In this week’s episode, Brian and David talk about low rates (with a few caveats), throw around some new F-words, and remind you to call your lender.
This week’s highlights:
- Rates are favorable for new home buyers, but many stipulations have risen for applications and refinance
- Furlough? Forbearance? Federally-backed loans? There are many F-words in the mortgage world this week
- JP Morgan Chase is making drastic changes in its mortgage borrowing standards to counteract COVID
The new “F” word
A hot topic in the mortgage world right now in light of the COVID-19 uncertainties is forbearance, which is an agreed-upon plan between the mortgage borrower and the mortgage servicer due to financial hardship entailing reduced or suspended mortgage payments for a specified amount of time with no penalties.
Under the language of the CARES Act, many people furloughed or unemployed due to the COVID-19 crisis qualify for a forbearance agreement if they have a federally-backed loan (a loan that is securitized, insured, guaranteed, or owned by Fannie Freddie, FHA, VA, or USDA).
Jumbo loans (mortgages with balances greater than $510,400) or a nonadjustable rate loan (mortgages that are not eligible for Fannie Mae or Freddie Mac financing) do not qualify as federally-backed loans.
Contact an Accunet home loan expert to help you determine if your loan is federally-backed.
Ch-ch-changes with JP Morgan Chase
JP Morgan Chase is significantly tightening their mortgage lending standards due to the overall economic uncertainty affecting the lending world.
Chase Bank is one of the top 5 mortgage lenders in the country, but they are currently overwhelmed with applicants hoping to take advantage of historically low rates.
In an effort to curb demand, Chase customers will now need a credit score of at least 700 and will need to put down 20% of their desired home’s value (those applicants who make 80% or less of an area’s median income may qualify for Chase’s DreamMaker program, which gives some leniency on a down payment.)
Chase and some other institutions are also hesitant to lock in a lower rate until a loan is approved or are deflecting refinance requests.
Accunet advises you to call your mortgage lender to ensure the terms on your pre-approval letter can still be met.
Accunet can help you get a fully-verified Rock-Solid Pre-Approval with a $2,000 guarantee.
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