COVID-19 and Refinancing: Getting Access to Your Home Equity

COVID-19, also known as coronavirus, has changed everything. We’re all making the necessary changes and adjusting to the uncertainty and general weirdness that this virus has caused. While even financial experts are unsure about what will happen next, there are a few clues that we can hone in on to prepare mortgage-wise for the upcoming months.

With mortgage rates dropping, is it still a good time to refinance during the pandemic?

Here’s what you need to know about refinancing amidst the 2020 pandemic. 

What Usually Happens When Mortgage Interest Rates Fall

COVID-19 has disrupted the market in unique ways. We’ll discuss those ways in just a moment, but first, let’s look at what usually causes mortgage rates to drop and what the typical response is.

What we typically see when people are uncertain about the future of the economy is that they move their higher investments like stocks into lower-risk investments like bonds.

Now, the mortgage-backed securities (MBS) is a major investment that is backed by the monthly mortgage payments and these securities are sold in the bond market.

MBS tends to be in higher demand when people move into the bond market during times of uncertainty. And when the demand for the securities is high, the rate of return doesn’t have to be. The result is usually lower mortgage rates.

However, the current situation with COVID-19 is different.

COVID-19 And Mortgage Rates

COVID-19 is causing the market to be more unpredictable than it typically would during a crisis. Here are a few reasons why the market is reacting this way:

1. Headlines – News headlines, whether good or bad, has the potential to change the course of the market. With news about COVID-19 changing so rapidly, you can see how making predictions can be difficult.
2. No Certain End – While government and medical agencies are working towards bringing this to an end, no one truly has an idea of when it will end. In these types of situations, the result is usually investors moving their money out of financial markets and into things like precious metals. This action can drive mortgage rates up.
3. Lender Response – Since rates are changing so much, it’s a bit riskier for lenders locking in rates. So it may be possible that you end up paying a bit more to lock in your rate. Also, since the rates are so low, thus driving up the demand to refinance, lenders may inch their interest rates a little higher. This is not always the case but something to be aware of.

Here is another important fact to note: The mortgage process is considered an ESSENTIAL financial transaction.

Housing Plays A Significant Role In The Economy

Since housing is so significant to the economy, the Federal Reserve sometimes intervenes to stabilize it by buying up lots of MBS. This action helps to keep mortgage interest rates low and encourage people to buy homes.

Although we don’t know all of the details of the recently passed a $2.2 trillion aid, the Feds have several courses of action to keep mortgage rates at a favorable level for homebuyers and homeowners. They stated that in addition to an emergency rate cut, they would do as much purchasing in the financial markets as is necessary to help ward off any economic downturn caused by the virus.

Should You Refinance During The COVID-19 Pandemic?

Here’s what it boils down to: Rates are still low, your home is your most significant financial investment, and your home equity can provide financial stability you need in times of trouble.

There are still many things to consider before deciding definitely if this is the right more for you. So we encourage you to contact us today to set up a consultation. The sooner we get started, the sooner you have access to your home equity.

How Can We Help You Gain Financial Stability?

The mortgage process is considered an ESSENTIAL financial transaction and critical to the economy. Rest assured that our office is equipped and connected with everything you need to expedite your loan and answer your questions.

 

 

Stay Tuned…

What To Do If You Can’t Pay Your Mortgage During the Coronavirus Crisis

The CARES Act eases the financial burden on homeowners with government-backed loans. Homeowners with these loans and have lost income due to the COVID-19 can suspend mortgage payments for up to 12 months. This law also pauses foreclosures, foreclosure-related evictions, and changes credit reporting during the health crisis.

In the mortgage industry, we call “pausing payments” forbearance. Read on to learn how you may benefit from the CARES Act.

The CARES Act and Your Mortgage

The new law only applies to mortgages that are:

• Backed by the Federal Housing Administration (FHA)
• Included under sec. 255 of the National Housing Act
• Included in sec. 184/184A of the Housing and Community Development Act of 1992
• Backed by the Department of Veterans Affairs (VA)
• Backed by the Department of Agriculture (USDA)
• Held by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation 

About Forbearance under the CARES Act

The CARES Act states that if you are experiencing financial hardship due to Coronavirus, you can pause payments for up to 180 days plus have the option to extend it for another 180 days.

If you’re a landlord of a multifamily property (5+ units), you have similar protection. You can pause payments for 30-days plus request additional two 30-day extensions.

How to Request Forbearance

To pause your payments, you’ll need to submit a request to your servicer –that is, the lender you make mortgage payments to. Within the application, you’ll need to affirm that the hardship is due to COVID-19. Note that no further proof is required.

The rules for landlords are a bit different. Your payments must be current as of Feb. 1, 2020, to qualify.

What Happens During Your Forbearance 

During the forbearance period, you won’t be charged any penalties, interest, or fees that you would have been charged had you made your mortgage payment as usual.  

Landlords may also not charge their tenants any late rent fees during the forbearance period granted to the landlord.

No Reporting to Credit Bureaus

The CARES Act also states that lenders shall not report late or missed payments to the credit bureaus if your mortgage is in one of the forbearance programs. 

This rule applies through July 25, 2020, or 120 days after the end of the crisis period, whichever is later. 

No Foreclosures or Evictions

The CARES Act also protects from eviction. Your loan servicer cannot initiate a foreclosure or foreclosure-related eviction action before May 17, 2020. 

Additionally, landlords cannot evict renters during their forbearance. 

What If Your Loan Is Not Non-Government Backed?

Many non-government-backed lenders have adopted policies to assist during this crisis period. To find out, you’ll need to contact your lender directly. 

Don’t Just Stop Paying Your Mortgage

Whether your loan is from a private lender or government-backed, never abruptly stop making payments. If you stop making payments and your loan is not in forbearance, you could damage your credit and be subject to fees. In the worst-case scenario, you could face foreclosure and eviction.

Another option, one that is long term, is to refinance your current loan. The feds have also provided relief in the form of lowering interest rates, which has also dropped mortgage rates. Contact us today to see how much you can save by refinancing your current loan!

 

Stay Tuned…

Staying Safe from COVID-19 Scams

It’s unfortunate but familiar –crisis makes people more vulnerable to scams. And with this unprecedented COVID-19 crisis, scammers are sure to be lurking close by.

Save and share this information to help avoid potential fraudsters in their tracks.

Five Potential COVID-19 Scams to be Aware of Phone Scams 

Fraudsters may call pretending to be from an official public health agency stating they have urgent COVID-19 test results. They may ask for you to share personal and financial information to “authenticate” your identity before they share the results. They may also say that the person has tested positive, and they need financial information so that you can pay for a prescription.

Stay safe tip: It’ is best not to answer calls from unknown numbers. But if you do, don’t share nor confirm any personal or banking information over the phone until you validate that the caller is legitimately from the agency they claim to represent.

Text Scams

Scammers may send text messages with a link. It may appear to be from a health agency or charity or even from a financial institution. It can say to follow the link to get test results or a free mask or to claim your stimulus check.

Stay safe tip: Don’t reply to text messages and delete it immediately. Always go to the official website of the institution for accurate information.

Door-to-Door Scams

Scammers may even arrive at your doorstep, claiming that they are giving or selling home tests to detect COVID-19. Their goal can be either to sell you a fake test or unapproved drugs — or worse yet, a home invasion.

Stay safe tip: Currently, there are no home tests available. Only hospitals and health professionals can perform the tests. As a general rule, don’t answer open the door to someone claiming to sell anything from a public health agency or claiming to be a health professional.

Phishing Emails

You may receive an official-looking COVID-19 phishing email that appears to be from the government. It may be labeled as an “urgent” and ask you to open a malicious attachment or to provide personal or financial information to confirm your identity.

Stay safe tip: Phishing emails can be hard to detect. Sometimes even the return email address will look official. Just like texts, always go to the official website of an institution for accurate information.

Job Scams

Fraudsters may hire under various mysterious guises like “financial agents” or “mystery shoppers.” This scam can be as simple as asking you to pay a fee to apply. But it can be complicated if it’s part of a money-laundering scheme.

Stay safe tip: If it sounds too good to be true (or too suspicious), it’s likely a scam. Any authentic job wouldn’t ask you to pay out-of-pocket for an interview and never give bank information to people you don’t trust.

Staying safe is during the COVID-19 crisis is most certainly about your health, but it also means staying safe from scammers. Please save and share this information.

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Stay Tuned…

Mortgage Rates are at an All-Low –Should You Refinance?

With mortgage rates at an all-time low, we’ve been refinancing many home loans, helping our clients to restructure their finances and saving them money in the process.

Are you also considering refinancing your current mortgage for the first time? Here are some of the questions get about refinancing. 

And remember that we’re always available to answer your questions personally. 

Reasons to Consider Refinancing

Let’s first explore the reasons that you would want to refinance. The primary reason homeowners refinance their mortgages is to lock in a lower interest rate, as we mentioned above. This means saving money! It could mean that your monthly payment is lower or that more of the payment goes toward the principal instead of the interest. 

Or the savings could be compounded over the life of the loan. Here some other ways that you could benefit financially by refinancing your mortgage:

• To remove your private mortgage insurance (PMI)
• To reduce the life of the loan by refinancing into a 15-year loan instead.
• To switch from an adjustable mortgage rate to a fixed loan
• To access the equity from your home

With that said, here are other things that first-timers should consider when refinancing.

There are fees associated with refinancing. Similar to your first home purchase, there are fees, taxes, and closing costs with getting a new home loan. Since there are fees, it’s important to asses the break-even point –that is –the point where the monthly savings created by refinancing offsets the cost of it. We can help you determine what this break-even point is, but as a general rule, the break-even point should be in about 2 years after refinancing. 

That means that the cost of the refi should be equal to the savings of the refi at the two-year mark.

Your credit score still matters in refinancing. Just like your credit score determines the rate you qualified in your first mortgage, it will also determine the rate you get this second time around. That’s not to mean that you shouldn’t refinance if your credit score is lower than it was before as there are other factors we look at, and it may not be worth the risk to improve your rate before refinancing. Interest rates can change fairly quickly, and they’re currently the lowest we’ve seen in several years. There’s no telling how long they’ll remain this low.

You can refinance your government-backed loan. Depending on your situation, yes, you can refinance your FHA, VA or USDA loan. One of the most popular options is the streamline refi programs. With a streamlined program, you reduce or eliminate much of the income, credit, or appraisal requirements found in standard refinance programs. One thing to note is that streamline refi’s don’t always allow a cash-out option. 

 

COVID-19 May Make Your Mortgage More Affordable

First off, we want you to know that we’re in this crisis together. Sure, we’ve made adjustments to accommodate the “temporary new normal,” but still, know that we’re here for you more than ever before!

And that includes watching the market to find opportunities for your home-ownership goals and financial goals. While there is much uncertainty about the market, there is a notable trend that is a silver lining despite recent events.

Here’s what you need to know about COVID-19 and how it may benefit your home loan.

But first, a little background on what’s been going on in the market. This past Sunday, the Federal Reserve announced that it was slashing its benchmark rate to essentially zero. While mortgage rates aren’t tied to that rate, they tend to follow a similar track. So does this mean we could see 0% mortgages any time soon? Not likely.

However, we could very well see rates for a 30-year fixed mortgage drop massively low –possibly even below 3%!

Here’s another thing to note: despite mortgage rates flexing quite a bit over the past few weeks, overall, they’ve been low. Even with the influx of nationwide refinancing (that typically pushes rates up), mortgage rates are likely to drop.

Is NOW a good time to buy a home despite the COVID-19 crisis?

It depends on a few factors. But whether you are buying a “forever home,” meaning that you plan to live there for more than five years, or a starter home, buying now makes perfect sense.

Current rates are some of the lowest we’ve seen in years. So if buying a home was already part of your plan, you’ve already set aside your down payment, and finances continue steady, then purchasing a home now is the perfect way of keeping your housing costs low.

Something else to keep in mind is that house prices may start to drop as well. Homeowners looking to sell their homes quickly will list them at more competitive prices.

When combined with the low rates, you can see how buying a house now can be the smartest way to invest your money while providing a sense of security for your family.

There’s no doubt that we are in a white-hot real mortgage opportunity. But there’s no telling how long it will remain this way. Apply today and lock your rate! Your pre-approved letter is valid for several weeks, giving you time to shop for the ideal home for your family.  Click here to apply online now.

Insider Tips for Qualifying for a Home Loan with Student Loan Debt

When you first took out your school loan, you did it to open more opportunities. Unfortunately, having a significant amount of school debt can challenge those opportunities. If you have a considerable amount of school debt and are left wondering how you can still qualify for a home loan, this article is for you!

The insights we’re about to share with you will help you get a better idea of how to manage your school loan as well as show how it’s possible to be a homeowner despite having student debt.

How Student Loans Affect Your Home Loan Approval

The first thing to clarify is that student loans themselves don’t prevent you from getting a home loan. However, the debt of student loans can affect your debt-to-income ratio, and a poor DTI can prevent mortgage approval.

So if your monthly student loan payments are high, but you have no other debt, and your income is fair, your chances of getting approved for a home loan are favorable. On the other hand, if your student loan payments are only part of several other monthly debts, then getting approval may more difficult. 

Here are other factors, besides student loans, that also affect your mortgage approval:

Credit Score:

Your credit score not only determines whether you qualify for a loan, but it also determines the interest rate. The excellent news is government-backed FHA loans have more flexible qualifying terms, and you may be able to get this loan with a credit score as low as 500.

Downpayment:

If your downpayment is sizable –meaning 20% or more –then your student loan debt is less of a determining factor. 

Income:

We’ve talked about one of the concepts of DTI –debt. But income is also a critical factor, and that may counteract some of your student debt. In other words, school loan debt from graduate school doesn’t weigh as heavily thanks to your ability to earn more income thanks to your graduate degree. 

How To Qualify for a Mortgage with Student Loan Debt

Has your student loan disqualified you from getting a loan? Not to worry! Qualifying for a mortgage is just a few payments away –that is, a few extra payments toward your student loan. 

Minimizing spending in areas like entertainment or taking on a side hustle are ways that you can gather the extra funds to pay down the debt quickly. Plus, since there’s no penalty to paying off your loan early, the only thing you have to gain is better credit and a better DTI!

Don’t let student loans stop you from owning a home! Qualifying is closer than you realize. In fact, you may already be there! Call us to find out which mortgage loans your qualify for. 

COVID-19 and Refinancing: Getting Access to Your Home Equity

COVID-19, also known as coronavirus, has changed everything. We’re all making the necessary changes and adjusting to the uncertainty and general weirdness that this virus has caused. While even financial experts are unsure about what will happen next, there are a few clues that we can hone in on to prepare mortgage-wise for the upcoming months. 

With mortgage rates dropping, is it still a good time to refinance during the pandemic?

Here’s what you need to know about refinancing amidst the 2020 pandemic. 

What Usually Happens When Mortgage Interest Rates Fall

COVID-19 has disrupted the market in unique ways. We’ll discuss those ways in just a moment, but first, let’s look at what usually causes mortgage rates to drop and what the typical response is. 

What we typically see when people are uncertain about the future of the economy is that they move their higher investments like stocks into lower-risk investments like bonds.

Now, the mortgage-backed securities (MBS) is a major investment that is backed by the monthly mortgage payments and these securities are sold in the bond market.

MBS tends to be in higher demand when people move into the bond market during times of uncertainty. And when the demand for the securities is high, the rate of return doesn’t have to be. The result is usually lower mortgage rates.

However, the current situation with COVID-19 is different.

COVID-19 And Mortgage Rates

COVID-19 is causing the market to be more unpredictable than it typically would during a crisis. Here are a few reasons why the market is reacting this way:

1. Headlines – News headlines, whether good or bad, has the potential to change the course of the market. With news about COVID-19 changing so rapidly, you can see how making predictions can be difficult. 
2. No Certain End – While government and medical agencies are working towards bringing this to an end, no one truly has an idea of when it will end. In these types of situations, the result is usually investors moving their money out of financial markets and into things like precious metals. This action can drive mortgage rates up. 
3. Lender Response – Since rates are changing so much, it’s a bit riskier for lenders locking in rates. So it may be possible that you end up paying a bit more to lock in your rate. Also, since the rates are so low, thus driving up the demand to refinance, lenders may inch their interest rates a little higher. This is not always the case but something to be aware of. 

Here is another important fact to note: The mortgage process is considered an ESSENTIAL financial transaction. 

Housing Plays A Significant Role In The Economy

Since housing is so significant to the economy, the Federal Reserve sometimes intervenes to stabilize it by buying up lots of MBS. This action helps to keep mortgage interest rates low and encourage people to buy homes.

Although we don’t know all of the details of the recently passed a $2.2 trillion aid, the Feds have several courses of action to keep mortgage rates at a favorable level for homebuyers and homeowners. They stated that in addition to an emergency rate cut, they would do as much purchasing in the financial markets as is necessary to help ward off any economic downturn caused by the virus.

Should You Refinance During The COVID-19 Pandemic?

Here’s what it boils down to: Rates are still low, your home is your most significant financial investment, and your home equity can provide financial stability you need in times of trouble. 

There are still many things to consider before deciding definitely if this is the right more for you. So we encourage you to contact us today to set up a consultation. The sooner we get started, the sooner you have access to your home equity.

How Can We Help You Gain Financial Stability?

The mortgage process is considered an ESSENTIAL financial transaction and critical to the economy. Rest assured that our office is equipped and connected with everything you need to expedite your loan and answer your questions. Click here to Get a Quote 

Home Shoppers – This Is How To Choose Your Ideal Neighborhood

  Choosing your neighborhood should be considered just as carefully as the home when you’re in the market to purchase a house. Just like moving in with a roommate, communities have habits and personalities –some of which may not be the right fit for you and your family.

For example, some neighborhoods are socially active, having block parties for the Fourth of July and community watch programs with monthly meetups. If you’re the type that likes to keep to themselves (and that’s okay!), this neighborhood may not be the right fit.

Further still are the different needs of a couple starting a family versus empty nesters.

So when trying to figure out which neighborhood is a good fit, it comes down to doing your homework. Fortunately, researching a neighborhood is much easier nowadays than it used to be just a few years ago. City websites, community boards, and neighborhood groups on social media sites are a few places to start.

However, one of the best resources is still your real estate agent. An excellent real estate agent will make sure that both the house and the neighborhood have the essential amenities you’re looking for.

Here are the most common factors that home shoppers look at when researching neighborhoods:

Crime Rates

Safety is top of mind for anyone looking to move into a new area, not only for safety reasons but also because lower crime rates can help to keep property values steady.

To check current crime rates, look toward the local law enforcement agencies as they will typically track and share crime stats. There are also independent websites that post current crime rates. You can also see if there are any sex offenders in the area by running the address through the National Sex Offender Registry.

School Quality

It may surprise you to learn that buying a home in an area known for quality education isn’t just about sending your kids to a good school. Schools affect home values as well.

Local school districts have “report cards” for each of their schools on their website, available for you to download. There are also independent websites that rate schools across the country and allow you to compare them too.

Lifestyle

What amenities do you need in your neighborhood that would increase your enjoyment of life?

Are you an avid bike rider or hiker that needs lots of trails?  Are you a social butterfly that craves a vibrant nightlife and diverse dining?  

Are you planning to start a family? Check out the childcare options and local activities for young children. Again, community boards, social media groups, and review sites are great for learning about the area.

Remember to spend time in your prospective city both during the day and at night to get a real sense of it. And while you’re at it, check out traffic flow during rush hour and see how that will affect your commute.

Moving Into a New Neighborhood

When you’re shopping for a property, make sure you also shop for the neighborhood. After all, this is the place you’ll call home for the next few years, or possibly your life.

Wondering which neighborhoods you can afford to live in? You may be surprised how much you qualify for! Contact us today to see how much you prequalify for.

2020 Real Estate Trends: Is It a Good Time To Buy or Sell?

  Some of the first things we look at when determining a favorable seller’s and buyer’s market are employment, income, and consumer confidence levels. Those 3 points combined with current rates and loan programs give us an excellent sense of how big the opportunity is for you. 

Should you buy a home in 2020?

Here’s what current trends are telling us. 

• The current economy is fairly stable and steady, with employment rates high and interest rates low.
• Demand for starter homes is also high thanks to millennials
• Builders are also concentrating on more entry-level homes rather than the more expensive “level-up” homes
• Retiring baby boomers are also driving the demand for smaller homes

The 2020 Outlook for Buying a Home

 With current rates on the lower end of the scale, it’s an excellent time to buy. However, first-time homebuyers may encounter competition. With baby boomers looking to size down and builders slow to switch from larger homes to starter homes, first-home home shoppers should prep for smart bidding. 

Nonetheless, it’s still a favorable time to buy a first home.

Other than the market and rates going in your favor, there are other things home shoppers need to remember: 

• Get your debt-to-income (DTI) ratio as close to 43% as you can. Calculate your DTI by dividing your debt by your gross monthly income.
• Make sure you have enough for a down payment plus additional for closing costs. Depending on the loan you qualify for, your downpayment could be as little as 0-3.5%! 
• Check up on the health of your credit. If it’s on the low side, take a few months to work on it. 

Should you sell your home in 2020?

Other the market, other points to consider when looking to sell your home are:

• Does your current house fit your lifestyle? If you are in retirement age, then your large family home is likely more than you need. Likewise, if your starter home is busting at the seams with your growing family, leveling up to a larger home may be called for. 
• Is your home in high demand? If your home is currently a “hot item” because of location and features, banking on its desirability is attractive. 
• Are new homes being built in your area? If you’ve been contemplating selling your home and new constructions are underway, you want to move fast! With more to choose from, buyers will take their time to shop and deal.

The housing market in 2020 is looking great for both sellers and buyers –that is, for those that act now. While rates are relatively steady, even a small change upward could cost you hundreds of dollars more. Why not lock it in now and have the peace of mind of an affordable mortgage?

Call us today to get matched with your best loan option.

What to Expect When Buying a Foreclosed Home

Foreclosed homes are some of the best home purchase deals you can find but that doesn’t mean that you should through caution to the wind when considering purchasing a foreclosed home.

 

In fact, some foreclosed homes can end up costing you more money (or headaches) than they’re worth. Here’s what you need to know about purchasing a foreclosed home.

 

Foreclosed Homes are a Diamond in the Rough

The first thing to understand is that foreclosed homes are often in a rough state. This may be partly due to the fact that the previous owner was unable to make their mortgage payments, and therefore, couldn’t afford the upkeep either.

Or it could be that the previous owner was imbittered about their home being foreclosed on and abandoned the home, or even outright vandalized the property.

These are some of the main concerns when it comes to the condition of foreclosed homes:

Run-down and unclean

Foreclosed homes are often filthy because they had been sitting unoccupied for months –sometimes years! Plus the previous owner may have also added to the grime from neglect. Vagrants sometimes will occupy empty properties as well. To be frank, foreclosed properties can be so disgustingly dirty that professional, deep cleaning is necessary.

Poorly Done or Incomplete Renovations

In an attempt to gain more income to pay their mortgage, the previous owner may have tried to convert areas of the home into a separate living space, such as turning the garage into a studio for rent.

Permits are expensive and take time to get approved so most likely these types of renovations are done haphazardly and without necessary city permits.

Mold and Water Damage

The neglected home could have been suffering from a leaky pipe or storm damage. If it’s been unattended for a long time, the damage could be severe and expensive to clean out and repair.

Items Left Behind or Removed

The previous owner may have left personal property behind or others may have even used the abandoned property as a dumping ground. There’s also the issue of items being removed, such as a water heater or air conditioning units.

Purchasing Considerations with Forclosed Homes

Financing Issues

Getting approval for a loan on a property that is deemed uninhabitable or appraises below the purchase price is unlikely. However, if you are paying for the home in cash, getting a mortgage on a significant fixer-upper won’t be something you need to worry about.