COVID-19 has left a prominent mark on the mortgage industry. According to the Mortgage Bankers Association, the Refinance Index reached its highest level in ten years. This highlights coronavirus’s significant impact on home refinance loans.
Unfortunately, there has been a steady rise in COVID cases, which has impacted the national economy, compelling lenders to modify mortgage rules by the day. This has become a point of concern for homeowners worried about the challenges they might face with their mortgages.
Changes in Home Refinance Loans During the Pandemic
The pandemic has introduced several changes in the mortgage industry. For starters, lenders have adapted to the use of technology during the COVID-19 pandemic. Now, borrowers are encouraged to partake in the digital home refinance process.
In addition to the digitalization of the mortgage industry, the pandemic also left a mark on some refinancing regulations. Let’s take a look at some of these significant changes.
Your Credit Score Is More Important than Ever
A healthy credit score is critical to get a home refinance loan at a low interest rate. Although the pandemic has changed the regulations in many areas, the integral role of a good credit score remains unaffected. In fact, it’s even more important than ever before.
Because of the number of job losses, lenders are being careful about who they approve for loans. Borrowers will have to meet higher standards to qualify, which includes having good credit and being able to provide proof of steady income.
Although you can still find several loan options for a low credit score, improving your score before applying for refinancing is essential. This is because it improves your odds of getting a lower interest rate.
There Has Been a Drop in Mortgage Rates
The ideal time to get a home refinance loan is when mortgage rates are low. Mortgage rates are one of the major areas affected by the pandemic. In fact, the average mortgage rate in December last year was 3.72%.
The Mortgage Bankers Association predicts that rates for 30-year fixed-rate mortgages will remain at 3.3% on average during the fall of 2021. So, if you are looking for home refinancing opportunities, now is a good time to take advantage of the low mortgage rates.
The global pandemic has changed the mortgage industry as we know it. The good news is that it’s not all bad. While regulations are stricter, mortgage rates are low. So, if you’re considering a home refinancing loan, now may be a good time to apply.
Get Expert Guidance on Home Refinance Loans
Let us help you make sense of the complex situation. You can schedule a consultation with Mortgage Solutions Financial to discuss your options for home refinance loans. Our experts can guide you through every step of the process. Call today to get started!