The COVID-19 pandemic did send shock waves across the different levels of society on a global scale. With millions of deaths worldwide, multi-billion dollar economic losses in many countries, and widespread job loss, this crisis has truly touched people’s lives, albeit in mostly negative ways.
For those who are contemplating about taking a mortgage or refinancing their mortgage loan, finance and real estate experts believe that now is the perfect time to do it with the interest rates mostly at all-time lows. But, should you immediately take the plunge?
Here are the most important things that you should remember about mortgaging in times of crises:
Doing your research first is critical.
Before you head out to your nearest lender, you should first take a deep breath and do diligent research. For one, you could ask for recommendations from friends colleagues on a mortgage lending company that offers competitive interest rates on home mortgages. You should also consult the Better Business Bureau website to gain a better understanding of the credentials of the lending company you’re eyeing to take out a mortgage from. By learning as much as you can about the company, you can best determine if it offers the best deal or if you should consider other options just for good measure.
Fixed-rate and fixed-term mortgages would be unaffected.
While it’s normal for the uninitiated to think that all types of mortgages would drop in terms of interest rates, it’s actually far from true. In times of crises, home mortgages with a fixed-rate and fixed-term bases would be pretty much unaffected. This means that if you’re refinancing your fixed-rate, fixed-term mortgage loan to avail of the interest rate dip during such time, it would be practically impossible to get approved.
It is generally the best time to take out a mortgage or refinancing.
If there’s one good thing that came out of the current pandemic, it’s the rapid drop in mortgage interest rates. This only means that if there’s one opportune time to secure a mortgage or refinance, it would be today. As the real estate industry remains stable thrives during this crisis, you should act quickly and contact a reliable mortgage lender to get your first mortgage or your existing mortgage company to refinance your home mortgage.
There is a limited window of time to enjoy the low-interest rates.
While the prospect of enjoying insanely low-interest mortgage rates is irresistible, they’re not meant to last long. As some experts believe, they can be gone in a heartbeat when the volatile situation suddenly improves. So, instead of foregoing your plan to take out your first mortgage or refinance your current one, seriously consider taking advantage of the situation the soonest possible time.
You might wait a little longer than usual to get approved.
While interest rates for mortgages are incredibly low right now, it doesn’t mean that you can get approved in the blink of an eye. Because lending companies are fully aware of the volatility of the situation, particularly of the capacity of people to pay for their monthly dues, they are more deliberate in screening mortgage applications. From the usual 1 month to 1.5 months, processing of applications now takes an average of 2 to 3 months. This is the way for mortgage companies to minimize potential losses through high default incidents, so it should be something to expect these days.
You must inquire and avail assistance for those affected by the crisis.
During the initial months that the negative impacts of COVID-19 were being felt worldwide, the United States Federal Government and the U.S. Congress joined hands in enacting stimulus bills that helped millions of affected Americans. Chief among them was the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020, which President Donald Trump signed into law back in March 2020.
Under the said law, mortgagees who can’t pay their monthly dues due to the direct effect of the pandemic may avail of up to 12 months of forbearance if they have a federally-backed mortgage. For those that did not, there is still the possibility of enjoying deferred payments, depending on the lending institution. As such, don’t forget to inquire with your lender if you can enjoy this benefit, particularly if you’ve suffered financial loss due to COVID-19.
With these vital tidbits to guide you, there should be no reason for you to make the wrong move when it comes to mortgages. Just do your research, connect with a trusted mortgage broker and lending company, and you’re good to go.