813.910.8020 Apply Now

Mortgage Broker Tampa, FL | Mortgage Lender Tampa Florida | Marimark Mortgage

  • Home
  • Homebuyers
  • Homeowners
  • Realtors
  • Investors
  • About Marimark
  • Contact Us
  • Mortgages
  • Apply Now
  • Current Mortgage Rates
  • Calculators
  • Testimonials
  • Blog
  • Videos
  • Featured In
Home / Blog / Headlines & News / What the Coronavirus May Mean for Your Home Loan and Mortgage Rates

What the Coronavirus May Mean for Your Home Loan and Mortgage Rates

March 7, 2020 By Admin

Value charts and graphs showing trendsThe 2020 coronavirus (COVID-19) pandemic has caused far-reaching impacts on the global economy. Governments everywhere are acting to minimize the long-term damage to their economies, with the United States Federal Reserve (the Fed) taking steps to protect American industries, including the real estate industry.

The Fed Response to Coronavirus

As social distancing and isolation measures are implemented across the U.S. in response to the Coronavirus outbreak, the Fed has acted to lessen the economic impact. It has done this through interest rate cuts and quantitative easing.

Lending Rate Cuts

The decision was made in early March to make emergency cuts to the Fed interest rates, starting with the first cut on March 3rd and the second on March 15th, bringing the rate down to 0.25%.

On the 15th, the Fed stated that the target is to stay in the 0% – 0.25% range. The result is that lenders can borrow money from the Fed at a much lower rate. Before the rate cuts in March, the interest rate was at 1.25% with early 2020 predictions expecting it to hold steady or potentially increase by the end of the year.

The emergency cuts made by the Fed are intended to increase the supply of money into the U.S. economy and to reduce the rates at which loans are offered by lenders. With many industries in the world economy taking enormous hits to their profits, the reduced price of borrowing is a measure to help businesses and individual consumers get the money they need to stay afloat.

Quantitative Easing

Along with rate cuts, the Fed made another announcement on the 23rd pledging to buy unlimited numbers of government bonds. This part of a quantitative easing strategy is meant to lessen the overall impact of uncertainty in the economy.

Another measure taken was the announcement that the Fed will also open a program to purchase corporate debt from secondary markets. This is in addition to the previously announced plan to purchase $200 billion of mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae.

Mortgage Rate Predictions

At present, many people are still taking out mortgages, especially if they are purchasing a home, which is a positive sign for the economy going forward. However, many homeowners who can wait to refinance are waiting for mortgage rates to go lower.

Today, mortgage rates are very volatile because of the uncertainty related to the coronavirus and thus the economy. Rates have swung wildly on multiple days, and we are not yet in a stable mortgage rate environment.

As things stabilize relating to the coronavirus and more certainty returns to the economy, mortgage rates should stabilize and track lower if the fed funds rate remains low.

After coronavirus fears pass and the economy is clearly on a positive path forward, the Fed will likely keep interest rates low to fuel the recovery. During this period, mortgage interest rates should remain low, providing an excellent opportunity for homeowners to refinance and for homebuyers to get a mortgage to purchase a home.

Mortgages to Purchase a Home

Many homebuyers continue to get a mortgage to purchase a home during the coronavirus, surprising many economists.

As the coronavirus is brought under control and the economy stabilizes, mortgage interest rates should decline giving homebuyers an even better buying opportunity.

Refinancing a Home Loan

As a result of the uncertainty related to the coronavirus, mortgage applications to refinance a home loan have dropped nationally, because mortgage rates have not fallen in line with the drop in the fed funds rate.

As the coronavirus is brought under control, and certainty returns to the economy, mortgage rates should stabilize downward, giving homeowners an excellent opportunity to refinance their mortgage.

Reduction of ARM Rates

Homeowners with an adjustable-rate mortgage are likely to see a reduction in their interest rate as certainty returns to the economy and the Fed keeps rates low.

Second Mortgages

Besides refinancing a mortgage, homeowners who are thinking about taking out a second mortgage on their home will likely have a good opportunity to apply for the mortgage in the near future as mortgage interest rates decline. And again, the timing will probably correspond with the stabilization of the economy, as uncertainty regarding the coronavirus dissipates.

What to Expect in the Future?

The Fed reacts to events that are expected to have a heavy impact on the U.S. economy, such as the worldwide coronavirus outbreak. Once the coronavirus outbreak is downgraded from an ongoing pandemic and the U.S. economy stabilizes, mortgage rates should stabilize and move downward.

As mortgage rates stabilize, homeowners will have an excellent opportunity to refinance, while homebuyers will have an even better opportunity to get a mortgage to purchase a home.

Marimark Mortgage

Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.

We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.

To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.

Opt In Image
Stay Informed, It's Your Money
Marimark Mortgage Newsletter

The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.

We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.

Real estate agents, and other professionals in the industry, will receive an ongoing wealth of information that will help them serve their clients.

Thank you for signing up!

Filed Under: Headlines & News

Opinions, estimates, forecasts and other views contained in this page do not necessarily represent the views of Marimark Mortgage or its management and should not be construed as an offer to provide financing at the rates or terms mentioned. Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval. Although Marimark Mortgage attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this page may be used with proper attribution.

Save with a Mortgage from Marimark

Whether you are buying a home or refinancing, you can save with a mortgage from Marimark Mortgage!

    Search

    Post Categories

    Testimonials

    Refinancing with Mary an absolute pleasure

     
    Refinancing with Mary has been an absolute pleasure. I have never been through the process before and she took the time to explain each step. She was prompt (had a rate locked in right away) and most importantly always answered the phone or emails almost immediately! The communication line alone made the refinancing process every bit worth it. Would recommend to anyone, and will be back for any future purchases! Bret Brennan, March 2021
    See More Reviews
    Marimark Mortgage LLC
    5327 Primrose Lake Circle
    Tampa, FL 33647-1328
    (813) 910-8020
    (866) 910-8020

    Accessibility
    Privacy Policy
    Terms of Service
    Sitemap

    Reviews

    Website Testimonials
    Google Reviews
    Zillow Reviews
    Trulia Reviews
    Facebook Reviews
    Yelp Reviews
    BBB A+ Rating

    FOLLOW US

    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    Marimark Mortgage is a BBB A+ Accredited Business

    Recent Posts

    • FHA Announced a 30-Basis Point Reduction to Annual Mortgage Insurance Premiums
    • How Can You Improve Your Credit Score?
    • Historical Mortgage Rates From The 1970s
    • What You Need to Know About Mortgage Forbearance
    • Top Tips to Save Money for a Down Payment

    © 2023 Marimark Mortgage, LLC All Rights Reserved. | Internet Marketing by Image Building Media. | RSS Feed

    Reviews / Recommendations: Google, Zillow, Trulia, LinkedIn, Facebook, Yelp, BBB

    Licensed in Florida by the Office of Financial Regulation, Mortgage Lender License #MLD77.
    Licensed in Virginia by the Virginia State Corporation Commission, License MC#4556.
    Licensed in Pennsylvania by the Department of Banking and Securities, License #40222.
    NMLS#248318 – www.nmlsconsumeraccess.org.