The Reason We Are Seeing Delays In The Mortgage Process
This Article Is About The Reason We Are Seeing Delays In The Mortgage Process
2020 has been a crazy year for the world.
- The United States has gone through many changes in a short amount of time
- As we try to adjust to the COVID-19 coronavirus outbreak, we are seeing changes in every industry throughout our nation
- The mortgage industry is no exception
- If you have gone to the mortgage process during the COVID-19 coronavirus outbreak, you more than likely experienced some delays
- In this blog, we will detail what do you expect during the mortgage process during a pandemic
- We will discuss where the delays are and what you can do to minimize missing chances of your closing date
The Reason We Are Seeing Delays In The Mortgage Process: Coronavirus Outbreak
As we all do our best to adjust to the new State regulations regarding the real estate industry, it is important to stay optimistic.
- The COVID-19 coronavirus outbreak has changed the way a borrower can see a potential property
- Throughout the nation, each state has specific guidelines on how house showings can happen
- Thousands of Americans are now utilizing virtual house tours to minimize in-person contact when shopping for a home
- In most states, open houses are still not allowed
- We hope to see this change in the near future
- Virtual tours are great however it is very easy to cover up damage in a house
- Once you find a home you would like to buy, the process is still different than before the COVID-19 coronavirus outbreak
- We are seeing delays in all aspects of the mortgage process
- Interest rates are historically low, and thousands of people are moving across the nation
- Whether you’re trying to leave a big city or be closer to your family, we are seeing an uptick in mortgage applications across the nation
It is a great time to buy or refinance your property because of the low-interest rate mortgage market.
Mortgage Delays Due To Third-Party Vendors That Are Beyond The Lender’s Control
What is a third-party delay?
- There are numerous third-party verifications and services that go into the mortgage process
- Everything from obtaining a credit report, an appraisal, sometimes a pest inspection, and even closing at the title company are all third-party items
There can be delays due to high consumer demand for all third-party services.
The Reason We Are Seeing Delays In The Mortgage Process: Turnaround Time Of Home Appraisal
Appraisal turn times have been extremely delayed. This is because of the volume of appraisals being completed.
- There are many current sales which an appraiser must use for comparable homes, causing extra work for the appraiser
- It is a great time to be an appraiser because the jobs are coming in one after another
- Most refinance transactions require an appraisal, creating a backup to receive your appraisal report
- As part of the underwriting process, the appraisal must be reviewed by a collateral underwriter
Common sense would tell you, if it takes longer to obtain the appraisal report, it will take longer for the underwriter to approve the appraisal report.
Title Company Delays Due To Booming Housing Market And Historic Low Rates
Title companies in the closing process.
- Title companies are also seeing a slight delay in their process
- As every purchase and refinance transaction must-have title work completed, title companies are delayed due to volume
- Just like the appraisal report, an underwriter must review the title report before approving a mortgage file
- If it takes longer to get the title report, then obviously it will take longer to have your title report approved
- As far as closings at the title company are concerned, we are also seeing the process change based on State restrictions
- In many states, you are currently closing mortgage transactions with drive-by closings
- Meaning you will drive to the title company and the notary will watch you sign your mortgage documents through the window of your vehicle
- This will minimize human to human contact
In some states, you may close inside the title office, but the title appointments are spread out more than normal. The good news is, Americans are still closing mortgage transactions even with all the chaos going on.
Hurdles With Verification Of Income Due To Coronavirus Outbreak
- As part of the mortgage process, a lender must verify your income
- It must match your supporting documentation such as your pay stubs and W-2s
- Verifying income is sometimes done through an automated system
- However, if you work for a smaller company, a processor must verify your income directly with your employer
- This is becoming more and more difficult as many Americans are working from home
- This means that the number that shows up in a phone directory may not actually ring the human resources department
- In these times, we ask that a borrower help with the contact information for human resources/payroll
We are all one big team getting your transaction closed, and your help will go a long way.
The Reason We Are Seeing Delays In The Mortgage Process: Underwriting Due To High Capacity Of Loans
Underwriting turn times:
- Underwriting turn times slipped as lengthy as they have been in at least 10 years during the COVID-19 coronavirus outbreak
- A combination of working from home as well as sheer volume created a log jam in underwriting
- Working from home is an adjustment for everybody
- Distractions are going to be part of your work life
- We are now seeing some states allow employees to return to their office buildings
Underwriting turn times are trending in the right direction but are still longer than normal. This is a large factor in the mortgage process taking longer than expected.
Qualifying For A Mortgage With A Lender With No Overlays
Gustan Cho Associates are still a no overly lender even during the COVID-19 coronavirus outbreak. Please see our blog on LENDER OVERLAYS for more information. While our turn times have been affected just like everybody else in the industry, we are still able to close difficult loan files. Most banks are lending institutions that have raised their credit score requirements. We have not had to raise any credit score requirements during these tough times. Whether you are looking to purchase a refinance a home, please call Mike Gracz on 630-659-7644 or send an email to [email protected] The team at Gustan Cho Associates are available seven days a week for your mortgage questions. We look how forward to helping you and your family by your next home or save money on your current property! We are only one phone call away!