ST. LOUIS, Mo. – The economic fallout from COVID-19 presents an intriguing opportunity for homeowners looking to refinance mortgages. Historically low-interest rates have driven refinance applications three to four times higher than lenders saw last year at this time. This has also created questions about the safety of in-home appraisals during this time of social distancing.
“Someone who was top of the line for qualifications was getting interest rates on a 30-year fixed mortgage in the upper twos,” said Henry Levison, Executive Vice President at St. Louis based Delmar Financial Company.
The historically low interest rates Levison describes brought a surge of people seeking to refinance their mortgages.
“The industry can only handle so much. Typically, a refinance, start to finish, takes less than 30 days. Right now, it’s about double that,” added Levison.
Closing on a refinanced mortgage may require a home appraisal. Levison says most appraisals right now can be performed without an in-home visit due to relaxed Federal Housing Finance Agency guidelines. He says that does not apply to cash-out refinances, people, purchasing or refinancing an investment property or in some cases, a second home. In those instances, he says an appraiser will call the client to ask about their travel history, health status and more to help bring comfort to both parties.
“They will ask that they limit who is in the house if possible. They will also ask the client to turn on all the lights, open all the doors just to limit the amount of touching the appraiser must do once inside the house,” said Levison.
He says appraisers are wearing masks, gloves, keeping a safe distance from clients, and spending as little time inside homes as possible.
If you’re refinancing right now, Levison recommends checking with your bank to see how the new guidelines might change the appraisal process.