The federal government just sliced mortgage rates yet again (to almost 0%), adding to the 50-year low that we’ve been seeing in 2020. The consensus is, the rate cuts are good news for both first-time homebuyers and people looking to refinance. So what to consider before doing so? Here are some key takeaways for our customers.
- Your credit score is still a factor. Low credit or bad debt can still have serious implications for your projected monthly payments. You may also need to pay for mortgage points to get a lower interest rates in the event of bad credit.
- Two federal bank regulators — the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. (OCC and FDIC, respectively) have advised that banks quell efforts to foreclose on home loans. This is positive for first time homeowners and repeat borrowers alike, but foreclosure should never be the goal – only borrow what you can afford to pay.
- Know that credit lines may increase as creditors do their part to stimulate the economy, and try to avoid the temptation to increase debt correspondingly. A short term loan can be a manageable way to cap spending at one, pre-determined amount.
- Keeping perspective during these strange times. When you’re spending during a state of emergency, you should aim to apply the same rules you follow during more normal times. This includes sticking to your personal budget. Overspending now can increase financial stress later.
- With the possibility of recession, it’s important to continue working to reduce outstanding obligations. Consolidating smaller debts or paying off previous debts by taking a modest, repayable loan with BMG Money is an excellent option for getting back on track financially. Our loans are repaid in allotments via your existing employer, and can be used to get a handle on your debt if you’re paying multiple creditors.
Remember, BMG Money offers a wealth of financial resources on our website to assist our customers in making sound financial decisions – even during a pandemic. We look forward to continuing to serve you.