases radon. Some homes have a higher exposure than others based on the composition of the soil underneath. Your home could have a high reading while your neighbor has a relatively low reading. When you buy a home with us, we will always recommend you add a radon test to your home inspection.

Who Can Test for Radon?

At-home radon test kits can be purchased online and in hardware stores. However, we highly advise everyone to use a professional. To test for the presence of radon an inspector must be certified by the National Radon Proficiency Program (NRPP) or the National Radon Safety Board (NRSB). Many, but not all, home inspectors offer radon testing as an add-on service to your home inspection. We refer home inspectors who are certified so you know you are working with a trusted professional.

How Is Radon Mitigated?

Radon is mitigated (or reduced) by the installation of a radon mitigation system. This system is often installed at the location of a sump pump. If there is no sump pump, a hole is dug inside a crawlspace or into the foundation. A pipe runs from the opening in the ground out through an exterior wall, often to roof height. The ground hole is then sealed to prevent radon gas from leaking up through the opening. The exterior penetration site is also sealed to prevent water and pest instruction.

Fans inside the system suck in air and gases from the ground under your home and push them through the pipe to the outside of your home. This prevents high amounts of radon from leaking into your home and becoming trapped where you can breathe it in. If installing a system after the purchase of your home, we can recommend radon mitigation companies who will do the best job of installing a safe and secure radon system.

When to Take Action

Radon gas is found both indoors and outdoors. Although you can’t remove all the radon from your home, you should aim to have the lowest possible reading. The EPA (Environmental Protection Agency) recommends installing a mitigation system if the radon reading is 4.0 picoCuries per liter of air (pCi/L) or higher.

During a radon test, the inspector will set up a machine that will take samples of the air every hour for 48 hours. It is important to keep windows and doors shut during this time to not compromise the air samples. Radon readings are typically higher in the Winter when homes are more closed off from outside air. The samples are then sent to an approved lab for testing. If the average reading comes close to or is above 4.0 pCi/L you should install a radon mitigation system.

Do You Need to Test for Radon?

No one requires you to have a radon test – but we highly encourage you to. Given the health risks involved with exposure to radon gas we always recommend our clients hire a professional to test for radon. If the result is higher than the EPA minimum, we can negotiate with the seller to have a radon system installed. Negotiating seller concessions for the future installment of a radon system is another option if you’d like to hire and oversee the work yourself. Either way, we will get you what you need to feel safe and comfortable in your home.

Trusted Service Providers

We only work with service providers who provide the best quality experience for our clients. Whether you are in need of a home inspector, sewer scope, radon test, or anything else, we’ve got you covered. Ready to talk about home buying? Contact us to get the conversation started!

Shop For Home Insurance

Finding home insurance coverage is a very important part of the home shopping process. In fact, there is a homeowner’s insurance contingency built into the Colorado purchase contract. If you cannot find coverage that is suitable to you, your lender, and/or your wallet, you can back out of the home purchase before the contingency deadline. Different insurance providers offer different coverages, but what should your homeowner’s insurance cover?

Fire

Fire and smoke damage is a typical event covered by insurance – if you don’t set your house on fire on purpose (seriously, don’t do that). Some policies will even pay for your lodging while the damaged parts of your home are rebuilt. In Colorado Springs, wildfires are a possibility. Choosing to live in an area of town (or out of town) more prone to wildfires may increase the cost of your policy. Research your risk of wildfire when you home shop and talk with your insurance company on how to manage your risk. Fire mitigating your property – that is, reducing your property’s risk of damage by wildfire – can help reduce the cost of your home insurance.

Roof

Leaks or damage to your roof is conditionally covered. If your policy has hail or storm damage coverage, and the roof was damaged because of such an event, insurance will typically pay for the repairs or a new roof. But if the damage or leak was a result of a lack of maintenance, insurance won’t cover it. Hail is another common occurrence in Colorado Springs, and some communities that have seen significant upticks in hailstorms are having a harder time getting affordable coverage. Climate change has increased the number of and strength of storms throughout the world, and insurance companies are being more selective in what and how much they will cover. Hail, wind, and storm damage must be reported within one year of the damage in order for many insurance policies to cover the cost of repair or replacement.

Theft

If your home is broken into or vandalized, your insurance will typically cover the loss up to a certain amount. Any extremely valuable items, like jewelry or art, may need their own separate policies as their value often exceeds what a homeowner’s policy would cover. Security systems and home safes can help deter thieves from targeting your home. When going on vacation, or if your home will be vacant for a time, use timers on your lights to make it look like someone is home. Home thefts tend to spike around holidays. Let a neighbor or someone you trust know you are going out of town so they can help keep an eye on your home.

Flood

Insurance companies are also being more selective when it comes to flood damage. If you live in a flood zone, you are required to have flood insurance when getting a federally backed loan (FHA, VA, Freddie Mac or Fannie Mae loans). Flood insurance is not covered in a standard insurance policy. You will have to buy flood insurance separately. What if you don’t live in a flood zone or near a floodplain, but your house happens to flood after an unusually big rainstorm? Will standard insurance cover the damage? Unfortunately, no. Most standard policies only cover water damage that occurs from the inside of your home (such as a busted pipe) and not water intrusion that came in at ground level from the outside.

Foundation

If you are having water intrusion in your basement, you may need to have your foundation checked. Foundation damage is only covered if caused by a storm, fire, or other event that is covered by standard insurance. Age, lack of maintenance, faulty construction, flood, and earthquake damage are not covered by a typical insurance policy. Just like flood insurance, earthquake insurance must be purchased separately. It is important to maintain your foundation, especially in older homes, as foundation repairs can be costly.

Sewer

Sewer repairs can also be costly. Though not typically covered, some policies can have a sewer rider added to cover sewer line breaks and back-ups. When purchasing a home, it is a good idea you have the sewer line checked for breaks, cracks, bellies (or sags), and blockages. Some home inspectors have sewer inspections as an optional add-on, and we always recommend it. If there are defects in the sewer line, we can negotiate with the seller to have them make repairs.

Find The Right Coverage

So, what should your home insurance policy cover? It depends on what risks your home comes with and what you can afford. Different parts of town come with different insurance needs and premiums – indeed, it can vary from property to property even within the same neighborhood. Once you find your dream home, talking to different insurance companies will help you better understand the risks and costs of insurance associated with the property.

COLORADO SPRINGS, CO – JUNE 12, 2025

Quarter Over Quarter, Year Over Year

At of the end of the first quarter, Colorado Springs rates #48 out of the top 100 MSAs for increase in home values over the year. According to the Federal Housing and Finance Authority (FHFA), the home prices in our area rose 4.2% over the past year. This is greater than the national average of 4%. A home purchased in our metro area a year ago would resell today for 4.2% more than its sale price last year. In the last quarter alone, Colorado Springs house prices rose 2.3%. Meaning buyers paid 2.3% more for a home in the first quarter of 2025 than they did in the last quarter of 2024. That is more than three times the national average for the last quarter!

Annual Appreciation

The graph below shows an accumulated appreciation of home value year-over-year. Over the past ten years (2005-2025), home values have appreciated 149.8% in Colorado Springs. This means a house bought in 2005 more than doubled in value over the last decade! We saw a slight depreciation in the last quarter of 2024 equating to a teeny-tiny dip in home value of less than one percent. The first quarter of 2025 saw a positive appreciation of 2.26%. Between 1992 and 2025, there was an average annual appreciation in house prices of 5.6% in our market area. If you bought a Colorado Springs home sometime over the last 30 years, your property saw an average appreciation of 5.6% each year!

We Work With You

Whether you are looking to buy or sell a home in Colorado Springs, we will work with you to meet your needs and achieve the best value for you. Contact us today to find out more!

LOCAL REALTOR^® AWARDED RENE CERTIFICATION

Colorado Springs, September 19, 2024 – Jay W L Collier with Live Dream Colorado, has been awarded the Real Estate Negotiation Expert (RENE) certification, the premier negotiation credential in the country. The RENE is conferred by the Real Estate Business Institute (REBI) and is an official certification of the National Association of REALTORS^®. Jay joins an elite group of real estate professionals from around the world who have earned the RENE certification. All were required to successfully complete comprehensive coursework in negotiation and subscribe to the REALTOR® Code of Ethics.

Negotiation is the heart of a real estate transaction. The goal of negotiation is to get you all of what you need and most of what you want. Working with a skilled negotiator will give you the upper hand in buying or selling your home for your best price and terms. Jay has successfully negotiated new roofs (some to include Class IV shingle upgrades), radon mitigation system installations, price reductions in lieu of repairs, and seller concessions to cover closing costs and/or a rate buydown. Jay is dedicated to ensuring you receive the best service and are more than satisfied with your property purchase or sale.

RENE is wholly owned by REBI and focuses specifically on real estate sale negotiation. Formerly the Council of Real Estate Brokerage Managers (CRB), REBI is a not-for-profit affiliate of the National Association of REALTORS^®. You may contact REBI by calling 800-621-8738, e-mailing info@rebinstitute.com, or visiting REBInstitute.com.