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If you’re thinking about refinancing during the pandemic, you’re not alone. Interest rates are near historic lows making demand for refinancing high. If you’re wondering how social distancing rules may affect your ability to refinance, you’re also not alone. With all this in mind, we’ve pulled together some common questions and answers to help you understand refinancing in these uncommon times.
Who may be a good candidate to refinance during the pandemic?
- People who want to reduce their mortgage payment, consolidate debt, or access cash are among those who could benefit from refinancing now.
- People who have steady incomes—be it retirement income, rental income, wages, or other sources. No surprises here, but “steady” is the keyword in an unpredictable economy. If you are actively employed and your job security isn’t likely to be affected by the pandemic, refinancing may be for you. If you’ve been furloughed and have a return-to-work date, you may still be able to qualify.
Can I still refinance if my county is under a shelter-in-place order?
Depending on the county, most refinances are being completed successfully (in fact—less than 4% of Mr. Cooper’s customers’ loans are currently affected by them), though parts of the process may have changed due to safety concerns or office closings. Check with your loan officer for information on restrictions in your property’s county.
What changes are being made to address social distancing?
There are several ways your refinance process may be adapted to help it through to closing. Your loan officer may be working from home; your appraiser may do a drive-by appraisal rather than going into your house; or you may sign and submit documents via a secure online portal. But with the availability of mortgage apps, secure electronic records, and applying for loans online or by phone, many homeowners will see no difference in the process.
Can I get a 0% mortgage rate?
No. Mortgage rates aren’t at 0%, but they are near eight-year record lows. If you’ve heard about rates as low as 0%, there’s a good chance someone was referring to the Federal Reserve’s interest rate, which only applies to institutions like banks.
One last note: be prepared for your refinancing process to take a little longer than usual during the pandemic due to high demands and shelter-in-place orders.