We hope you and your family are staying safe. Here at Morty, we wanted to share what the recent COVID-19 outbreak — and its impact on our global economy — means for the mortgage marketplace and your home buying journey. Mortgage rates change every day, but the fluctuations that have happened over the past month are unprecedented. Below we answer some of the most top-of-mind questions homebuyers have been asking us.
How may state closures affect my mortgage?
Non-essential businesses are closing in many states, which may affect your closing timeline. We recommend that homebuyers in contract to purchase a home start working towards final lender approval as soon as possible. This is a new situation for everyone, but we are working closely with our lenders and closing partners to lock and close your loan as efficiently as possible. Part of our mission has always been to give our homebuyers personalized service through closing, and that’s particularly true now.
Key process elements that have been impacted include:
- Lenders: Some lenders have temporarily stopped taking loan applications and locks in highly affected areas. In these situations, Morty can move your deal to another lender in our marketplace. This provides more certainty that your deal will proceed on schedule.
- Appraisals: Local closures might prevent an appraiser from inspecting your property in person. As a result, most of our lenders are temporarily allowing appraisals to be conducted remotely in impacted areas. In most cases, this will not impact your ability to close.
- Closing Conditions: Due to the unfortunate increase in unemployment, some of our lenders may require updated paystubs or bank statements shortly before close. If requested, please upload these documents promptly to avoid any delays. On a related note, we will coordinate with you to determine the best contact for verifying your employment. This is usually done over the phone but can also be completed via email as we know many people are not in the office right now.
- Closing Table Notaries: Closing on a mortgage transaction requires at least two documents to be signed and notarized at the closing table. This could cause closing delays in states that are on lockdown and do not allow for remote notarization of documents.
- Title Insurance: Certain title companies are not equipped to operate in counties where the local recording office is closed. In affected areas, we are proactively contacting each title provider to identify and address potential issues. If you have not chosen a title company— or the one you have is experiencing challenges — we’ll work with you to find and choose a title partner that can work around current limitations.
Will rates go lower?
Mortgage rates dropped to a 50-year low earlier this month, before climbing back up last week and then decreasing this week. Over this period, rates on 30-year fixed options have fluctuated between a low of 2.875% and a high of 4.5%. Currently, rates are near historic lows and economists expect that rates will continue to fluctuate over the next few weeks.
Should I wait to lock in my rate?
We recommend that you decide whether or not to lock based on where you are in the home buying process.
If you’re in contract on a home, we recommend starting the approval process as soon as possible in order to avoid any closing delays. Once approved, you’ll have the option of locking or floating your rate. Floating your rate is when we register your loan, provide relevant disclosures and begin the underwriting process before locking your rate; once rates move to a predetermined level that works for you, your mortgage advisor will automatically lock it for you. If you’re interested in floating, please let your mortgage advisor know.
Alternatively, if you are not yet in contract on a home, we recommend getting started on the approval process with Morty. This will allow you to keep an eye on things over the next few weeks, compare rates across our lender partners, and be fully prepared to quickly lock in a rate when the time is right.
We remain committed to working with you during these uncertain times and will provide as much guidance as possible to help you make informed decisions. If you have any questions, do not hesitate to schedule time with one of our licensed mortgage advisors.