Times are wild… in the world, and in real estate. You’re just trying to keep your job, stay COVID-free, and hopefully get in some physically distanced fun. And yet, the logistics of life keep moving along — such as home mortgage payments and student loans and other everyday financial details. If you want to refinance your home, should you hit the brakes or move forward full steam ahead?
As it turns out, as of June 1st, 2020 mortgage rates were low and falling fast. Whether you have a four-bedroom home in Sacramento or a modest townhome, this may be the time to dig into your equity and lock in a lower interest rate. Applying to refinance your home may allow you to take cash out and push through hard times. At the very least, it can lower your monthly payment and offer financial relief.
Here are some pros and cons to refinancing your home in 2020.
Pros:
When it comes to 2020, many things may be trending downward in a bad way. But mortgage rates are one of the things we love to see going in a southern direction. Lower U.S. mortgage rates are one of the few silver linings we have, people! There are many reasons to consider a refinance.
- 15-year fixed rates were down to 2.84% as of June 1st. If you’ve been living in your home for a while, taking advantage of low 15-year rates could actually mean paying off your home sooner than you’d imagined.
- Mortgage rates have stabilized. As of the third week of June 2020, most experts agree that the current rates will hold for at least another week. This means you have take at least a little bit of time to contemplate your move.
- Locked in mortgage rates work in your favor. When you lock in a rate, it means you are guaranteed the rate for 30 days. Even if 2020 mortgage rates start to climb again, you have a month to complete your paperwork.
Cons:
In addition to the positive possibilities of refinancing your home in 2020, there are of course a few possible downsides. Your particular situation may not be ideal for refinancing right now, especially if you were hoping to get it done within the next month or so. Here are some of the reasons to exercise caution about doing a home refinance this year.
- Closings are taking longer in 2020. Thanks (or no thanks) to COVID-19, fast closings are hard to come by. Underwriters, lenders, and other professionals are working remotely and processes can get delayed. If you want a fast refinance, you could end up disappointed.
- Depending on how well your property value is holding up, you may not be able to do a large cash-out refinance. If getting money out of your property to pay off other debts is your top priority, you may want to wait until your property value is on another up swing.
- The economy is unpredictable. It’s impossible to know when or if things will reopen as normal and what type of recession may be ahead. If you’re relatively happy with your rate and lender, staying put with previously guaranteed terms may be the right choice.
If you are not eligible to refinance your home in these trying times, it’s still possible to sell. Yes, even now! Companies like California Family Homebuyers are here and waiting to help. We offer a simple assessment and offer process, and some of our clients close as fast as one week! If you’re unsure about how to sell a property that needs some work or you just don’t want to go through the traditional MLS for any reason — give us a call to see if we can buy your home ASAP and help you move on.