Not even the economy is sure what is going on right now. There is a lot of uncertainty in the world right now and mortgage holders, both new and current homeowners, have many questions they want answers to.
How are mortgage rates reacting to the current crisis?
Mortgage rates are a little tricky right now. Compared to this time last year they are down. However, they are up when compared to last week. It is pretty hard to predict which way they will go next. “Mortgage interest rates are closely correlated with the 10-year Treasury yield, which has stayed below 1% for much of the last month,” says executive vice president of Quicken Loans Bill Banfield. “Mortgage rates will likely stay low as long as the Treasury yield also remains at low levels.”
Why did they go back up?
In March we saw that mortgage rates were at a record hitting low. Once this happened, many homeowners decided that it was the time to refinance their existing mortgage because the rates were extremely low. Because there was such a rush and surplus, lenders ended up raising their rates to slow it all down. Rates may have gone up but with the uncertainty in the economy, there is a chance they will soon fall again.
Should I refinance?
If you purchased a home in the last few years, you may be able to get a much better rate right now. It is worth it to see if refinancing is an option for you. Banfield says that “it’s a great time to take advantage of how far rates have fallen in the last month, and it’s a pretty dramatic decrease, especially for somebody who took out a mortgage 12 to 48 months ago.” Another tip when it comes to refinancing is to consider how long you will be staying in the house. If you are going to stay longer than your break-even point, it is worth it to refinance.
I have been affected by COVID-19. Can I stop paying my mortgage?
If you are worried about making ends meet to pay your mortgage this month, please reach out to your lender as soon as possible. Many lenders are coming up with plans to assist in this situation. While you still may need to pay, they could lower your monthly amount or work out some type of payment plan with you. It is best to be upfront with your lender and discuss what options you have.