COVID-19 MORTGAGE MARKET CHANGES

The past 45 Days have been a slow creeping nightmare that we all wish we could wake up from. COVID-19 has disrupted any sense of normalcy. And, it looks like the way we live now, will be our new normal. What does this mean for the Mortgage and Real Estate Markets? 

Well, let’s start with the facts first. As of today 5/3/20 the FHLMC 30 Yr Mortgage Prime Rate is still hovering at 3.23%! These are absolute historic low!! Throughout history, we, as a country, have never seen rates quite this low.. It’s UNPRECEDENTED, UNHEARD OF! Therefore, if you are in a position to buy a home, CEASE this opportunity!!!  The low rates are producing high volume for refinances, which means, that if you need a job and have any type of real estate finance or mortgage experience, guess what? Banks are hiring!! They’re begging people to come to work with such high demand. 

Second, this current market...it’s the new normal. Yup, you hear it right, there’s is No going back to the way things were. Who remembers the 2008 Mortgage Crisis Recession Crash?  Banks have had 12 Yrs  to learn from mistakes. They’ve spent this time making sure that their risk management practices were tough so that when a crisis like this hit, they’d survive. Bear Stearns and Lehman Brothers Anyone? Right, no one even remembers who they are anymore. The big banks aren’t sweating as much because they’ve spent all that time in the stance of  “in the unlikely case of” scenarios. 

Thirdly, Qualifying standards are tightening. On 4/11/20 JPMC announced that they would only approve loans with borrow who had a 700 Credit Score or Above. What does that mean for our Home Buyers? You will have to make sure your financial affairs are in line and order because the only way to get approval through this lender is having an A+ Credit Score.

 Does that mean Buyers who have credit scores under 700 can't get approved?  No, it just means they'll have to find a lender that services that market range.  

Finally, the Sellers have had to make some adjustments. As Realtors we’ve added a new COVID-19 Addendum to extend contracts in case the virus has had an impact of the closing date being pushed out. Will your house still sell? Absolutely! It may just take a little longer than planned considering the current circumstances. If you are considering selling & haven’t listed the property yet, you may want to consider your states guidelines on the Shelter-In-Place Policy. This will have an impact of your final outcome. Your home will still sell. You just may need to exercise some patience in the process. 

4.8.13, iFinancial Fitness: So U Wanna Buy A Home ? Pt 1

Credit

Here's a few tips to consider if you are wanting to buy a house. I get several questions about what can I do if I have challenging credit and I want to buy a house. So, I put together these five tips that is a quick read that you can take into account as you work towards your goal of homeownership.

1) You need at least three credit tradeline on your credit report that has been have been established over the period of the last two years i.e. furniture your car note and a credit card that's a good mix of trade lines

2) Also those trayliners need to show a 24 month history of no late payments if there are late payments if you are required to submit a letter of explanation explaining why your payment was late if it was due to a hardship financial difficulties or things like.

3) Any derogatory credit will have to be explained in a letter of exclamation in addition to the fact that any collections, judgments, bankruptcies, and late payment I should be resolved by the time you apply for a mortgage.

4) Any student loan payments that are listed on your credit report are considered in your debt to income calculations for the mortgage so if you have 25 separate student loan payments I would highly encourage you to seek loan consolidation for your educational debt.

5) Ideally you need a minimum 620 credit score in order to be considered for a mortgage so use the following steps mentioned above to work on your credit if you have some challenges.