Two things that are top of mind these days: staying home and your bank account. Put them together, and you might also be wondering what COVID-19 means for your mortgage.
I’m hoping you mean I could get a break on paying it?
Exactly. Lots of mortgage lenders have new hardship programs in place for people who’ve been affected by COVID-19. Let them know if you think you qualify.
You also might’ve heard that now is a good time to refinance. (That’s when you swap out a loan you have for a new one with better terms.) Here’s why: in March, the Federal Reserve cut interest rates to almost zero. Meaning there might be good deals out there. Over a 15- or 30-year loan, a lower interest rate could add up to a lot of savings.
What’s the catch?
Refinancing isn’t free. You usually have to pay closing costs all over again. So think about how long you plan to stay in your home and run the numbers before you re-sign on the dotted line.
What if I’m in the market for a new address?
You’ve got a few things going for you. Like low interest rates and potentially more motivated sellers, who could be more open to negotiation.
I’m sensing a ‘but’ coming.
Surprise: the pandemic complicates some things. For one, you’ll need to get used to virtual open houses. Plus, some important processes, like getting a home appraisal, are harder to arrange now. Lenders are also getting pickier about who they do business with in order to protect against people defaulting on their loans.
K, great. Anything else?
One more thing. Before you buy, make sure you’re confident that your finances can handle it. On top of the down payment, there’s closing costs, taxes, and insurance to think about. And down the road, maintenance and repairs.
COVID-19 has changed, well, everything. Even buying and paying off your home. Whether you’re thinking about refinancing your current mortgage or planning to add “homeowner” to your resume, do some homework. And make sure your wallet can handle it now and later.
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