Mortgage Timeline During The COVID-19 Pandemic For CTC And Closing
This article on the Mortgage Timeline During The COVID-19 Pandemic For CTC And Closing
With the COVID-19 coronavirus outbreak, the time it takes to close a mortgage loan has changed.
- Throughout the mortgage industry, the majority of lenders are at capacity when it comes to the new loan origination
- This is a good sign for the mortgage sector but can be an obstacle for a potential home buyer
- In this blog, we will detail the new waiting expectations throughout the mortgage process
- We will go over the timeline from the start of the application to closing and the reasons for the delay
In this article, we will discuss and cover the Mortgage Timeline During The COVID-19 Pandemic For CTC And Closing.
Changes With The Mortgage Timeline During The COVID-19 Pandemic
Wow, there are numerous factors that affect the mortgage loan timeline even before COVID-19. There is now a long delay in the mortgage process due to the pandemic.
Below we will detail a few key areas that are slowing down the mortgage process:
- Underwriting turn times are the largest factor for slowing down the mortgage process due to the COVID-19 coronavirus outbreak
- Early in the pandemic, we saw a dramatic drop in interest rates across the board
- This created a mini refinance bubble making underwriters extremely busy
- Since then, we have not seen a slow down in refinance transactions and have seen an increase in certain purchase markets across the nation
- Home values throughout the nation have dropped slightly and interest rates are incredibly low, this is causing an extreme demand for mortgage lending
Many buyers are still able to work during these times. You mix lower values with low rates and you get extra demand.
Mortgage Timeline During The COVID-19 Pandemic Is Dependent On The Home Appraisal
The appraisal process.
- The appraisal process is taking longer than normal for a few factors
- Early on, many appraisers were not working because they were not comfortable entering a stranger’s home to complete an appraisal report
- There are drive-by appraisals available during the pandemic
- However, drive-by appraisals have a tendency to affect the value of a property
- Please see our APPRAISAL DURING COVID-19 blog for more specific information on the appraisal process
- Since the pandemic has slowed down, more and more appraisers are willing to complete appraisal orders
- We have seen appraisals be slowed down again throughout major cities in our country
- For instance, we recently had an appraisal in Chicago that was unable to be completed due to protests and unrest in the community
- There were buildings looted and destroyed within the area of the condo
- The appraiser was not comfortable going through the crowd to complete their job
- It’s been about a week, in that order is still on hold
- That slows down the refinance process quite a bit
- Had this been a purchase transaction, there would need to be an extension of the sales contract
Appraisals are just one more bottleneck in the delay in the mortgage process.
Mortgage Timeline During The COVID-19 Pandemic: Working From Home
Working from home.
- We all know that most companies are allowing as many employees as they can to work from home during this pandemic
- Even huge corporations are allowing their teams to work from home
- The same is true for the mortgage industry
- While there have always been teams of remote underwriters, now the entire operation staff is working from home
- This creates a lag in turn times because of the spread-out nature of documentation
- The processor is no longer able to walk down to an underwriter‘s office and have a face-to-face communication on a file
- They now must communicate through email or schedule a call, slowing down the process
Not to mention the distractions that come along with working from home. A transition that not every employee was prepared for.
Procedure Changes By Title Companies
Title company procedures.
- Even during these unprecedented times, title companies must notarize and record mortgage closing documents with every county
- The title companies have changed their process and allowed drive through closings
- With social distancing rules in effect, fewer individuals can be inside a title company at one time
- This has created fewer time slots available for mortgage closings
- Some states have eased the restrictions while others have kept them in place
Just like every other aspect of the mortgage industry, the title companies have adopted new policies to keep everybody safe.
Mortgage Timeline During The COVID-19 Pandemic Is Longer Due To Volume Of Loan Applications
The sheer volume of mortgage applications nationwide has created a slowdown in the mortgage process.
- Many lenders are now taking 45 to 60 days to close a mortgage transaction
- Depending on the severity of your file, it is more important than ever to be upfront and honest with your loan officer during the application process
- Hiding any pieces of information will only come up during the underwriting process and slow down your turn time is even further
- In these strange times, underwriting requirements have tightened up
- You and your loan officer are on the same team
- Honesty will only speed up the process
We hope this article does not stop you from buying a home. This is still an amazing time to buy. Due to the COVID-19 coronavirus outbreak, we have seen a slight decrease in property values nationwide. Then you throw on record low-interest rates, it is a great time to get home if you are in the market.
Qualifying For A Mortgage With A Lender With No Overlays
We want to remind our readers at 75% of our clients have been turned down for a mortgage pre-approval in the past. Gustan Cho Associates do not have LENDER OVERLAYS on our mortgage products which allows us to help more individuals than most banks. Even if you have been turned down in the past, please give Mike Gracz a call on 630-659-7644 or send an email to [email protected] for more information. We are here to help seven days a week!