Spaces Blog

Mortgage Deferment & Is Now a Good Time to Refi?

As developments with regard to COVID-19 continue, there is a lot to keep in mind with regard to the housing market. While it’s still too early to tell how all of this will impact our local housing market in the upcoming weeks and months, we are watching the data closely and will continue to update you as we can.

Today, we wanted to send out some information and resources to you if you find yourself laid off, with reduced hours at your job, or needing to free up the equity saved in your home. Read on for details.

On both the local and federal level, lenders are mobilizing to help homeowners during this challenging time. On Tuesday the agents in our office had the opportunity to hear from Elizabeth Million (Senior VP of Mortgage Lending) and Ian Bennett (Senior Mortgage Loan Officer) from Elevations Credit Union. Elevations does a large portion of the mortgages in Boulder County and Denver so they are an integral piece of our housing market here.

Elizabeth and Ian told us a few really important pieces of information that we wanted to pass along. First, they said like national banks, Elevations is offering a couple of different mortgage deferment programs to their borrowers who may be going through hardships. The details as I understand them are as follows, but reach out to your loan officer for more information and specifics if these programs are of interest to you. Also, programs may change from lender to lender so it’s best to reach out to the loan officer who did your loan or the servicer of your mortgage payments to see if you would qualify. Here is what you need to know:

Mortgage Payment Deferment
1. Elevations is offering three months mortgage deferment with those three months being due in the 4th month. If in the 4th month you need to defer more payments, you would need to supply documentation at that time and those deferred payments would likely be added to the total balance of your loan in what’s called a loan modification. Different lenders will have different programs. Call your loan officer or mortgage servicer for more information. Also, these programs are not being implemented automatically. You must reach out to your lender or loan officer if you need to defer mortgage payments.

Time to Consider Refinancing
2. For those of you who have saved up equity in your home, now is a great time to consider doing a refinance of your home to pull cash out or to lower your monthly payment with a lower interest rate. Interest rates went back down again yesterday. We recommend reaching out to your lender to find out if it would be a good move to refinance now.

One smart approach would be to pre-emptively fill out a refinance application with your lender. That way, if interest rates drop really low on any given day, you are ready to pull the trigger on that day, lock your rate, and save yourself, in some cases, a few hundred dollars a month. Aside from the time spent filling out the application, there isn’t any down side to taking this approach. You can set the target interest rate with your lender and they can automatically lock your interest rate if interest rates dip that low. Interest rates are very volatile right now so it’s wise to work on this proactively instead of re-actively. Also, if a lay off may be in your future, the time to consider a refinance is now. If you are laid off, a refinance may not be available to you.

Reach out to Your Lender and Keep Them in the Loop
3. We also learned from Ian and Elizabeth that, at this time, mortgage companies are not supposed to report late payments to the credit bureaus. However, if you need to defer or make late payments, do not stop making payments without talking to your lender. Call your lender, let them know your situation and work out a plan with them.

The most important take-a-way is that there’s no harm in reaching out to your lender over the next few days to find out if there is anything that you should do given your specific situation. Many of you will find that you’ll get some benefit out of that call. If you need names and contact info of some good, local lenders who can help you, don’t hesitate to reach out and we can get you that information.

Ken and I would love to hear from you. How are you, what can we do to help, and how are you making it through this unprecedented time? For our part, we are spending lots of time outside, doing our best to stay away from the news, and doing lots of dog walking with our pups, Mac and Buckley. Also, on the docket for today is some much overdue yard work.

Thinking of you all and hoping you are staying safe and healthy-

Allison and Ken