With COVID-19 affecting nearly every industry, almost every employee is now required to work from home.
If you specifically take a look at how the mortgage industry is affected by COVID-19, you will notice how Wells Fargo, JPMorgan Chase, Quicken Loans, and others are telling their employees to work from home.
It’s evident that the mortgage industry is taking a financial hit.
They are changing their approach to work and how they work with customers.
To understand the full effect, here’s everything you need to understand how the mortgage industry is adapting to the coronavirus pandemic.
Refinance
The Federal Reserve recently cut rates to help boost the economy. Some rates are down to 2%, which helps you save in the long run when you are paying for your home.
With interest rates dropping in order to boost the economy, the mortgage industry is adapting customers who are looking to refinance their homes.
If you’re trying to find a mortgage rate, you can see how to shop for mortgage rates here which can offer some insight.
Buying a Home
With mortgage rates dropping on 30-year and 15-year fixed-rate loans, the mortgage industry is trying to adapt to a new market, hoping that people continue to buy and sell homes.
The mortgage industry is hoping people continue to buy homes with interest rates drop.
Higher Standards
Mortgage industries are also adapting by making higher standards. They want more people to buy, but not increase the risk of people buying and create a similar fiasco to the 2008 crisis.
For instance, mortgage lenders increased the minimum FICO score requirement to 680 if you want to take out an FHA, VA, and USDA loan. In addition, there is a higher debt-to-income requirement along with other requirements that can make buying a home more difficult.
Forbearance
While a lot of mortgage industries are highering their standards, they are also being more lenient when it comes to forbearance. They are delaying payments because people are losing their jobs or their job is on hiatus.
With no income and no job, mortgage lenders are taking action. They are ensuring that people can delay their payment with the approval and guidance from regulators.
While everything is a crisis for every industry and every person, mortgage lenders are finding a way to adapt and help people.
How the Mortgage Industry Is Affecting You
The mortgage industry is trying to adapt to the Federal Reserves’ cut of interest rates. They are trying to adapt to a culture in which fewer people are buying and selling homes because of COVID-19.
By cutting interest rates and tightening standards, the mortgage industry is hoping to reduce risk and at the same time find people who want to buy homes. Overall, the mortgage lenders are trying to help people adjust through this crisis, to give them hope that they find a home.
You can also find other helpful articles in regards to COVID-19 and how you can adjust to this cultural change.
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