COVID-19

Rates are lower than ever; when a refinancing is done right, it can save you thousands of dollars. But not every potential refi makes the cut. Sometimes the expenses just don’t justify the potential savings.

It is time to refinance your home mortgage if the terms lower your mortgage interest rate, pay off their mortgage years earlier, or saves thousands in interest over the life of the loan. You can save serious money by refinancing your mortgage. But due to refinancing fees and expenses, not every refi makes financial sense.

COVID-19 is creating changes with lenders and how they are doing business. This is resulting in refinancing taking longer and getting stricter than it has been in the past. Although the mortgage process is considered essential as a financial transaction, depending on where you live, there may be changes related to COVID-19  involving your appraisal, rate lock and closing process.

Rates are quite low and because your home is your biggest financial investment, the equity can be very useful as a resource in times of trouble. But if you’re thinking of financing your home loan there are several steps you should take to make sure that it’s the right move for you.

How Long Do You Plan On Being In Your Home?

Being able to answer this question will help you figure out the term length you want on any refinanced mortgage; but there’s another reason asking this question …

If you plan on moving within the next 5 – 10 years, it could be worth your while to look at an adjustable rate mortgage ( ARM).  You get a lower rate initially with an ARM because the rate can adjust after the teaser period. But if you move before the end of the fixed-rate time frame, you don’t have to worry about whether the rate is going up and down in the end. Additionally, your payment will tend to be lower because most adjustable rate mortgages are based on 30-year terms.

Age Of Current Loan

The age of your current loan sometimes plays a role in whether you can refinance. Even if you can refinance, it does not always make sense.  When you refinance you have to pay closing costs.  If you are not planning on staying in the house past the breakeven point when the savings and the additional expenses paid starts to net to overall reduced costs for home ownership, the it is not the time to refinance.  You may want to accelerate buying a new home to realize the saving from lower interest rates.

Plans For Monthly Savings

If you determine that you’re going to save money by refinancing based on the rate and term you can get, make sure that you have a plan for what you’re going to do with the monthly savings in order to put yourself in a better financial position. No one knows exactly when COVID-19 is going to end and how long it will take for the economy to recover. If you can save money now, you can work on establishing the savings need should the vaccine be delayed or we continue with a longer recession

You could use your savings to build up an emergency fund. Maybe you choose to allow yourself to save money in the future by paying off high-interest debt now. You can also use this to catch up on saving for retirement if you stopped contributing temporarily while dealing with the situation caused by the virus.

It’s a very volatile market right now, so we advise all of our clients to rely on the advice of their Home Loan Expert and Financial Advisors at all times.

The Mortgage Refi Process

Approving a mortgage is a complicated process, one that requires a lender to validate a borrower’s income, check the value of the home being used as collateral and scrutinize the title history of the property.

Just as refinancing applications picked up, the coronavirus pandemic dramatically changed the way everyone in the mortgage industry works. Loan officers no longer go to the office. Appraisers stopped walking through houses. And no one gathers around the title company’s closing table. The process is a little slower because everybody’s working from home right now. Things that would take an hour to do are taking a day sometimes.

It is more difficult to verify a borrower’s employment. A task once dispatched with a quick call to the borrower’s human resources department now means leaving a voicemail and waiting a day or two for a response.

Meanwhile, homeowners looking to refinance may have to get in line behind buyers who need a mortgage so they can close on a house which are a priority with lenders.

The mortgage industry already had been digitizing, and lenders quickly adapted to many changes. One stumbling block, though, is that most lenders still require some documents to be signed in the presence of a legal witness and notarized.  Florida allows for mobile notaries and they are busier than ever.

Sometimes, documents are being signed remotely and online and mobile notaries are not allowed yet.  You need to allow time for in person notarization and overnight mailing of documents.  Digital closings may be the way of the future, but we are not there yet.

What You Can Do to Secure a Smooth Refinance

Here are a few ways you can make the refi process as smooth as possible:

— Get your paperwork in order. Don’t let something simple like a missing document delay your refinance. Collect PDFs of financial documents, including pay stubs, bank statements, tax returns and retirement accounts.

— Make sure the lender will honor your rate lock. In normal times, lenders extend rate locks for 30 to 60 days, meaning you won’t have to pay more if rates go up before your loan closes. These aren’t normal times, though, and many refinances aren’t closing within 30 to 60 days, so make sure your lender is willing to extend your rate lock if your deal is delayed.

— Keep your credit score tight. Now isn’t the time to miss a payment, take on new debt or otherwise do anything to lower your credit score. Lenders are being especially strict about borrowers’ credit histories.

Filed under: Blog, Boca Raton real estate, coronavirus, COVID-19, Exclusive Buyer Agency, Exclusive Buyer Agent, Florida Real Estate, Home Buyer Advice, Home Buyers, Home Financing, Homebuyer Advice, Mortgage Information, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Refinancing, South Florida Real Estate by Kim Bregman
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Since COVID-19  lock downs began in the US, most Americans have drastically changed their patterns: following instructions to stay home, limiting almost all contact with others, and venturing out only for essential trips and exercise. Americans are getting tired of staying inside. All states have re-opened at different levels. As states begin to ease social distancing restrictions, people are beginning to have more options. Between those wanting to patronize newly reopened businesses or socialize in person, and more employers calling people back to work. The safest thing anyone can do in the middle of the Covid-19 outbreak is still the same as it was a few months ago: Stay home as much as possible to avoid catching or spreading the virus until there is a vaccine or effective treatment, or until the pandemic otherwise ends. That especially applies to people who are sick, who should do all they can to avoid exposing others to the coronavirus. But for many people, it’s really not clear which kinds of gatherings are safe and which aren’t. And that uncertainty can spark anxiety. Fortunately, health experts know more about the COVID-19 than they did when the lock downs began, and they can point us to different levels of risk as we begin to reengage. First and foremost, the advice that has been repeated for much of the past few months remains true: Your home is still the safest place to be during this pandemic. You should continue trying to stay home as much as possible, because the virus is still circulating at a very high rate in many communities. But whether you need to for work or you’re simply tired of looking at your home’s walls, there are ways to mitigate risk when you go out. if you want to do something outside your home, it’s better to take advantage of the fresh air and do it outdoors rather than indoors when possible. If you want to meet with certain friends or family, consider a pact with them in which you’ll both agree to minimize or eliminate contact with anyone else, to reduce overall exposure for everyone involved. The most important thing: Avoid indoor spaces that bring you within 6 feet of people from outside your household for long periods. “It is about density. It is about duration of contact,” according to Cyrus Shahpar, a director at Resolve to Save Lives. So if you’re having friends over, consider hanging out outside (and keep it to a small group). If you want to eat at a restaurant, look for outdoor seating. If you’re going for a run, go to the park, beach, or streets instead of the gym. After some mixed messaging from federal officials early on in the COVID-19 outbreak, there is widespread consensus that people should wear masks when they go out — a surgical or medical mask if they have one, a cloth one if they don’t.  The Centers for Disease Control and Prevention recommends masks “in public settings where other social distancing measures are difficult to maintain (e.g., grocery stores and pharmacies), especially in areas of significant community-based transmission.” But other experts — and, in some cases, government mandates — go further, saying you should wear a mask in just about any setting outside your home as long as the pandemic continues. The primary reason for a mask is to stop transmission from the wearer to others, particularly from people who are infected but asymptomatic and therefore might not even know they’re infected. If you wear a mask, you’re less likely to spray virus-containing droplets on surfaces or other people when you breathe, talk, sing, laugh, sigh, snort, cough, sneeze, and whatever else you might do with your mouth and nose. One of the common pieces of advice throughout this pandemic has been to keep 6 feet or more away from people you don’t live with, summarized by the catchy slogan “6 feet distance determines our existence.” The closer you are to someone, the likelier they are to shed their coronavirus all over you, and vice versa. Whether you’re leaving your home because you have to for food or work, or you’re going out because you can’t stand the sight of your apartment anymore, one way to minimize risk is to space out all your trips. With every venture outside, you are putting yourself at risk of contracting COVID-19 in a world that’s still engulfed by a pandemic. ALWAYS wash your hands frequently, and don’t touch your face. If you’re going to frequently venture far outside your home, that advice is especially pertinent. Take hand sanitizer to use religiously and wear gloves whenever possible. Stay Safe, Stay Healthy, Stay Home Whenever Possible

Filed under: Blog, coronavirus, COVID-19, Exclusive Buyer Agency, Exclusive Buyer Agent, Florida Real Estate, Home Buyer Advice, Home Buyers, home safety, Homebuyer Advice, Uncategorized by Kim Bregman
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