MORTGAGE UPDATE
INDUSTRY UPDATE PROVIDED BY MORTGAGE BIZ OF SOUTH FLORIDA
LET’S GET THROUGH THIS TOGETHER
As COVID-19 turns out to be something more serious than we have all expected, it has forced us to implement changes to our status quo. Through programming provided by the Greater Hollywood Chamber of Commerce, we were accustomed to meeting other members, attending events, and industry-specific groups on a weekly basis with little to know thought that changes might be on the horizon. We were all riding a beautiful wave that came to what felt like a halt for some. While all this can be scary due, in part, to the uncertainty of it all. We should do our best to support one another and share information that can help inform how to navigate through this uncharted territory.
Quick changes to a new-ish normal can be stressful and cause confusion. You wouldn’t be alone if you’ve had these feelings over the past week. While I’m unable to speak to all industries about what the short-term implications of the COVID-19 pandemic will be, I can speak to my experience as a mortgage professional. I’ll first address how I am continuing to work with clients and partners from home. Then I’ll answer a few of the questions I’ve received.
With the advent of technology, I’ve worked to be well versed on upcoming technologies in and outside of my industry to allow me to run my business solely from the computer. Although we aren’t together in the physical, we can get together using video conferencing tech like Zoom. For my mortgage work, I use an online client portal to accept documents, pre-qualify and communicate with my clients about their loan application status. It’s something we implemented before the onset of COVID-19. It’s allowed us to conduct business as usual in order to answer important questions about the future of the markets and what’s been in the media.
FAQ
All in all, change is the only constant right now. Let’s all make the best of being home as we continue to work (if this applies), spend time with family, engage with others using video conferencing, and the like. I’m certainly here at this time to answer whatever questions that come to mind about the markets, mortgages, and the industry going forward.
This industry update was provided by Nadia Alcide
Mortgage Consultant of Mortgage Biz of Florida
So, the Fed Cut Rates...Do I get a lower mortgage interest rate?
The Fed Rate cut and mortgage interest rates are almost like comparing apples to oranges. Think of it this way, a mortgage at a certain rate could potentially be out in the market for 30 years (with the assumption that the borrower does not refinance or pay the loan off early) whereas the Fed interest rate can change day to day because it is actually the rate at which banks borrow money from the Federal Reserve. Investors of mortgage-backed securities assume calculated risks based on what's happening in the market, jobless claims, other projections and the ability to get a return on their investment.
I'm in the middle of the process, should I still go forward? Or should I get started?
If you are in the market for purchasing property, we suggest you do not stop as long as this a goal and your employment prospectus remains the same. Some have been laid-off or furloughed. It’s predicted if we stay home to work to stop the spread, folks should be back to work again soon. Let’s focus on what you can control and continue to stay in touch with your real estate professionals. Remember, we all made it through the 2008 downturn. We will be back on track again soon.
Have you seen rates increase or decrease?
Across the board, rates have increased or rather the upfront cost associated with obtaining a lower rate over a 15 or 30 year term. While it is not impossible to obtain the historically low advertised rates, they may come at a higher cost than they were less than two weeks ago. With some uncertainty in the markets, risks are being adjusted according to what will happen with jobs, borrower’s ability to repay, etc. Don’t panic and don’t get discouraged if you are in the market for a home. A knowledgeable mortgage professional will help to navigate options for and with you. Things will regulate and hopefully get back to normal soon.
I have a mortgage but I've been hit with uncertainty, what do I do?
While it’s currently on a case by case basis, borrowers can reach out to their mortgage loan servicers to request forbearance or deferment if they are experiencing the inability to repay at this time. However, if you can, restructure or accelerate your payments to pay off your mortgage obligation quicker.