A couple weeks ago, I provided some information on how folks who needed to get a forbearance on their mortgages can do so. It included some links on what it is, too. I will once again remind folks I’m not a financial advisor or a loan officer, so I’m going by information provided to me that I am passing along to you. Today’s information has been provided to me by one of the top lenders in Illinois- nay, the entire country- Joel Schaub of Guaranteed Rate.
He hosted today’s virtual meeting with my office, and he gave us a wealth of information that has taken me a while to digest and present. One of the things I liked about his presentation, unlike what I’ve been seeing that’s been passed along by some other sources, is the minimization of fear-mongering. Now it’s true, we can’t have everybody who just doesn’t feel like paying their mortgage asking for a deal. Like it or not, our economy is already in hot water, and we just can’t currently handle it. But, if you need help, help is there, and I’m a big advocate on asking for a leg up when it’s needed.
So what’s the deal? This COVID-19 situation we’re all in has affected each of us uniquely. Joel said 63% of borrowers have asked/are going to need to ask for help, so you are not alone. Many of us are not working right now, the stimulus checks still haven’t gone out, unemployment is a mess, and I’m pretty sure Katniss Everdeen is blowing three-fingered kisses to everyone who lives on tips. (By the way, if you schedule for no-contact delivery for your meals and groceries, I implore you to add an appropriate tip to your purchase.)
Renters, I already posted an article about how important it is to get with your landlords and set up a plan. The 5th has come and gone, but if you haven’t paid your rent and haven’t made contact, there might still be time to salvage your relationship with your landlord. I absolutely do care about you, and I can relate to your difficulties. Up until three years ago, we were renters, too, and it wasn’t always by choice. It’s part of the reason why I continue to do so much volunteer work. I miss my Rotary Club, too.
So back to homeowner help:
Joel recommends visiting KnowYourOptions.com so you know how your loan is backed, and you have your info ready to go. Forbearance works for conventional, FHA, and VA loans. If you have private lending, things are more strict. You can also visit the Loan Lookup site, too.
When you get someone on the phone, which, go ahead and make yourself a sandwich, because it’s going to be a while to get through, refer back to my posting on how to ask for help. Joel said this is on the honor system, so however you bring in income to pay your mortgage, they can’t ask you. Each servicer is different in what they offer as far as help. It can be in the form of a loan modification, or that all the mortgage is due at the end of the period – maybe even just higher payments for the remainder of your term. You may or may not be able to ReFi. Ask questions, and like everything else, always read what you sign.
He did want to put out there too, that this is all virgin territory we’re treading here, so if you’re planning to stay put for a while, you’re in a better position down the road. But if you’re planning to move in the not too distant future, there’s a chance a forbearance can be something that comes up. That can result in a higher rate on a new mortgage. Now of course, you can apply for a refi on that mortgage, too.
Cool. So hey Lori: Can I get a ReFi now? You can apply for a refi, sure. You’d probably need folks coming into your home, like an appraiser. Are you okay with that? If so, maybe a refi is the way to go to help you out. Joel said he’s been getting those left and right, so it’s definitely a thing right now.
Okay Lori, but can I still buy a home? Hell yes you can, and rates are, as of today, still decent. However, there are some lenders and programs who are expecting higher credit scores than before, and of course they’re going to want to know your source of income is secure. So if you are deemed essential, or you’re working from home now, or you are of course paying cash, buying now might be the right decision for you.
Think of it this way: At least you can get a place that’s more comfortable to quarantine in. I really hate to say it, but I’m just being pragmatic here: It’s looking like we might be all sitting at home for both the spring and summer. Having things like an eat-in kitchen with a dishwasher, in-unit laundry, central air, and a yard, plus being allowed to have a pet or three, are that much more valuable when you’re sheltering in place. Oh, and yes, an extra room or two. And I will stress: Having a bigger kitchen for all the cooking that’s going down is a huge bonus.
Perfect example: We bought our home a few years ago, and some of our friends and family thought we were bougie for getting three bedrooms and two full baths. Well, we both have dedicated office space, and if one of us gets sick, they can take the master bedroom with the attached bath. It’s already been done before, in fact, and it worked out well. Now installing a doggie door to slide food into the bedroom might be overdoing it. Might.
One thing to consider is going with a fixer-upper. For many of us, we’ve got time now, and we’ve been adding onto to our projects, so why not take on the ultimate project? It would potentially save you money and allow you to transform a classic into something that meets your specific needs. There’s a program called a 203k renovation loan that helps you out with that, and it’s good for buyers as well as current homeowners.
The other thing to consider, and that may surprise you, is the method of house hunting itself. Virtual showings are becoming more commonplace, where you never set foot in the home until closing. And, it’s probably going to become the norm after we get the all-clear. Military folks are accustomed to this out of necessity, but civilians might not be used to it. I have two rental listings right now that are completely reliant on seeing by my pictures, video walk-thrus, and the details I provide. The rest are only pictures out of necessity. But where I can, I do.
Some sellers are allowing only one or two people in and who are pre-approved. Others are not letting anyone in except maybe their listing agent. The listing agent may do a work-around, such as virtual/video walk-thrus and lots of additional pictures like I mentioned, and even drone and 3D “dollhouse” views from companies who provide such tools like Matterport. (That’s a fancy service, so you’d more commonly see it on luxury homes and rentals.) Viewing homes these days all depend, and I’m feeling like it’s probably going to become the norm.
So here is where you’d need to have more questions answered, perhaps with the listing agent getting an approval from the seller to do something like a Facetime walk-thru so you can stop them on any specific areas you didn’t see covered. Having an agent to represent you, who knows the questions to ask, and who will negotiate for you and have your back, is vital.
There’s so much more information to cover, and the information coming along is getting updated, leaning more on helping rather than hindering. So hey! That’s a positive! We need that. However I can help, please reach out, even if it’s not real estate-related. Share my contact info along, too. If I can’t do it, I probably know someone who can.
Take care, and Be Well.
Lori Dake, an IL licensed broker
www.LoriDake.com <— Visit my site for lots of great info!
P: (773) 697-4474
F: (773) 717-5500
E: LDake@KaleRealty.com
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Kale Realty
2447 N. Ashland Ave., Chicago, IL 60614
www.KaleRealty.com
(312) 939-5253