PHOENIX — With record low mortgage rates, is now the time to refinance or set out to find your first home? And how does the coronavirus factor into all of this?
Earlier this month, mortgage rates hit 3.13% – the lowest rate in at least the last 50 years. It means a flurry of owners wanting to refinance. However, in order to keep up with the race for the lowest rate, lenders might not be matching the low rates.
“They only have a certain amount of staff to process those loan applications,” said Holden Lewis, a Mortgage expert with Nerdwallet. “So, when they keep rates above what they could be, that’s not greed. That’s self preservation.”
Holden says while rates are rising a bit, they are still low, and if you want to refinance, ask for a rate lock. Typically for a period of 35-40 days, or in this case, more.
“Ask the loan officer to be kind of generous with the rate lock time. Just make sure that if COVID-19 hits the back office and slows down applications, that they can still process it in time,” said Holden.
An obstacle for buyers: Holden says he sees a small inventory of homes available getting smaller. Some owners are refinancing and staying put, while others have fears about opening their doors to buyers.
“So, we’ve already started to see some sellers taking their homes off the market,” said Holden.
So, is it a good time to buy or refinance? Holden says you have to answer that for yourself. How much do you really want a home? Do you feel stable in your job with the income you need?
If that’s you – HERE are comparison tools to help you decide what steps to take next.