Can you Refinance During the COVID-19 Coronavirus Outbreak?

There’s panic running through America and everyone is wondering what their new normal will look like, including their finances. An area many people are concerned about is their mortgage. Refinancing now could possibly save many homeowners money or put them in a better financial situation by tapping into their home’s equity, but is it even possible during the pandemic?

Fortunately, the answer is ‘yes’ you can refinance, but the parameters may look a little different, but I’m here to help with a few tips.

Maximize your Credit Score

I can’t stress this enough. You need a good credit score to refinance today. Lenders are going to be picky. They only want the best of the best right now. Pull your credit report from www.annualcreditreport.com (it’s free) and see where you stand.

Look closely at all of your trade lines. Do they all belong to you? Is everything reported correctly? Are you late on any payments right now? Are your credit cards maxed out? Now is a time to fix all of this. Obviously, it won’t happen overnight, but each step counts. Get current on your debts and pay your credit cards down to more manageable balances. This will affect your credit score in a good way.

Make Sure you Have Stable Employment

Another area lenders will closely scrutinize is your employment. Obviously in today’s environment, they have reason to worry. They’ll be much stricter about evaluating your employment and its continuance. That’s not to say that requirements were relaxed before this happened, but they’ll be even more scrutiny this time around including phone calls, written verification, and follow-up verification right before closing to make sure nothing changed because we all know things can change in the blink of an eye today.

Have Compensating Factors

Here’s a little secret – lenders love compensating factors. These factors ‘make up’ for any risk factors. That’s not to say lenders are going to willingly accept too many risky factors today, but if you have ways to offset anything risky, it will work in your favor. Compensating factors include:

• Stable employment – This is great for essential workers right now
• Assets on hand – Liquid assets serve as ‘emergency funds’ should you lose your job or get sick
• High credit score – A high credit score speaks volumes to lenders right now
• Equity in your home – If you have substantial equity in your home, it gives lenders peace of mind knowing the collateral for the loan is valuable

If you’re thinking of refinancing, I’m here to help you every step of the way. I know we are in unchartered waters right now and getting a mortgage may seem impossible or overwhelming. I help make it easy by helping you through the entire process. I can match you with the right lender and help you understand everything they need to make your refinance process as seamless as possible. Call me today to get started!