Mortgage Pre-Approval During The COVID-19 Pandemic Crisis

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BREAKING NEWS: Mortgage Pre-Approval During The COVID-19 Pandemic Crisis

Obstacles And Changes On Mortgage Pre-Approval During The COVID-19 Pandemic Crisis:

  • If you have been following Gustan Cho Associates, you know the mortgage industry is rapidly changing due to the COVID-19 coronavirus outbreak
  • With over 40 million Americans out of work, it has become tougher than ever to get pre-approved for a mortgage loan
  • While most lenders have raised their minimum credit score requirements, we are happy to inform our readers that we have not
  • We still offer mortgage lending without LENDER OVERLAYS in most states
  • In this blog, we will detail the pre-approval process during these unprecedented times and a few key items that have changed

In this article, we will discuss and cover Mortgage Pre-Approval During The COVID-19 Pandemic Crisis.

Stress With Mortgage Pre-Approval During The COVID-19 Pandemic Crisis

Getting pre-approved for a mortgage can be the most stressful part of the mortgage process.

  • There are many issues that can arise during the beginning phase of the process
  • During this stage, you do some of the most work, gathering documents, and completing the application
  • Depending on your credit score, credit history, and down payment requirement, your pre-approval can be a smooth process
  • However, if you do have credit challenges from the past, this process may be a bit more complicated
  • If you are in the early stages of buying a home, we encourage you to call Gustan Cho Associates
  • We offer all our loan programs without additional lender overlays
  • This allows us to help more clients than most lenders

Even if you have been turned down in the past, this may be a good time to start the homebuying process again.

Loan Process On Mortgage Pre-Approval During The COVID-19 Pandemic

A quick rundown on the pre-approval process:

  • The first step is to call Mike Gracz on 630-659-7644 or send an email to mgracz@gustancho.com
  • After you provide your contact information, you and Mike will have a brief one on one conversation about your mortgage needs and qualifications
  • After going over your goals, Mike will pair you with a licensed loan officer in your state
  • Your assigned loan officer will send you an application link

After completing the application link out, you will need to send in the following documentation:

  • Last 60 Days Bank Statements – to source money for escrows
  • Last 30 Days Pay Stubs
  • Last Two Years W2’S
  • Last Two Years Tax Returns
  • Driver’s License  

Qualification Process Prior To Mortgage Pre-Approval During The COVID-19 Pandemic Crisis

Once your loan officer receives your application and your documentation, they will then verify your credit report.

  • Depending on what items are on the credit report will determine what you are preapproved for
  • Your loan officer will work backward based on your qualifying income and debts reported
  • The loan officer but then run your file through an automated underwriting system depending on the loan program requested
  • This automated underwriting system or AUS will provide the lender with more information
  • This will determine whether you are eligible for automated approval or must be downgraded to a manual underwrite

Either way, we are the experts in manually underwriting mortgage loans. Please see our AUS BLOG for more information.

Economic Impact Affecting Mortgage Markets

Things to look out for due to the COVID-19 coronavirus outbreak

  • This outbreak has affected almost every industry worldwide in the United States mortgage market has also taken a massive hit
  • With unemployment high, the economy in shambles, and the current status of the American people, has caused interest rates to drop to nearly all-time lows
  • One thing you want to avoid is making sure you are able to close your loan during your rate lock period requested
  • If you request a 30-day lock, but your loan takes 45 days to close, you will need to pay a 15-day rate lock extension
  • It is important to lock your rate only when you know you will close within the timeframe of the rate lock agreement
  • Underwriting turn times are slow right now
  • This is due to the increased value for mortgage applications and the fact that many operation staff is still working from home nationwide

Make sure you are talking about these items with your loan officer.

Shopping For Homes Via Virtual Home Tours

Virtual home tours:

  • Virtual tours have been more common due to the COVID-19 coronavirus outbreak
  • This outbreak has caused mass hysteria through the real estate community
  • Many realtors are apprehensive to have showings and open houses are not allowed in most states
  • It is common to start with a virtual tour and narrow your search down
  • I do not recommend buying a house based on a virtual tour alone because it is easy to enhance photos to hide blemishes throughout the property
  • Realtors now more than ever need a strong pre-approval letter before they will show you a property
  • Many agents will follow up with the lender on your pre-approval letter before scheduling a showing with you

They want to make sure that the borrower is truly pre-approved and there will not be any issues during the transaction.

Verification Of Employment During The COVID-19 Pandemic Mortgage Process

VERIFICATION OF EMPLOYMENT.

  • A lender must verify the previous two years of your employment before issuing an approval
  • This has been an issue for many borrowers since the COVID-19 outbreak hits
  • Many companies and institutions are currently closed or working remotely
  • This can make it a nightmare to track down the necessary information
  • If you are starting the home buying process, please send your lender information for your human resources or payroll department
  • Having exact contact information will speed up the process

We cannot close your mortgage transaction without an executed verification of employment.

Qualifying For A Mortgage With No Lender Overlays During The COVID-19 Pandemic

Besides a few tweaks here and there, the pre-approval process is not much different than before this outbreak hit. Just like every aspect of our life, we are learning to adjust. The home buying process will go back to normal in the future. But for now, we have a few hurdles that we must jump over together. For more information or to get pre-approved, please call Mike Gracz on 630-659-7644. You may also email your scenario to mgracz@gustancho.com. Over 75% of our clients have been turned down by their current lender. We are here to help. Even if you do not qualify for a mortgage loan today, we will point you in the right direction to achieve a pre-approval letter as soon as possible. We look forward to hearing from you.

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