As the economy slowly recovers after the coronavirus shutdowns, the real estate and mortgage markets have rebounded rapidly. Home buyers are eager to move during this condensed summer market, especially since it’s hard to say if we’ll experience more shutdowns this year as the virus numbers continue to rise again throughout many states. At the same time, homeowners have been rushing to refinance and take advantage of historically low mortgage rates and high home values.

These factors have made it the perfect storm for lenders to get a lot done in what could be a short amount of time. It’s safe to say nobody knows exactly what the rest of 2020 has in store, and we haven’t even gotten to the full turbulence of the election yet! Mortgage rates could go down further. They could spike upward. People are taking action while the conditions are ripe to do so.

Historically Low Rates in June

As a result, June turned out to be the best month ever for mortgage rates. The average lender is offering all-time low rates, with some offering conventional 30-year fixed-rate loans under 3% in top-tier scenarios. The key to that statement is the phrase “top-tier.” Lenders and banks are doing everything possible to mitigate risks. More regulations and requirements have been put in place, making it harder for some people to qualify for mortgage loans. “Top-tier” refers to the applicants who are in excellent financial standing. They have great credit scores, steady high incomes and are able to put a lot toward their down payments. 

Risk Mitigation

Lenders are wanting to avoid high-risk scenarios with borrowers who have any major question marks surrounding them. Is their job secure? Are they a risk to apply for forbearance? Can they afford the home they are buying? Underwriters have to be a lot more careful and apply much more scrutiny when reviewing any mortgage applicant right now. High-risk borrowers may still qualify for a mortgage loan, but that does not mean they’ll be getting top-tier rates. In fact, rates are fluctuating wildly right now depending on the borrower, even as the overall averages stay historically low heading into July thanks to several positive economic indicators.

What Lies Ahead?

Lenders, like everyone else in the world, are watching the news carefully and trying to figure out how COVID-19 will affect the economy as a whole, as well as mortgage and real estate markets. As the economy recovers, there will be pressure for interest rates to move upward. Yet, there is still fear that the second wave of the virus (some health experts argue we’re still in the first wave) will slow down the economy once again. San Diego County was one of 19 in California just ordered to shut down bars and other businesses for a second time while also temporarily eliminating dine-in restaurant service yet again.

Time to Make Your Move

If you are in good financial standing, now is an incredible time to apply for a new mortgage or to refinance your home. Even if you are a high-risk candidate, the rates are still really low if you are able to qualify. You just have to set your expectations accordingly and make smart decisions to avoid getting caught up in a mortgage loan that you can’t really afford. In the mortgage world, now is definitely time to take action. However, it’s not a time to be taking major gambles.

If you are buying a home or looking to refinance your mortgage loan with today’s low rates, contact Transparent Mortgage today at (858) 761-7795.