Refinance Now: New and existing Home mortgages set to jump Dec 1st!

Strategic Wealth

There’s been unprecedented demand for new mortgages and refinancing of homes in the United States despite the pandemic in 2020. The Fed’s actions have helped see mortgage rates on 30-year mortgages commonly fall below 3%.  About two weeks ago, Freddie Mac and Fannie Mae announced a new COVID fee of .5% would be added to all mortgages starting September 1st but that decision just got delayed until December 1st.To explain what this means for viewers, independent wealth management advisor Mike Reeves of Strategic Wealth Designers joined the evening newscast. Reeves says this isn’t an uncommon move by the lending giants even if it’s the first time buyers have heard of it.

“In 2008, we saw the same thing. The untold amount of costs incurred from this pandemic are far-reaching and will be paid for not just by us but our children and children’s children from a tax standpoint,” Reeves says. “Thankfully in the short term, they’ve delayed the pending charge until December 1st.”

For those who are in the market for a new home or to refinance the current home that is owned, do not delay getting the mortgage rate locked in and completed. Reeves says the extension does not truly buy a lender all the way to December 1st, it likely means they have an extra 3-4 weeks to get everything secured financially.

“If you’re house hunting and you are thinking to yourself right now, ‘great I’ve got another 3 months’, you are going to be sorely disappointed,” Reeves says. “Lenders are stacked with applications right now, trying to push through loans takes time and if you aren’t careful and you push up against the December 1st deadline to closely, that mortgage is going to be hit with the .5% fee. Remember it takes 30-45 days to get the loan process completed so don’t wait to get the process moving. It could save you 10’s of thousands of dollars over the course of the loan.”

The home market has largely been insulated from the economic crisis that has devasted so many industries in 2020. Buyers continue to rethink what they want in their home in a post COVID world.  Exodus from downtown city living, gives way to green grasses of the suburbs. Reeves is not ready to proclaim a bubble in the housing market but he does expect prices to level off as we move into the winter.

“We are coming to a point where some pressure is going to be put on home prices.  We have a large group of people who are struggling to make their payments each month who’ve lost their jobs. We’ve also seen most of the opportunists jump in and purchase a home – securing a low interest rate if they had the liquidity to do it, “ Reeves  says. “There will come a lull in the next 6 months where not as many people will be looking for a home and the interest rates could tick back up making the attractiveness of securing a home less appealing at the same time. We certainly aren’t going to see a collapse like 2008, but we could definitely see a pull back as we head into 2021.”

To learn more about financial news in the Indianapolis viewing area, visit If you have a financial planning question or would like to schedule a complimentary portfolio review with Mike, send an email to

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