Once there’s a cure for Covid-19 you can expect interest rates to rise!
Covid-19 brought about a world of hurt for millions of people across the world. America was certainly no exception to this tragedy. The squeeze from Covid-19 nearly crippled economies around the world.
And who knows what happens when hundreds of thousands of people are dying and economies are crippled?
LOWER INTEREST RATES! Yay!
Mortgage rates are at an all-time low right now.
When I worked in the mortgage industry right before the housing market crash, our interest rates were some of the lowest on the block at around 6%-8%. I’m sure some people reading this will still have their pre-2008 mortgage.
Even if your mortgage isn’t from those wonderful pre-crash days, you still probably have an interest rate that’s higher than what it should be given these tragic times.
You could be saving thousands of dollars if you were to refinance right now.
What Is A Mortgage Refinance
Okay, so, a lot of my readers are younger, those that own a home are likely first-time homeowners. So let’s do a quick brush up on what a mortgage refinance is before we dive into the good stuff.
Whenever you refinance your mortgage you replace your current loan with a new loan. This new loan may be with a different mortgage company, or it may be with the same company that has your loan now.
Company A: They have your mortgage and you owe $120,000 left on it.
Company B: Has lower interest rates than what you’re currently getting.
You go to Company B and tell them you want your loan with them. So, Company B sends Company A a check for $120,000 and you now owe that $120,000 to Company B instead.
Sometimes Company A will not want to lose you, so they will replace your mortgage with one that matches the lower interest rates of Company B.
Why Should You Refinance Because of Covid-19?
First of all, and as I mentioned above, interest rates are really REALLY low right now.
Second of all, your mortgage forbearance is likely about to end. If you’ve gone months without paying your mortgage you can likely refinance it to squeeze another 30, 45, or even 60 days out of the deal.
Once the economy starts zooming again, the feds are going to raise interest rates. It’s not a question of IF it’s a question of WHEN!
Covid-19 Mortgage Refinancing MYTHS
Refinancing Won’t Save Me That Much Money – This is subjectively false. If you can even save a fraction of a percentage point on interest, you’re likely going to save multiple thousands of dollars.
I Just Got My Mortgage Last Year So I Don’t Qualify – Again, as a former mortgage-industry employee, this is super false. As long as you’re not trying to pull equity out of your home, then you don’t have to worry about some mythical waiting period. If you find a company willing to do so, you can literally refinance your mortgage a month into it if you want to.
I Can’t Refinance Without Having 20% Equity – Guess what, this is false too! This myth stems from rules that are involved with cash-out refinances, second mortgages, and HELOCs. A straight mortgage refinance does not follow the 20% equity rule.
I Can’t Refinance Because I Can’t Afford Closing Costs – Many lending companies are going to let you roll the closing costs directly into your final mortgage amount. You might not need to pay for anything up front.
Bottom Line: You can, and should, still refinance during Covid-19
Yes, I understand the devastation caused by Covid-19, but interest rates are not going to be this low again for a looong time. This is your chance to hop on and refinance before the rates shoot back up. Mark my words, the rates will start going back up in a few months!
My name is Brad and I have worked in the mortgage industry, other sectors of finance, and I’m also an entrepreneur with multiple felony arrests for financial crimes and hacking. If you want to get more finance tips, learn how to make money online, and hear some funny prison stories along the way, then subscribe below:
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