In the face of the coronavirus pandemic, millions of homeowners are looking at every avenue to get money. The economy’s slippery slope drained many bank accounts, leaving millions of consumers wondering what now? How will you get the money you need?
All you ever hear in mortgage financing is that you need perfect credit, right? What if you don’t have perfect credit? Maybe the pandemic took its toll on you and your credit score fell. Are you unable to refinance or get a new mortgage anytime soon?
There is still hope, as long as you have other compensating factors.
Did you enter a forbearance agreement with your lender when the COVID-19 crisis began? Maybe you lost your job, were furloughed, or have reduced hours. The CARES Act made it easy for you to put your mortgage into forbearance. The plan allowed you to stop making payments for 3 months. Now that the 3 months are almost up, now what?
Lenders look at your credit score before anything else. That three-digit number tells them a lot. If it’s not a great number, they may turn you away or give you less than optimal mortgage terms.
Do you want the best mortgage terms? Raise your credit score before you apply for a loan.
It’s not as hard as you think. It overwhelms many people to think of their credit score, but like anything else in life, with a little knowledge, you can make changes.
With today’s low rates, a 15-year loan may be more affordable than you think.
Considering the 15-Year Refinance
Here are the obvious facts – you pay your loan off in 15 years rather than 30 years. You own your home in half the time. Sounds appealing, right? It is, but for the right borrower.
In March, the federal government put into law the CARES Act which helped affected homeowners put their mortgage into forbearance. The initial plan allowed homeowners to stop making payments on their mortgage for 3 months without risking a penalty or foreclosure.
As we near the end of the 3 months, many homeowners wonder, what now? The forbearance plan doesn’t erase your debt – it gives you temporary relief. You may make the payments if you can afford them or you can wait, but your credit score won’t drop and your lender can’t assess penalties.
Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.
When someone purchases their first home, this is a significant step. There are a number of issues that people need to think about because purchasing a home is typically someone’s most significant investment.
The Federal Open Market Committee of the Federal Reserve announced its unanimous decision not to change to the current target federal funds range of 1.50 to 1.75 percent. The committee’s customary post-meeting statement said the decision not to change the Fed’s target range for federal funds was based on factors including a strong labor market, moderate economic growth, continued job growth, and low unemployment.
It is important for everyone to diversify their investments and one of the assets that people often look toward is real estate. In a healthy market, real estate should appreciate in value.