Get Answers To Your Forbearance Questions

Forbearance Q & A:

Included as part of the CARES Act recently passed by Congress homeowners with mortgages owned by Fannie Mae or Freddie Mac, or insured by the FHA or VA, are entitled to a mortgage forbearance. Let’s answer a few of the common questions about what this means for you.

What is a mortgage forbearance?

A mortgage forbearance is the ability to pause your mortgage payments for a period of 3 to 12 months.

Who would qualify?

Any homeowner is eligible for forbearance under the new act if they have had a financial impact from Covid-19. Proof of hardship is not necessary under the new law.

What happens to my payments if I enter a forbearance?

For 3-12 months your payments will accrue but not be collect by your loan servicer. Upon the end of the forbearance you will be required to pay, in a lump sum, the total of the payments that were put on hold. If at this time you are unable to make up the payments that were put into forbearance you can review options for loan modification or payment plan to get caught up.

Will my payments be reported late?

No – under a forbearance as a result of the CARES act you will not be reported late to the credit agencies.

Are there items I still pay if I enter forbearance?

Yes – homeowners are encouraged to still make their escrow payments for taxes and insurance to ensure that these amounts do not become delinquent and prevent large escrow shortages upon emerging from forbearance.

Are there any downsides to a forbearance?

Yes. Homeowners are only encouraged to claim a forbearance if absolutely necessary. While in forbearance a homeowner will be unable to refinance their mortgage. If at the end of a forbearance you are unable to catch up your payments you may be forced to enter a loan modification that could negatively impact your credit or prohibit you from residential financing in the future. Forbearance is only available once, therefore if you claim one now and then later need one you may find yourself ineligible.

Who should I contact if I want to get a forbearance?

You should contact your mortgage servicer and they will discuss options available to you and  the application process.

What does the 1st Fed rate cut since 2008 mean for mortgage rates?

Yesterday brought the first Federal Reserve (Fed) rate cut since 2008.  The Fed lowered the Fed Funds Rate by 0.25%, a move made in an effort to stimulate the economy and reduce the risk of a recession.  It would be great if this meant mortgage rates also dropped today by 0.25%, but it doesn’t work that way!  The Fed telegraphed this move back in June, and that’s when mortgage rates dropped sharply to their lowest levels in several years.  Today’s official announcement was anticlimactic from a mortgage rate perspective as the move was widely expected, and mortgage rates are unchanged this week.

The stock market didn’t take too kindly to the Fed’s post-announcement news conference as the Dow finished more than 300 points lower.  Investors were disappointed the Fed did not suggest that a second rate cut this fall was forthcoming, and if that belief continues the Dow may fall further and we may actually see mortgage rates increase slightly in the near term.  If you obtained a mortgage in the last two years it is very likely that currently available rates are much lower, so we definitely suggest you explore your refinancing options while mortgages rates are still low.

Financial News Friday

The US Government was out with an updated reading of the economy on Friday, reporting that expansion of the economy continued at a moderate pace, while wage growth slowed. Ten years into the expansion we are still waiting for wages to pick up at an accelerated pace.


Per the Bureau of Labor & Statistics for the month of November:

• Nonfarm Payrolls +155,000 (Forecast 200,000)
• Jobless Rate 3.7% (Forecast 3.7%)
• Avg Hourly Earnings All Private Workers +0.2% (Forecast +0.3%)

What does this mean for mortgage rates? Interest rates have been dropping in the last few weeks as the expectation is for slower economic growth into 2019. The updated numbers above show an economy still growing, but not accelerating into higher gear, enforcing the expectation for slower growth.

In other financial news this week stocks and bonds were whipsawed with developing reports from the US and China in regards to tariff and trade agreements.

Have a good weekend!

How To Prepare Your House For Winter

October may technically still be Fall, but it is the perfect month to start preparing your house for Winter.  Here are some helpful tips to get the ball rolling. You can knock them out in a weekend or tackle them 1 by 1 depending on the weather forecast in your area.

Furnace Inspection

• Stock up on furnace filters and change them monthly.
• If your home is heated by a hot-water radiator, bleed the valves by opening them slightly and when water appears, close them.
• Remove all flammable material from the area around your furnace.

Get The Fireplace Ready

• If the chimney hasn’t been cleaned for a while, call a chimney sweep to remove soot and creosote.

Check Foundations

• Seal up entry points to keep small animals from crawling under the house.
• Rake away all debris and edible vegetation from the foundation.

Check The Exterior, Doors & Windows

• Inspect exterior for cracks and exposed entry points around pipes, seal them.
• Use weather-stripping around doors to prevent cold air from entering the home and caulk windows.

Inspect Roof, Gutters & Downspouts

• Add extra insulation to the attic to prevent warm air from creeping to your roof and causing ice dams. 
• Replace worn roof shingles or tiles.
• Clean out the gutters and clear debris from the downspouts.

Service Weather-Specific Equipment

• Drain gas from the lawnmowers.
• Service or tune-up snow blowers.

Prevent Plumbing Freezes

• Locate your water main in the event you need to shut it off in an emergency.
• Drain all garden hoses, blow out sprinkler systems.
• Insulate exposed plumbing pipes.
• Drain air conditioner pipes and, if your AC has a water shut-off valve, turn it off.
• If you go on vacation, leave the heat on, set to at least 55 degrees.

Install Smoke & Carbon Monoxide Detectors

• Some cities require a smoke detector in every room.
• Install a carbon monoxide detector near your furnace and water heater.
• Test smoke and carbon monoxide detectors to make sure they work.

Winter. Spring. Summer.  Fall. No matter the season,  The Vertex Team is here to help with all of your mortgage needs. Feel free to call us today. 877-939-0339

5 Questions: Is A Cash-Out Refinance Right For You

They say in life that "Timing is everything".  

Knowing what to do in today's market environment can be confusing.  

 Home values have appreciated in most parts of the country and homeowners are sitting on over

 $6,000,000,000,000 in available home equity. The decision to tap into your home's equity is not

 one that should be taken casually and made without careful consideration.That being said, here

 are 5 situations when it may make sense to tap into your increased equity.

Do You Have High Interest Credit Card Debt?

 Interest rates on credit cards are typically much higher that mortgage rates, often by as much

 as 10% or higher. A cash-out refinance can allow you to pay off high interest-rate credit ard 

 debt and still save money every month. 

Are You Dreaming Of A New Kitchen Or Bathroom?

Reinvesting your home equity back into your house by making home upgrades is a win-win. 

Updating your kitchen, remodeling your bathroom or finishing your basement are all things that 

your family will get to enjoy while at the same time can make your house more valuable without

taking out a second mortgage.

Do You Have Enough Saved For A Rainy Day?

Uncertainty is a part of life. Taking some money out of your house and putting it in the bank

for a rainy day is something to consider. Too often, people find themselves out of a job and 

unable to access the cash in their home when they need it most. Taking steps while you are

employed and can qualify for  a new mortgage to set aside some of that equity for a rainy day

might be a smart move for you.

Do You Have A HELOC?

Pay off your existing home equity line of credit (HELOC) with a Cash-Out Refinance . As

interest rates climbs, so too do the rates on HELOCs, by consolidating with your first mortgage

today you fix the rate in for the life of the loan. No more worry about increases in the prime rate.

Are you living the life you want to live?

Is a lack of cash keeping you from finding your passion or purpose in life? Do you dream of 

continuing your education or starting a business? Maybe there's a bucket list family vacation 

you want to take.If you have a need for some cash and have access to equity due to improving 

home values, you can take that cash for any purpose, with a low fixed rate. 

No sales pressure, just an objective review.

If you answered yes to any of these questions and would like to learn more about your options, 

please Contact Us.  We're happy to answer any and all of your questions. 

Yellen stepping down, December rate hike possible

Federal Reserve chairwoman Janet Yellen will step down from the board early next year. Photo by Chip Somodevilla/Getty Images

 

With the end of her tenure as Fed chief coming in February 2018, Janet Yellen has announced she will leave the Federal Reserve board altogether. Her departure marks the end of an era in which unemployment has dropped to a near record low 4.1 percent and millions of jobs have been added in the post-Recession recovery years. She will be replaced by President Trump's new nominee Jerome Powell as chairman of the Fed board.

Meanwhile, Fed leaders indicated this week that another increase to the key central bank interest rate could be coming again in December this year. Board members will likely factor in the November job report, wage gains or losses, consumer spending and other variables before making a decision at their mid-December meeting to raise the benchmark interest rate.

A rate hike would not be a surprise for market investors, as multiple increases were expected throughout 2017. A potential rate hike has already been "priced in" to the markets, so no drastic changes to mortgage rates are anticipated - although nothing is ever certain. Despite 17 million jobs being added to the U.S. economy since 2009, inflation rates remain stubbornly below target, so that is one factor that could impact December rate changes.

Mortgage rates dip amid political uncertainty

Graph shows the rise and fall of mortgage interest rates over the past year.

Over the past two months, interest rates have been slipping downward following a sharp spike in rates after the U.S. election last fall. Some factors at play include the lessening likelihood of Congress passing any tax reform or deregulatory laws by the end of the year, as well as conflicts abroad involving Qatar.

The May jobs report released last week showed less impressive numbers, with a lower than expected 138,000 new jobs added. The number of jobs for March and April also were both adjusted lower than previously announced. Weaker employment numbers put downward pressure on interest rates - a positive for borrowers taking on new credit.

The Fed is holding another meeting next week but is still expected to raise the central interest rate regardless of lower job figures. Fed officials have stated that a couple more rate hikes are likely on the table in 2017, barring any drastic developments. Because the markets have been anticipating a rate hike, it will probably have minimal effect on mortgage interest rates.

Dodd-Frank to be repealed?

While former FBI director James Comey testified before the Senate on Thursday, the House passed a bill to remove much of financial regulation enacted in the Dodd-Frank act. Dodd-Frank was put in place after the economic collapse of 2008 to tighten lending standards and penalize financial institutions taking advantage of consumers with predatory schemes. Backers of the House's bill, called the Financial Choice Act, argue that lending standards have gotten too strict and are hampering growth.

The Financial Choice Act passed the House of Representatives largely on party lines but is not expected to make it through the Senate as proposed. Stay tuned to see what happens.