Along with the uncertainty that the COVID-19 pandemic has brought, many who were planning on or even simply considering closing on a mortgage are left in an uncertain position. For those who generally have found themselves in a sustainable position at a major company, layoffs to protect public health for what seems to be an indefinite basis have complicated expected income levels over the course of the next few years at the very least. How do you plan for the future, like applying for a mortgage during the COVID-19 pandemic?Verify my mortgage eligibility (May 25th, 2020)
According to Forbes, “Millions of individuals and families across the country are facing financial hardships during the coronavirus crisis. It’s understandable that people are concerned. And the situation is escalating: Between March 15 and April 4, nearly 17 million U.S. citizens filed for unemployment benefits. Nevertheless, this period of time also provides a potential unprecedented opportunity not seen since the 2008 economic recession for potentially acquiring real estate at bargain prices. Through learning the foresight behind re-evaluating the economic conditions presented by the COVID-19 virus, securing a mortgage after being laid off should be relatively straightforward.
Focus on Cold, Hard, Cash
Cash is king in the current economic climate. Especially with the recent stock market collapse, a large amount of cash to put down will speak volumes in the eyes of a mortgage seller, especially when compared to other potential applicants. Most banks will be searching for clients that have a large chance of having definite proof regarding the ability to pay on a newly signed mortgage over a period of the next few years. Showcasing proof of your financials, which include current debts, assets and debt-to-income ratio are quintessential to giving yourself an edge in this process.
Look into Applying Jointly
Applying jointly for a mortgage is generally standard procedure if you are married. Although lenders like to see both applicants as currently employed, it is typical for one of the applicants to be unemployed. According to millionacres, “If you’re applying jointly with another person, absolutely. There are plenty of scenarios where a couple applies for a mortgage where one works and the other doesn’t, so this situation is no different. If you’re applying jointly with a spouse, and you’ve lost your job but your partner has a steady income, there’s a good chance you’ll get approved. The amount you’re eligible to borrow, however, will generally be lower than the amount you’d be eligible for with a dual income. Therefore, while you may be able to get a loan, it may not be enough to buy the home you want.”Verify my mortgage eligibility (May 25th, 2020)
Since during this period of time, it is most likely not possible to tour a home or apply for a mortgage in person, opt to complete the process digitally instead. With video conferencing, the entire process can be completed online at home from your computer or smartphone. From the touring of various homes available for sale to completing the final paperwork, telenetworking will be essential. Make sure that the mortgage service provider or real estate agent you are applying with supports this method for completion of the process.
Consider Mortgage Rate Volatility and Mortgage Processing Time
Mortgage interest rates are currently in a volatile state of flux during the COVID-19 pandemic. Unlike other interest rates, mortgage interest rates rise and fall based on supply and demand within the real estate market. It is essential to be flexible and patient, keeping in mind to strive towards a lower interest rate for your mortgage if possible. Completing the mortgage application process during this time is taking longer than normal, so start earlier than you might otherwise.
Be sure to contact us at Atlantic Home Mortgage if you would like to learn more about applying for a mortgage during the COVID-19 pandemic.