Weekly Mortgage News Roundup for Sept. 18, 2020
In today's world, things can change quickly with respect to mortgage rates and more. Check out these top stories by The Ascent from this past week to help keep yourself up to date.
Mortgage interest rates still remain near record lows, but they've climbed a bit higher in recent days. As rates have increased slightly, the Mortgage Bankers Association has revealed applications for refinance loans and new mortgage applications have begun to slow. Still, rates do remain competitive, so those looking to purchase a home should shop around and compare interest and terms to determine if borrowing still makes financial sense.
The Mortgage Bankers Association's Mortgage Credit Availability Index fell last month to the lowest levels since March of 2014. The index measures availability of mortgage loans based on credit score, so this data indicates that mortgages have become more difficult to qualify for than at any time in the past six years. Would-be borrowers can increase the chances of getting approved for a loan by paying bills on time, correcting errors in credit reports, and otherwise taking steps to bolster credit scores, which are so critical to each lender's underwriting process.
Lenders have provided increased flexibility to borrowers due to COVID-19, and most people who are facing financial hardship are eligible for forbearance. In fact, any homeowner with a federally-backed mortgage was guaranteed eligibility for up to 180 days of forbearance during the pandemic, along with an extension for up to 180 more days.
However, while around five million people had requested forbearance by mid-June, Caliber Home Loans reported that as many as 43% of customers in forbearance have managed to make at least three months of payments -- even though they weren't obligated to do so. This is good news, as borrowers who pause payments will eventually have to make them up.
Thinking of refinancing your mortgage? Before you do, it's important to check your credit report and score; compare mortgage rates; and get an estimate of the value of your home. Taking these steps can help ensure you'll be able to get approved for a loan and can help you to get a mortgage loan at the most affordable rate possible.
There's not one right reason to refinance a loan. Three different mortgage experts revealed the reasons they recently refinanced their home loans. They include saving money on interest, securing a lower monthly loan payment, and consolidating debt.
Renters and homeowners who spend more than 30% of their take-home pay on housing are at risk of financial shortfalls. The pandemic has only served to make these house-poor Americans more vulnerable. Fortunately, there are rental assistance programs available to those who are struggling and some homeowners with mortgages that aren't affordable may be able to reduce their rate by securing a refinance loan.
Whether you're in the market for a new house, or hoping to refinance a mortgage, be sure to follow The Ascent's mortgage coverage. We'll keep you updated on what you need to know throughout your journey to help you make informed choices and keep your borrowing costs affordable.
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Chances are, mortgage rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase. Click here to get started by scanning the market for your best rate.
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