Home Loan Interest Rates, Coronavirus, and Your Mortgage
Fears of the coronavirus have fueled investor behavior, which in turn has put downward pressure on mortgage loan interest rates, refinance loan interest rates, etc. And the ride is not over yet, from all indications.
One way to do a “barometer check” on how COVID-19 and its headlines are affecting American economics including home loans? Mortgage rates continue to fall and market watchers predict we may see even lower numbers before it’s all over.
Listen to how the experts talk about the situation and where it’s going. But also pay attention to where the investors are putting their money. Safer moves like Treasury Bills? Or a return to the riskier investments that a less volatile market makes attractive?
But there’s something house hunters and refinance loan applicants need to know about all this. Especially when people feel as if maybe they “should” buy or refinance with mortgage rates as low as they are (3.25% for FHA and VA mortgages, best execution, at the time of this writing) currently.
But if you try to apply for a mortgage before you are truly ready, the low rates you see now won’t mean a thing unless you actually get approved for a loan.
And even then, the rate situation can change between the time you submit an application and the time you get to the mortgage loan interest rate lock commitment phase of the loan process.
Experts warn that the incredible lows we’re seeing now not only will not last forever, there will be a reversal or a “market correction” in the rates that will pull them back to higher levels. The correction is likely inevitable, but there’s no telling when that may happen.
Which is why it’s a very good idea to assess your ability to afford and get approved for a loan long before you actually apply.
Regardless of the current interest rate climate, the most important thing is to get approved for the loan. The interest rates are a factor you’ll need to worry about once your lender determines your ability to qualify.
The coming market correction is real; those who are ready to make a mortgage rate lock commitment with the lender can take full advantage of the current lower rates but FICO scores and credit history play an important role in determining what rate you are offered; it’s not just what is advertised by the lender.
If you need help preparing for a mortgage or refinance, outside assistance may be just what you need to move forward. Call the FHA directly at their toll-free number to request a referral to a HUD-approved housing counselor. Call them at 1-800-CALL FHA.
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Meeting FHA Loan Guidelines Improves Your Chances
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