With the real estate market in a constant rollercoaster due to thecoronavirus, homeowners are watchinginterest rateslike hawks.
If they drop low enough, you could score a great deal on refinancing your home.
Refinancing demand ishigh
When I bought my home last month, there was a delay with my mortgage broker.
Nothing we did wrong, he said.
But the brokerage got such an influx of refinancing applications that it pushed back my closing paperwork.
With so many people requesting refinancing, our utility stalled.
For the week ending in March 6, mortgage applications were up 55.4% over the previous week.
Of those, 76.5% of those applications were for refinancing, according to theMortgage Bankers Association.
It’s the highest refinancing has been at since April 2009.
It could take longer to get approved
You’re not the only one who saw interest rates drop.
While the coronavirus outbreak might’ve triggered an interest rate drop, it’s not doing you any favors.
“Lenders are working through their huge pipelines,” Cohn says.
Cohn says some lenders have stopped taking new applications until they work through what they have on hand.
If you applied, you might still get approved, but it could take much longer than normal.
If you try different brokers and lenders, compare requirements and qualifications to see if you’re eligible.
Rates are fluctuating, requirements are stringent
March and April are both seeing rates hit record lows.
The week ending on April 17 saw it as low as 3.45%.
“Jumbo lenders have also tightened guidelines.”
They vary by the state (and sometimes county) since some housing markets are higher-priced than others.
For example, in San Francisco, a mortgage loan becomes ajumbo loanwhen it exceeds $765,600.
In many parts of the US, jumbo loans start at $510,400.
“Nonqualified mortgages, aka Non-QM loans, have mostly disappeared,” he says.
“These programs cater to self-employed borrowers whose taxable income would not qualify for a conventional loan.”
“[A] 30-year fixed [rate mortgage is] near 3%!
So if your rate is 4% or higher now is the time to refinance,” she says.
Cohn also expects interest rates to drop again, if not even more so.
“We are in or heading into aserious recession,” she says.
“Rates will go lower and will remain low for months to come.”
Barenblatt envisions much of the same.
Look out for more low rates with a spike later on.
“However, once the stimulus ends, rates will most certainly go up.”
“Lenders will look carefully at borrowers who have recently changed jobs,” Barenblatt says.
“Don’t apply for new credit prior to refinancing since credit inquiries may bring down your score.
Don’t max out your credit cards as that too is detrimental to acredit score.
