Because of the current pandemic, many people are finding themselves financially impacted. Almost all industries are affected to some degree, including real estate. In this particular industry, landlords are experiencing losses. This is because tenants are backing out of rental contracts. Alternatively, some homeowners are unable to pay their monthly mortgage. For investors and homebuyers, home loans have been affected as well. If you plan to buy a home amidst this health crisis, you might face some challenges when applying for financing. However, this is not something that should hold you back from acquiring your dream property. As long as you’re prepared, you should be able to move forward as seamlessly as possible. Here’s what you need to know about getting a home loan during this time.
Longer Process
Applying for a mortgage may take longer than it previously would have before the pandemic, and there are a couple of reasons why. Lenders and banks are carefully assessing applicants to make sure they have the financial capacity to repay their loans. This assessment can take a few days to a few weeks to sort out. Application times vary based on demand and employee numbers. A reduced workforce at your bank will likely result in an increased processing time. You may want to check with your chosen lender to see if there are changes in processing times.
Lower Approval Rate
Banks, lenders, and other types of creditors are limiting the number of applications they’re approving for home loans. The more borrowers that apply for applications, the lower your chance is for approval. Understandably, during this time, businesses are minimizing the use of their resources to avoid significant losses. The same goes for lenders. Lenders have cut back on approvals in order to reduce default rates.
Virtual Application
One good thing about submitting loan applications amidst COVID-19 is that most everything has become virtual. Thankfully, this also extends to the application process. Prior to COVID-19, borrowers were required to physically visit banks and send their documents in person. Now states share the collective goal of minimizing human contact. Because of this, businesses are switching to virtual documents. This means that home loan applications are more convenient and can be completed and submitted from the comfort of your house.
Getting a Home Loan
If you’re ready to secure a home loan, contact us at The Mortgage Genie. We guide homebuyers through the mortgage process. Even in a pandemic, we will never stop working to help you own your dream home. Our loan specialists look forward to working with you. Contact us today at (925) 648-0981!