Our daily lives have been drastically transformed by the necessity of social distancing—from contactless pizza delivery to virtual family gatherings—but AAFMAA Mortgage services LLC (AMS) remains here for you, especially if you’re looking to ease financial pressures by refinancing during this unpredictable time.
Stacey Daniels, Vice President of Operations at AMS, has pulled together the five most important things you should know about refinancing your home during this time. Read on for her insight to help you determine whether now is the right time for you to do it.
1. Now is as good a time as any to refinance.
Interest rates are near historic lows. If you refinance your 4%+ VA Loan right now, you could save money each month. Plus, the VA offers an Interest Rate Reduction Refinance Loan (IRRRL, pronounced “Earl”). IRRRL is a streamlined refinance product that does not require an appraisal and minimal underwriting. There is no income information needed and no income or asset documentation required, which could be especially helpful now if your household is facing employment insecurity. Another refinance option, is the VA Cash Out Refinance – this option requires more paperwork than the IRRRL, however you could get a cash-out refinance up to 100% of your home’s appraised value.
Just note that, with the current nationwide shutdown, there could be delays in the verification process as many lenders are working remotely and make have reduced hours. Although COVID-19 restrictions have not reduced our service or operations, most AMS staff members are working from home and only interacting with Members online and by phone. Our IRRRL refinances are still closing in 30 days or less.
2. Your credit score should not be affected by a refinance.
Several factors impact your credit score, such as payment history, credit mix, and credit utilization. While your credit may have played a role when securing your mortgage, it should not be a problem when refinancing. Just be mindful of how many lenders are pulling your credit, as that may become a red flag for other lenders.
3. You can close your loan in person and still stay safe.
Many AMS Members have been questioning if they’d actually be able to close on a loan, since most signings happen in person. Depending on guidance from your state and local government, you may be able to schedule a closing in your home. We’ve heard anecdotes of open-air signings happening at disinfected tables in backyards or garages. No matter how you do it, it’s important to maintain social distancing, wear face protection, and wash your hands afterward, if you opt for an at-home signing.
4. Completely virtual closings can’t be offered… yet.
Right now, there are some documents required to refinance your loan that you can complete with electronic signatures, but not the Note and Deed— those still need a physical signature. However, we are getting closer to the reality of completely virtual closings! The Government National Mortgage Association, more commonly known as Ginnie Mae — a U.S. government-owned company that guarantees investors’ purchases of securities based on government-backed loans, such as VA and USDA loans — is in the process of approving the use of remote online notaries for signings. We hope to offer this option in the very near future.
5. You can begin the refinancing process online
You can take the first steps toward refinancing by checking our current interest rates online. Then, use the AMS Mortgage Rate Comparison Calculator to see how different interest rates would impact your monthly mortgage payments. This can help you determine if now is the right time for you to refinance. If you have any questions along the way, contact one of our Military Mortgage Advisors. They can help review your options.
AMS Is Here to Help
As COVID-19 continues to affect our country, AAFMAA recognizes the significant challenges facing our military community and the need, more than ever, to support your family’s financial security. AAFMAA continues to provide solutions for YOUR financial future in this time of uncertainty — just as we have for over 141 years. Learn more about how AAFMAA is serving you during this challenging time at aafmaa.com/covid19.