Mortgage forms a significant part of monthly expenses for several homeowners. Owing to the widespread pandemic, homeowners are faced with challenges associated with job security and cash management to repay the mortgage.
As soon as COVID-19 hit the US, the Federal Reserve immediately reduced the interest rates to almost 0% with the hopes of stimulating the economy. However, as mortgage rates are not directly related to the Federal directives, we have observed a trickle-down effect.
Expert Advice on Mortgage Rate Volatility
Most financial experts recommend homeowners who are struggling to pay their bills or meet mortgage deadlines to take a holistic approach. If you are facing issues with your payments, it is advised to get in touch with your lender directly to understand the relief options. Several credit card companies are offering a no-interest grace period at no fees to allow customers to free up their funds without feeling overwhelmed with credit card payments.
Lenders are also providing forbearance as a temporary alternative that homeowners can consider for short-term liquidity. If you select this option, consider complete future financing as you will still have to repay the mortgage in the future. Besides, forbearance can impact your FICO score if you are unable to refinance the mortgage within the given time period.
An alternate solution for mortgage payments is through loan refinancing. One major drawback of this option is that since refinancing is a comparatively longer process, your savings may not become available immediately. In addition, refinancing can cause additional debts that you will have to pay back eventually.
When selecting any of the options mentioned above, it is essential to consider your income sources, monthly expenses, and cash before making a decision.
Is It A Good Time to Buy A House?
Buying a house in the middle of a pandemic means you should carefully evaluate your finances and income. If you have a stable job, this is an excellent opportunity to lock down a new home. It is essential to keep in mind that housing prices have stayed affordable for more than a decade. Hence, if you have the financial ability to pay the down payment, you can benefit from the low-interest mortgage rates resulting from the pandemic.
Even if there is a limited number of listings, so is the competition to purchase them. Many buyers are pushing out on buying a new house due to limited capital. But if you have the required financial backing, this can work out to be an excellent opportunity for you.
Hiring a Good Mortgage Professional
Due to the pandemic, mortgage agencies and lenders have modified their pre-market requirements to accommodate social distancing and COVID safety regulations. It is recommended to hire a good mortgage professional who can help you navigate the guidelines and state rules applicable to your transactions. Owing to the current economic situation, it can be tedious to analyze and understand your assets and mortgage rate volatility. However, a mortgage expert can help you steer easily through this rough climate. Rex Homes has provided some additional information on what mortgage professionals are suggesting for this pandemic housing economy on their blog here: https://blog.rexhomes.com/mortgage-rate-volatility-helpful-advice-from-the-pros/