Mortgages During COVID-19: Information for Homebuyers & Current Mortgage Borrowers

Mortgages During COVID-19: Information for Homebuyers & Current Mortgage Borrowers

Reading Time: 5 minutes

It’s a crazy time for everyone right now with the COVID-19 pandemic forcing life and the economy to come to a screeching halt in most areas of the United States. As with most things, the real estate market is changing too. Even though there are changes to the way things are working, home buying and mortgage lenders are still functioning well. 

 

The real estate and mortgage lenders are actively making changes to their policies to protect themselves, current customers, and future homebuyers. 

 

 

Home Buying and New Mortgages: Things to Know About House Shopping during COVID-19 

If you were planning on purchasing a home soon, there’s no reason that you need to put your plans on hold because of the Coronavirus pandemic. Houses are still going on the market, bids are being submitted and accepted, and properties are changing hands. 

 

 

“The one thing we are certain of is the housing market is still booming,” said Aubre Houck, a Loan Officer from Fairway Mortgage Lender. “Now more than ever, we are seeing our clients have the time to focus on personal goals of buying or selling their homes.”

 

 

Here are some key points to know about the changes and ways you can continue your home hunt while social distancing:

 

 

Technology is Your Best Friend

The real estate industry is taking advantage of updated technology. It can still offer many of the same services to prospective buyers and sellers as they did before. From the virtual showing of homes on the market to buyer and seller consultations and meetings, you can still work directly with your broker or lender while also remaining safe. 

 

If you’re still early in the process and a new homebuyer, many sellers are providing virtual seminars for potential clients. Learn all about the home buying process through video conferencing software like Zoom, so you can continue your home buying journey and prepare yourself the best you can.

 

 

Visit Prospective Homes From Afar

If you’re practicing social distancing and working from home, the odds are – like most Americans – your daily routines are all out of whack. A break in the day is an excellent way to get out and refocus your brain. Give yourself a break and some fresh air by visiting a few properties each day. You can still practice proper social distancing by remaining in your car and driving by homes and neighborhoods you’re interested in. Just remember to keep your windows up! 

 

shopping for home during covid-19

 

Lending Requirements are Tightening

With the risk of first payment default, forbearances and lending liquidity lenders are tightening guidelines across the board and we are seeing increases to minimum FICO requirements. Make sure you are communicating with your lender regarding their specific requirements and how this may impact you.

 

 

 

Find Out if You Are COVID Proof

With lenders tightening their guidelines surrounding COVID it is important to ensure that you are COVID proof. Is your credit score able to withstand potential guideline increases? Will your lender still be in business to fund your loan? These are all important things to evaluate when purchasing a home.

 

“Keep in mind that once your credit is pulled, it’s good for 120 days so even if you are facing job uncertainty, do not be afraid to get evaluated and set a game plan moving forward,” Houck said.

 

 

 

Beware of Scams

Unfortunately, there are folks out there who will try to take advantage of us at our most vulnerable. The FHFA released information alerting mortgage borrowers about scammers who may try to steal personal data, your money, or your home. 

 

You should be vigilant and suspicious of anyone who asks for your credit card information over the phone, or any promotion that requires upfront cash payments. Scammers are using spoofed numbers and calls that may indicate they’re calling from a different location than they are. For more information on what you should look for and do, read the full announcement from the FHFA here.

 

 

Current Mortgage Borrowers: Help During COVID-19

If you’re a current homeowner with a mortgage, the COVID-19 pandemic is probably causing you a lot of financial anxiety. If you’re affected by COVID-19 and worried about meeting your mortgage payment obligations, here are a few things that can help you navigate these uncertain times: 

 

 

The CARES Act

mortgage loan

The Consumer Financial Protection Bureau guides federally backed Frannie and Freddie loans. The relief package, known as the CARES Act, is signed into law by President Donald Trump on March 27th.

 

If you are unable to pay your mortgage due to COVID-19, you must call your lender as soon as possible. They are overloaded with calls right now, but you will want to get this settled ASAP. There are a few different ways that lenders are helping the borrowers navigate the economic impact of the coronavirus. You’ll need to call them and ask.

 

 

Foreclosures and Evictions

As part of economic relief efforts in the face of the COVID-19 pandemic, the Federal Housing Finance Administration (FHFA) directed Fannie Mae and Freddie Mac to suspend all foreclosures and evictions. This includes both primary and secondary residences as well as investment properties, and it will last at least 60 days. 

 

While these are the guidelines for the government-sponsored mortgages of Fannie and Freddie, you should also contact your mortgage lender if you’re facing foreclosure or eviction due to COVID-19.

 

Also, be sure to truly weigh your options about a forbearance on your current home as this could impact your ability to qualify for a home loan in the near future.

 

 

What if I Can’t Make my Mortgage Payment?

If you can’t make a payment on your home loan due to COVID-19 problems, then you will probably qualify for a forbearance. A forbearance is a suspension of mortgage payments for a temporary period without penalty. In the case of the government loans of Fannie and Freddie, you also won’t incur any late fees or penalties during this time.

 

However, to qualify for a forbearance, you need to apply for it. That can take some time, so it’s best to make a phone call to your mortgage lender as soon as possible if you think you won’t be able to make your payment. Even if your mortgage is with a private lender, many of them have also offered lenient payment options and forbearance plans for consumers. Your best bet is to make a phone call and ask.

 

 

Armed with this new information, is your credit score where it needs to be? If not, now is the perfect time to address it. You can hire a credit repair company to help you bring it up, or learn about other ways you can start building credit on your own.

 

The Austin Housing Market: Tremendous Growth in 2019 & Predictions for 2020

The Austin Housing Market: Tremendous Growth in 2019 & Predictions for 2020

Reading Time: 4 minutes

Everyone wants to live in Austin! Since 2012, the housing market has continued to boom year after year, thanks to consistently ranking as one of the best cities to live in the United States. 

 

Add to the mix that many large companies, like Apple, Dell, and eBay, are moving their headquarters to the area, it’s no wonder that the Austin market is getting more and more competitive. If you’re looking for a home in Austin, you need to be prepared about what to expect. 

 

To help you, let’s look at what the market was like in 2019 and what you can expect moving into 2020, and what credit score you’ll need to get the best mortgage interest rate to make your Austin dream home a reality!

 

Austin Housing Marketing in 2019

Stated by credit repair Austin analyst,  the Austin housing market has gained incredible steam since 2010, almost doubling home values within the city. This year was no different. 

 

As of November 2019, a press release from the Austin Board of REALTORS stated that the median price for a single-family home within city limits rose 10.6% over the previous year! 

 

That’s a massive jump for a single year-over-year comparison! The average home price was at $400,000+ and climbing, with a high demand for single-family homes, which make up 47% of the city’s units. 

 

The demand for homes was unmatched by the supply, and the market reflected that dramatically. The average number of days a home was on the market before it sold was only 15. 

 

People were outbidding each other left and right, trying to get into the Austin city limits! 

 

Austin Housing Market Predictions for 2020

In 2020, you should expect a continued climb in both pricing and competition when it comes to the Austin housing market. Between the growing population and the shortage of housing, Zillow predicts that home prices will rise by 2.8%. 

austin tx housing market

A recent Zillow survey:

Indicated that 83% of participants believe that Austin will outperform the average U.S. home price growth over the next year. 

 

There is the possibility in 2020 that the Austin housing market will transition more towards a buyer’s market, but that will only happen if there is a significant increase in homebuilding efforts.

 

Austin will still have a substantial rental demand in 2020, with more than 55% of residents who rent rather than own, thanks to the rising housing prices. This poses an excellent opportunity for investors and homebuyers who want to purchase a property to rent it out. 

 

Rental income can make a massive difference to your pocket, and the way the Austin population and demand is booming, it’s an attractive investment.

 

What Credit Score Do You Need to Buy a Home in Austin?

If you’re looking to get in on the hot Austin housing market in 2020, you’ll need to make sure that your credit is in check. When you apply for a mortgage, your entire credit history will come under scrutiny, and your score will determine what interest rate you get for your loan. 

The higher your credit score, the better the rate. If your score is lower, you’ll have to deal with higher interest rates, and that’s even if you can get approved at all.

 

Knowing your credit score is one of the essential steps in preparing to purchase a home. Fortunately, if your credit score isn’t up in the 700’s, that doesn’t mean that you’re out of luck when it comes to getting a mortgage. The minimum score required depends on the type of mortgage you get. 

 

There are three common mortgage types:

 

Conventional

A conventional lender is typically a private bank or creditor, and while minimum credit scores will vary, they usually range between 620 to 640. 

 

USDA

The United States Department of Agriculture offers mortgages and loans to prospective homebuyers looking to purchase property in less industrialized areas. There is no set minimum credit score for these loans, but it’s recommended to have at least a 640.

fixing credit in austin tx

VA

If you’re a veteran, the Veteran Affairs department offers a variety of mortgage options and access to lenders to help you purchase your home. There are no set minimums, but lenders under this program typically require at least a 620.

 

FHA

The Federal Housing Administration offers loan and mortgage programs to help people with less than stellar credit purchase homes. With an FHA loan, you’ll need a minimum credit score of 580 and be able to put down a 3.5% down payment. 

 

You should also know that you’ll need to purchase mortgage insurance when you use an FHA loan to protect the lender if you are unable to make your mortgage payments.

 

With Austin still holding onto the top of the U.S. housing market, you should give some serious thought to purchasing an investment property. But to make it worth your while, you’ll need to make sure that you get the best interest rates possible with ensuring that your credit score is the best it can be. 

 

If:

You’re worried that your credit score will affect your ability to get a great interest rate on your mortgage, consider hiring a credit repair company. 

 

They are experts at helping folks repair their credit reports, and will help you understand your current situation, as well as put together a personalized, detailed plan to get your credit up to par. Don’t let your credit score affect you from realizing your dream of buying a home in Austin! 

 

 

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