How COVID-19 Affects Mortgage Options
Our Atlanta mortgage lender team have been watching the housing and mortgage market in the wake of the effects of COVID-19. From supply and demand to the health of our client's financial situations, the pandemic has changed a lot of things. The impact has been reflected in the mortgage options that are available to homebuyers, as well as the options available for mortgage relief to those who are struggling.
How COVID-19 is Affecting Lenders and Mortgages
One thing we are seeing a lot of are homeowners choosing to refinance their mortgages as a result of the rate cuts made by the Federal government. However, with many people experiencing job and hourly cuts, a lot of homebuyers are finding it hard to meet the requirements of mortgage applications at this time. This may mean higher rates for many as people's credit scores are impacted. Refinancing may be a good option though if you are looking to lower your monthly payments so that you can keep on top of your mortgage.
What to Do if You Are a Borrower
The CFPB (Consumer Financial Protection Bureau has outlined a plan for borrowers who are being affected by the COVID-19 pandemic. The first step to take is to review and assess your current situation. If you are able to pay your monthly repayments without having to struggle, then the advice is to continue making your payments.
However, if you are finding that you can only make a partial payment, or are unable to pay at all, then your first step is to call your mortgage provider right away. They can go over any options available for payment deferrals and how that will impact you when the deferral period is over. Some lenders are adding any payments missed to the end of the mortgage loan, and some are requiring that missed payments to be made once the regular payment process has resumed.
Mortgage Relief Programs
The Federal government has set up some relief programs for homeowners struggling to pay their mortgage through the CARES act for those who have federally backed mortgages. It allows homeowners to request a period of forbearance through their mortgage providers, which includes these federally backed mortgages:
- Freddie Mac
- Fanny Mae
The way the CARES Act works is by providing borrowers affected by COVID-19 with the means to defer their mortgage repayments for up to 6 months. They may also apply for an additional 6-month extension with no fees or penalties. However, your regular interest rates will continue to accrue during this time.
The best way to see what your options are, whether applying for a mortgage at this time or struggling to meet your monthly repaments, is to contact your lender to see what you may qualify for under the Federal and state guidelines set out for dealing with the impact of COVID-19.
If you have questions about getting a mortgage or refinancing your current mortgage, give our Atlanta mortgage lender team a call today!