COVID-19: Federal Rates, Mortgage Rates, and your Insurance
During the first week of March, the Federal Reserve had started to cut federal fund rates to help ease the economic slowdown due to the coronavirus outbreak. In their press release statement, they said, “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries including the United States.” Less than two weeks from the first cut, the Federal Reserve took a second emergency action on March 15, 2020 when the committee lowered the target range for federal funds rate to 0-.25 percent. The rates will stay in this target range until the Federal Reserve is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.
Interest rates were already around historic lows prior to the COVID-19 pandemic and homeowners are rushing to refinance their mortgage rates in hopes of lowering their mortgage payments. The high demand in refinancing has taken a huge toll on mortgage lenders, brokers and bankers. Lawrence Yun, chief economist at the National Association of Realtors was quoted on Politico, “Lenders are struggling to keep up with the paperwork of refinancing so many mortgages at once.” The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for February 2020 shows mortgage applications for new home purchases have increased 25.9 percent compared to a year ago. The MBA also forecasted that refinance originations are expected to double earlier MBA projections, jumping 36.7 percent to around $1.23 trillion. MarketWatchhad also advise people that those looking to buy a home or refinance their existing mortgage who have not applied yet need not despair, since economists expect that rates will remain low, and possibly go down again, for the foreseeable future.
Refinancing or buying a home can be a great advantage for many people right now since rates are so low. When refinancing your mortgage, it is also important to review your home insurance policy. Do you have enough insurance to rebuild your home in the event of a total loss? Selecting the right deductible and having enough liability coverage are also among a few of the things that should be reviewed on a homeowner’s policy. For first time homebuyers, finding the best insurance coverage can be stressful and overwhelming. One of the advantages of having an independent agent is the ability to offer clients a wide range of products from multiple insurance carriers. Independent agents can offer guidance and recommendations unique to each customer on a variety of products, coverages, and prices because they are working on behalf of the customer and not the insurance company. In addition, not everyone is an expert and first-time homebuyers are not expected to know how much insurance they need or how much coverage they should have. One of the worst things that can happen is to not have enough coverage or having deductibles too high for you to afford.
Contact us today at 920-347-9115 and get the peace of mind that you need knowing that your family and home are taken care of.
Stay safe and be well from Paroubek Insurance!