At Benchmark, we want to acknowledge that concern and response to COVID-19 is world-wide. Operations changes and adjustments extend across many diverse industries. When you choose Benchmark, you are family. Our branch offices across the country are ready to assist you in all of your home financing needs, and to help you decide if a new mortgage makes sense for your unique situation.
Federal Reserve Acts
To cut rates to 0-0.25%.
This rate cut means that new money is readily accessible, and relatively inexpensive. This move helps communities pay for resources as the COVID-19 event continues to unfold. Some publications are announcing that the Federal Reserve cut interest rates to 0%, which is a round estimate. This does not mean mortgage interest rates are 0%. Federal Reserve interest rates are not referring to private loans (like mortgages).
To buy treasury bonds and mortgage backed securities.
The Federal Reserve’s commitment to buy treasury bonds and mortgage backed securities bolsters market demand for both, an effort to help keep bond rates favorable and, by extension, fixed incomes from falling too far, and to help encourage sustained favorable interest rates for home buyers.
How this affects mortgage rates
The move by the Federal Reserve to buy MBS’s could help keep mortgage interest rates at favorable levels. Meanwhile, the community push for social distancing could result in a decrease of the asking price for homes on the market. This is potentially true especially in heavily affected areas, as competition for homes could probably be from those who need a home, and excluding those looking to trade up. This is potentially good news for those who may be looking to buy their first home, or next home, soon.
Existing refinance boom and your new mortgage
As of now, all rate locks are good for 60 days, for your protection. With the refi boom, appraisals are taking longer, on average. The longer rate lock ensures that anything that could push back your closing date won’t affect your locked-in interest rate (for up to 60 days). As recent mortgage rates have attracted many to refinance, many mortgage companies find themselves extremely busy, and Benchmark is no exception. Like many others, most of our corporate team members are working from home to help prevent the spread of COVID-19. We are well-equipped to operate in this manner, and we are committed to providing our famous excellent service to you, our treasured clients. When you choose Benchmark, you are family.
Benchmark brings you home.