Mortgage interest rates are oh so low. Some homeowners have managed to refinance. Refinancing can mean lower monthly payments. For those who are facing unemployment now may be the best time to refinance.
Lower interest rates will provide a little relief for homebuyers who will be experiencing high prices and a strong seller’s market in 2021.
The rates in the chart are averages from FreddieMac and are available to people who have great credit scores and incomes that afford mortgage payments.
At one point I said that mortgage interest rates would not go below 3%. I am very happy to be wrong about this.
During the great recession, we had foreclosures and short sales. As I recall there were loan modification programs for borrowers but the rules kept changing about who was eligible and who was not. Sometimes people who were behind on mortgage payments were eligible and sometimes they were not.
During the current crisis and it is a crisis there are forbearance programs and various laws that prevent foreclosure. Forbearance programs allow borrowers to skip payments. The payments are added to the end of the loan repayment period.
There is help for those who are struggling to make mortgage payments. The Minnesota Homeownership Center is a great place to start. They are a non-profit and provide free counseling and are generally knowledgeable about every program out there that can help homeowners.
As always be aware of scams. I am not aware of the latest but I know there are always people out there ready to trick people out of their homes and life savings. If a program sounds too good to be true the Minnesota Homeownership Center can help with that and the Minnesota Attorney General’s website has some useful information on it about scams.
Don’t be afraid to talk directly to your lender if that is possible. If you have n FHA loan there may be federal assistance. Serious mortgage delinquencies are up from a year ago. the last number I saw was at around 7% as compared with less than 4% last year.
This year has been the year for new lows as mortgage interest rates hit new lows for the 10th time. I told a client earlier this year that I didn’t think rates would go below 3%. I am happy to be wrong.
Speaking of records, 2020 has been breaking a lot of long-standing records. Did you know that we hit an all-time high in unemployment in 2020? 14.70 percent in April of 2020.
The Minnesota Homeownership Center and Habitat for Humanity of Minnesota have entered into a partnership aimed at helping homeowners facing financial difficulties due to COVID-19 to keep their mortgages in good standing and avoid foreclosure.
The two organizations will administer up to $10 million in relief through Minnesota’s newly established COVID-19 Housing Assistance Program (CHAP)
To qualify for assistance, Minnesota households must meet all of the following criteria:
Income at or below 300% of federal poverty guidelines, with a preference for those at or below 200% of federal poverty guidelines.
Have an eligible expense incurred after March 1, 2020, that is past due. Housing assistance funds can only be used for eligible expenses incurred between March 1, 2020, and December 30, 2020.
Be unable to make one or more payments owed because of the public health emergency due to unemployment, illness, or another COVID-19 related issue.
The program covers past-due housing expenses such as:
Interest rates on mortgages are very low. For people who have jobs, this might be the perfect time to refinance. A few of my clients who had higher interest rates did just that to lower their monthly payments.