There is quite a bit of commentary being shared by industry professionals and news organizations regarding the impact of temporary COVID-19 regulations and current economic trends on the housing, mortgage and real estate industries.
At Orion Mortgage, our specific expertise is on mortgages and we specialize in refinances (traditional, VA and Reverse) for Colorado homes. So how do those temporary regulations and current economic trends impact what we do and, as a result, impact your options for refinancing?
Let’s address temporary regulations first:
The Governor has ordered a temporary halt to evictions and foreclosures. Some tenants or borrowers may misunderstand and think their monthly payments have been cancelled because of this order, but this is not the case. The Governor can temporarily stop the legal action, but consequences are likely to follow if payments simply stop being made.
If you are a renter having problems making your monthly payments, you need to reach out to your landlord.
For homeowners with a monthly mortgage payment, the CARES Act provides a mortgage forbearance option for FHA, VA and USDA loans. You should contact your loan servicer (their number is on your monthly mortgage statement) to make sure you fully understand the terms and expectations of forbearance.
As for how economic trends may impact on your options for refinancing:
Is now a good time to do a traditional (forward) refinance? Our answer hasn’t changed much from prior to COVID-19. That depends on your current mortgage, your financial situation and your future goals. We always recommend an annual mortgage review and are happy to have that conversation with you free of charge and with no obligation to move forward. This conversation will either provide you with peace of mind knowing that you are already in a great mortgage situation or with options to consider for a refinance.
Since the majority of our refinance business involves Reverse Mortgages, we have paid particular attention to what is happening in this arena. For borrowers who already have their Reverse Mortgage in place, there seems to be less financial anxiety. Borrowers don’t need to worry about monthly mortgage payments, and for those with a line of credit, they know it is guaranteed not to be cut or closed, unlike borrowers with a HELOC or those depending on credit cards.
For homeowners who have been on the fence about getting a Reverse Mortgage or have heard negative comments from their personal bank (probably because they aren’t offering this particular product) or friends/family who are relating second- or third-hand stories, we are happy to answer your questions and address your concerns.
We’ve come across a video that does a great job presenting the difference between a Home Equity Line of Credit (HELOC) and a Reverse Mortgage line of credit (known as a HECM – Home Equity Conversion Mortgage). The speakers in this video throw around some industry jargon, so if you would like clarification on anything that is said, give us a call – we’re always happy to help translate!
There is also reference made to a “Platinum Product” in this clip. This is a specific non-FHA Reverse Mortgage product. We have this and similar products available, but have not generally recommended them for the same reasons Mr. Andelman discusses in the video. That being said, we can provide these non-FHA products. They generally are attractive for borrowers with homes valued above $1,000,000 and who don’t mind paying higher interest rates.
At Orion Mortgage, Inc., our top priority is to match each borrower to the loan that best suits their financial circumstances and ultimate goals.
As always, if you have any questions about this video, our comments or refinancing your Colorado home, please contact us at 303-469-1254 or email Don@OrionMortgage.net