We’ve received a ton of questions regarding COVID-19 and how it can affect your mortgage. Things have been changing rapidly, and we know how troubling and confusing these times can be. We’re providing a breakdown below that will highlight what COVID-19 means for home buyers, homeowners that are considering refinancing, people with adjustable-rate mortgages, and anyone who wants to know whether they should lock a rate.
What does COVID-19 mean for home buyers?
While COVID-19 has presented it’s challenges, you don’t have to let go of your dream to buy a home just yet! This is a good time to take advantage of online resources, get prepared for the home buying process, and connect with the right experts.
The federal government cut interest rates to 0%, however that doesn’t mean mortgage rates are sitting at zero. While mortgage rates are still low, lenders have also been able to manage the refinancing demand, so rates have been fluctuating. In fact according to economists, mortgage rates might hit a record low and remain that way until the crisis is over. We recommend shopping and comparing mortgage offers, as mortgage rates can have a big impact over the life of your loan.
What does COVID-19 mean for homeowners that are considering refinancing?
If you’re thinking of refinancing, there are several steps to consider. First, ask yourself how long you plan on being in your home. Knowing this will help you figure out the term length you need on any refinanced mortgage, which you can leverage as another aspect in determining the right mortgage for you (in addition to affordability). You’ll also want to consider the age of your current loan, and what your plans are for monthly savings. Remember, know one knows how long this is going to last. This is a good time to set up an emergency fund, or allow yourself to save money in the future by paying off high-interest debt now.
What does COVID-19 mean for adjustable-rate mortgages (ARM)?
If you’re planning to move within the next 5 – 10 years, an adjustable rate mortgage (ARM) might be a good option. You’ll get a lower rate to start, because the rate can adjust after the teaser period. However if you move before the end of the fixed-rate time frame, you won’t have to worry about the rate fluctuating at the end. In addition, the payment tends to be on the lower end since most adjustable rate mortgages are based on 30-year terms.
Whether you are a first time home buyer or this isn’t your first rodeo, you’ve come to the right place with your mortgage concerns! Ken Venick and the team have over 30 years of experience in the mortgage loan business and can put you or your client in the right mortgage loan product for their unique needs. Give us a call today at (443) 471-4310 or contact us online.