Forbearance

Real Estate Finance News Recap: August 2021

Here’s a quick digest of what happened in real estate finance last month:

+ Mortgage rates have stabilized around 2.87% (as of 9/2/21), as economic growth and inflation have moderated in the last month.

+ 1.71 million borrowers currently remain in forbearance. Of those, 400,000 homeowners will enter their final month of forbearance in September, unless the maximum term is extended.

+ With rates remaining low, some homeowners may want to finally get around to refinancing their home. No-cost closings can help some homeowners refinance without out-of-pocket costs.

 


 

Have questions about what’s happening in real estate in your neighborhood? Let’s chat!

Interested in the Denver real estate market? Subscribe to our weekly emails to get more information like this.

Subscribe

Real Estate Finance News Recap: December 2020

Happy New Year! Here’s a quick digest of what happened in real estate finance last month:

+ Mortgage rates continue to remain near record lows at 2.67%, down from 3.72% a year ago.

+ Not looking to move, but wondering if it’s worthwhile to refinance? Check out Nerd Wallet’s refinance calculator to find how much you can save each month.

+ Forbearances rose for the third consecutive week, as roughly 2.83 million homeowners are currently suspending mortgage payments. Fannie and Freddie announced that multifamily property owners with existing forbearance agreements can extend their agreements for up to three months.

 

Have questions about what’s happening in real estate in your neighborhood? Let’s chat!

Interested in the Denver real estate market? Subscribe to our weekly emails to get more information like this.

Subscribe

U.S. Real Estate News Recap: September 2020

Here’s a quick digest of what happened in U.S. real estate last month:

+ The national median home price rose 11% since last year — the largest annual increase in over 6 years.

+ COVID-19 has caused lumber prices to skyrocket more than 160%. Home buyers can expect to add about $16,000 to the price of a new house.

+ The share of mortgages in forbearance decreases to 3.4 million homeowners — a drop of 6 basis points.

+ With 84% of parents considering a home education model for their kids, back to school is affecting home buying decisions.

+ Think an empty nest is looming? Think again. 52% of young Americans ages 18 to 29 are now living with at least one of their parents.

+ When COVID-19 changes education plans, here’s how to set up a homeschool space anywhere.


Have questions about what’s happening in real estate in your neighborhood? Let’s chat!

Interested in the Denver real estate market? Subscribe to our weekly emails to get more information like this.

Subscribe

What Forbearance Means for You

Over 4 million Americans have put their loans into forbearance.

Up until recently, there has been a lot of uncertainty about what it means when a borrower’s loan goes into forbearance. Will there be a huge lump sum owed at the end of the forbearance period? Will it have an impact on credit? Will people be able to purchase or refinance in the future if a loan has gone into forbearance? Initially, the CARES Act did not provide clear guidelines or statements regarding any of those questions, resulting in many borrowers unable to take advantage of record low rates and uncertain if the forbearance policies in place would cause more harm than good.

Now for the good news. On Tuesday, May 19th, the Federal Housing Agency (Fannie Mae and Freddie Mac) provided clarity regarding what forbearance means to borrowers, and gave guidance on how Fannie Mae and Freddie Mac loans will handle repayment, as well as how it will affect a borrower in the future.

Here’s what it means for you.

Let us start by saying, if you’ve not been impacted financially by COVID-19 and can keep paying your payments on time and in full, you should. Forbearance or deferment is not forgiveness, and that money does not go away. So, if you can still pay, that is your best option.

Can you purchase or refinance in the future? Yes! Fannie Mae and Freddie Mac borrowers will be allowed to purchase a new home or refinance their current mortgage even if a loan has gone into forbearance. The borrower must show three consecutive months of payments after the forbearance period has ended. Additionally, if your loan has gone into forbearance accidentally (many Fannie Mae and Freddie Mac loans were being placed into forbearance, if a borrower even breathed the word), you can purchase or refinance immediately if your payments are up to date, without having to wait the three-month period.

Will you have to owe a lump sum at the end of your forbearance period? Not unless you want to. Here are a few ways borrowers can exit a forbearance plan:

  • A borrower can pay the sum of the missed payments in full when their forbearance period ends.
  • A borrower can defer the payments to the end of the loan. For example, if you were in forbearance for six months, you could tack those six months onto the end of your loan, adding an additional six months of payments before maturity. You can do this for up to 12 months, per the Federal Housing Finance Agency.
  • A borrower can use a repayment plan. They can pay the amount due or missed payments, over the course of 36 months or until they are up to date on their payments.

 

At Love Your Hood, we’re committed to being a resource for you and all of your housing needs. Please don’t hesitate to reach out to one of our trusted realtors if you have any questions regarding forbearance, or buying and selling in the current climate.