Watching Your Wallet: The rush to refinance during COVID-19

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(WILX) -- With rates at record lows, thousands of people are looking to lower their mortgage payments. Some are looking to free up cash while others are just looking to get lower rates.

Chad Duncan and his wife Jennie are professional bloggers and when they're not uploading the latest recipe, they are preparing to close on a new home for their family.

"We are super excited. We found the house, like I said, back in late December/early January. We have three sons, so we wanted to have a house with four bedrooms on the same level," Duncan said.

They started the process in the fall and were ready to buy but waited on the advice of their realtor as the market started to dive because of the pandemic.

"When we first pulled our credit and did the application, I think in January the interest rates were like 3.65% and when we talked to the bank last week, I think on Thursday we locked in at 3.25%," Duncan said.

That's about a savings of $200 a month, $72,000 over the life of their 30-year mortgage.

"My interest rate on the home I'm buying is lower than the interest rate on the one I'm currently living in," Duncan said.

Duncan isn't alone in the rush to lock in rates, our partners at the financial website NerdWallet found the number one and two searches in March on Google were "mortgage refinance" and "mortgage relief."

Jeff Coward studies mortgage trends for the Virginia Credit Union. In recent months, his organization has seen a lot of members looking to refinance mortgages.

"Whether it's to lower their rate and extend out their term, lower their term. In some cases, they're taking equity out of their home to use it for debt consolidation, home improvements, or any other various reasons why," Coward said.

He said after the Federal Reserve Emergency rate cut in March, he immediately saw a spike in refinance questions and it's not just to lower a mortgage rate.

"We are seeing members who are taking advantage of this to lower their debt service through consolidating higher payment credit card debt or auto debt or whatever, then putting it into a lower-rate, fixed-rate mortgage," Coward said.

Which means you are basically turning all your debt in one payment. If this is an option you are considering, also know the Duncans and their realtor say banks are busy right now so be prepared for a bit of a longer process.

"There are so many people going out and getting refinances because the rates are so low, that banks are getting backed up and backlogged with doing appraisals and loan applications," Duncan said.