Michael Spears: Your mortgage and the pandemic

Since mortgage rates are at record lows, I have received calls from many of my clients inquiring whether it would be beneficial to refinance. The pandemic, which created the lower interest rates, has also changed the underwriting process causing many banks to raise their requirements.

Some considerations I look at are the number of years they plan to stay in the home, their current interest rate, how long they have been in the mortgage, and if their current interest rate is fixed or adjustable. Quite often, you can find online calculators to determine the break-even cost and interest savings to determine how long it will take to recoup the cost of refinancing over the life of the loan. In some cases, it is easier to just add an extra monthly payment to principal only, which in essence is called built-in refinancing without the cost. If you are in a position where the pandemic has caused a complete loss of income or a reduction, you should contact your lender immediately.

Many lenders have set up programs to defer payments for a few months (that will be added to the end of your loan) but help get you through this difficult time that will eventually pass. During the Covid-19 pandemic, programs have been created for renters whose landlords have a mortgage established through Fannie Mae or Freddie Mac which allows them to postpone mortgage payments for up to three months and allows renters who have experienced hardships from the Covid-19 national emergency avoid eviction. 

Eastern North Carolina is made up of strong and caring individuals and we will all get through this together. 

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Michael E Spears is located at 2906 Hull Road, Kinston, NC 28504 and can be reached at 800.655.9487. 

Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance Agency.