The current pandemic and corresponding economic crisis has many people concerned about their financial strength and durability for the long haul. If you have equity in your home, you might consider doing a home refinance either to withdraw cash or to spread the remaining balance out and lower your payment. To refinance at this point is a special challenge because bank hours are limited. How can you refinance your mortgage during the coronavirus shutdown?
Make Sure It’s Worth It
Take a look at your home’s current valuation, either by the property tax valuation or current real estate prices in your neighborhood, whichever is higher. Check your current mortgage to see how much you still owe.
Your lender will be limited on how much they can lend you due to restrictions still in place since the 2008 financial collapse. But if your credit is good and you have a good relationship with your lender, you may be able to find a good deal by refinancing with the same institution.
Contact Your Current Lender
If you’re looking to take out cash from your equity, your lender may be able to set up a Home Equity Line of Credit, or HELOC, account that you can tap when you need it. Not only will this save you paperwork and legwork, but if it turns out that you don’t need the funds, you won’t have any payments due.
Be aware that the interest rates on HELOCs can vary. Also, be sure to only spend HELOC funds on special expenses.
Ultimately, most HELOC loans have a drop-dead date, where you either need to pay or refinance the debt. If you’re uncertain about your future employment, don’t get a HELOC. In the event of a basic refinance with cash out, working with your current lender can save you fees if you have a good payment history and a strong credit rating.
Check Your Credit
If you’re ready for a full refinance and are open to switching lenders, there are many options online that can help you get a better rate or longer terms for shorter payments. However, your credit rating needs to be at least 600 for most online banks.
If your credit rating has taken a hit, it may be better to talk to a consumer counseling agency to see if they can help you:
- Address the most problematic issues on your credit report.
- Find a consolidation loan to get rid of high-interest debt.
- Find a mortgage lender who can work with you regardless of current credit issues.
If you find a national lender who can help you put together a mortgage without having to visit a physical bank, take advantage of all the services they offer. We all need to keep some money in savings, and traditional banks offer few benefits to savers as interest rates are extremely low. You may get higher interest rates from an online bank.
It’s All Mobile
If you work with an online bank for your mortgage, be aware that it will all be mobile. You’ll need to arrange a time to sign the paperwork in the presence of a mobile notary; here’s an option that allows for that.
The good news is that a mobile notary can actually save you a fair bit of time and effort. If you and your spouse will both be on the loan and are working in different locations, your mobile notary can do the legwork for you.
Check Out All Options
Once you find an online bank that will serve your needs, make sure you check out everything they offer. If you’re looking at investment property or considering a construction loan, your new bank may be able to help you move into the future with confidence. All of it can be easy and portable.
Refinancing your house is a great way to make sure you have cash in hand in the event of a crisis. If you have the equity and the credit, you can protect yourself against financial hardship. Be ready to check out several banks, in-person and online, to get the best deals.