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Why COVID-19 Is Making it Harder to Get or Refinance a Mortgage
Mortgage rates are some of the lowest ever seen, but many buyers are having trouble accessing them due to the current difficulty getting a mortgage. Homeowners are also having a hard time gaining approval to refinance their homes, leaving many in a tight spot.
The rising unemployment rate due to the shelter in place orders has caused lenders to tighten their loan requirements. Many lenders are now requiring larger down payments on mortgages as well as a higher minimum credit score. Many companies are also looking more closely at debt to income ratios and employment status before approving a loan.
Historically low refinance and mortgage rates have also caused a surge in refinance applications that has limited the amount of mortgage credit currently available. Mortgage Bankers Association reported a 16% drop of available credit in March, the lowest it has been since June of 2015. So, if you’re thinking about buying or refinancing your home, work on maintaining your credit score.