Homebuying And Mortgage Process During Coronavirus Pandemic

BREAKING NEWS: Homebuying And Mortgage Process During Coronavirus Pandemic

The Homebuying And Mortgage Process during the coronavirus pandemic is more difficult than it was used to be.

Homebuying And Mortgage Process
Gustan Cho Associates
  • The coronavirus pandemic has turned the mortgage market upside down
  • Although mortgage rates hit an all-time historic low, borrowers with under 680 credit scores are encountering hurdles when qualifying for a mortgage
  • Most lenders imposed overlays on credit scores by increasing minimum credit score requirements
  • For example, many lenders who had minimum credit score requirements of 580 FICO on FHA loans have increased it to 660 to 680 FICO
  • Lenders also raised loan level pricing adjustments (LLPA) on borrowers with under 680 credit scores
  • Mortgage rates are higher for borrowers with under 680 credit scores
  • The reason lenders have increased credit scores and imposed overlays is due to liquidity issues on the secondary market

In this breaking news, we will discuss and cover the Homebuying And Mortgage Process During Coronavirus Pandemic.

Challenges In The Homebuying And Mortgage Process During The Coronavirus Pandemic

The Home Buying And Mortgage Process During COVID-19 Pandemic is possible. The mortgage business is considered an essential business. All essential businesses are allowed to remain open during the pandemic crisis. Michael Gracz of Gustan Cho Associates has been having record weeks during the pandemic closing loans. Mike Gracz said the following:
While the world continues to navigate the challenges presented by COVID-19, the health and safety of our clients and team members is our top priority. We are working remotely to ensure that every client receives an exceptional mortgage experience from start to finish. If you were planning to purchase a home this year or if you are in the process of buying a home during COVID-19, here are a few things to keep in mind as you continue to make your way to the closing table. Many lenders have changed lending guidelines during the coronavirus pandemic.
Credit Score Requirement Changes By Lenders
What are the changes in the creditworthiness requirement according to lenders
The coronavirus pandemic has turned the mortgage world upside down.
  • Lenders imposed higher credit score requirements on government loans
  • Lenders also jacked up mortgage rates for borrowers with under 680 credit scores
  • Almost all borrowers with under 680 credit scores are now being charged discount points
  • For higher credit score borrowers, mortgage rates and terms are still great
  • However, many lenders have stopped doing loans for borrowers with under 640 credit scores
Gustan Cho Associates Mortgage Group is one of the few lenders that are still doing FHA and VA loans under 620 FICO and down to 500 credit scores.

Homebuying And Mortgage Process On Unique Loan Programs

Homebuying And Mortgage Process on Non-QM loans have been halted.

  • Non-QM lenders have halted all non-QM loans until further notice
  • Many non-QM lenders have gone out of business
  • One of the most popular loan programs at Gustan Cho Associates was the self-employed bank statement program with no income tax required
  • Gustan Cho Associates expects the resurgence of non-QM mortgages in the coming weeks
  • Many lenders stopped doing manual underwriting on FHA and VA loans until further notice
  • Others suspended doing FHA 203k loans
  • Most lenders have also suspended Jumbo loans during the coronavirus economic crisis until further notice
  • Specialty loan programs such as the down payment assistance loan programs and one-time construction loans have been halted until the mortgage markets stabilize
Massimo Ressa of Gustan Cho Associates said the following:
Due to the impact of COVID-19, some niche loan products may have limited availability. However, there are a wide variety of mortgage loan products to select for your purchase. It’s the perfect time to evaluate your home financing plan with a licensed loan officer before you begin your home search. Once you find the right home, you’ll want to move fast, and it will be extremely beneficial to know which loan type you will be applying for far in advance of making an offer. Excellent rates are still available for qualified buyers. Our dedicated team keeps a watchful eye on the status of mortgage rates, and they can best advise when the timing is just right to lock in the lowest rate available for your home purchase. In a seller’s market, it’s essential to work closely with your real estate agent to negotiate the maximum, allowable closing costs assistance for your loan type from the seller (even if that means working it into the purchase price of the home).

The Housing Market And Home Showings During The Coronavirus Economic Crisis

What is the housing market and house shows during the coronavirus economic crisis?

The once 2020 strong housing market has been put on hold by many homebuyers. Many homebuyers with executed real estate purchase contracts canceled until the economy are back in order. Many fear of losing their jobs and decided to put a home purchase on hold. However, for those homebuyers needing to purchase a home during the coronavirus pandemic, it is still possible to tour homes. Realtors are offering video conferencing options to abide by the social distancing recommendations by experts. Many buyers and sellers utilize the virtual home tours.

Piotr Bieda, a contributing associate editor for Gustan Cho Associates and Illinois licensed real estate agent said the following:

The National Association of REALTORS® shared best practices for agents to follow if an in-person showing takes place. The tips mentioned include: No more than ten people should be touring a home at one time. All guests should remain at least six feet apart during the showing. Require buyers to wash their hands or use hand sanitizer upon entering or leaving the home. Require guests to remove their shoes or cover their footwear with booties. Leave all lights on and cabinets/internal doors open to prevent contact with frequently touched surfaces. Encourage clients to disinfect their homes after a tour – particularly doorknobs, countertops, and faucet handles

Avoid Physical Contact As Much As Possible

Mortgage and real estate professionals have implemented having the least contact among people during the home buying process. Title companies have implements e-signing, e-closing, and mobile notary services for home closings. Lenders do not have to have contact with borrowers. Everything is electronic. Docs are sent to the title companies. Funds are wired. The social distancing guidelines are implemented and in full force during the homebuying and mortgage process. For more information about this topic and/or other mortgage-related topics, please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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