Everything you need to know about homebuying probably went out of the window the moment the pandemic hit the country. Yes, there is interest again in real estate but no, things will never be the same. They might never be the same for the next couple of years or even beyond that. So, what do you need to know about homebuying? Is it harder or easier to buy a home right now?
Interest rates on home loans are at a record low. But while you think that’s a good sign to buy a home right now, you should know that it’s also fluctuating like crazy. Interest rates are jumping up and down, which makes it hard for homebuyers to follow the trend and to know whether it’s a good time to buy or not.
That’s why you need a mortgage broker. The broker will help you find the best rate during this time. Since they also have access to many lenders, they can do the research for you. They can even advise you on the best rates that you can get at this time and with deference to your financial status.
What’s the Deal Right Now?
Lenders are not too comfortable letting people borrow money. They are particularly hard on people who have lost their jobs or have been furloughed at work. Borrowers with unstable income will most likely be rejected unless someone is brokering a deal for them.
There was a time when lenders were offering loans to people with credit scores of 620. But reports emerged today that lenders are raising that requirement to 680 and 700. Some are also demanding that the borrower shoulder higher down payments. Before the pandemic, the average down payment for a house is at 5% to 6%. But today, lenders want borrowers to put down a 15% down payment before they process the loan application.
How Do You Apply for a Loan Right Now?
The first thing you have to do is collect your financial information. If you’re employed, gather the documents from your employer. Make sure the lenders know that you are gainfully employed and that your income is stable enough to pay off the loan. A mortgage broker should help you fix the documentary requirements. But more than that, you’ll gain a perspective about your eligibility for a loan.
Things are a lot different right now, though. You won’t be able to go to the bank and talk with a loan officer easily. The best thing for you to do is to reach out to them through digital channels. The interview will most likely happen via teleconference while you also have to send the requirements via courier or drop-off boxes outside the banks.
It will take a while for the bank to get back to you. Even though restrictions are already lifted in most of the states, there are still a lot of apprehensions from the industries. Some are working with a skeleton force so what’s normally a three-day processing period might take double that time. The circumstances today will require that you wait at least six weeks to hear from the lenders.
Everything Is Digital
If you’re buying a home during the pandemic, you cannot attend as many open houses as you want. You’ll have to make do with virtual tours. The real estate broker or the homeowners themselves will tour you around the house via livestream or recorded video. Thanks to technology, you can even navigate the house on your own via a virtual reality program.
This is nothing new. Real estate brokers have already been using teleconferencing and 360-degree videos since before the pandemic. But Covid-19 has, of course, boosted the virtual tours of real estate properties. One company said that its agents use 3D home tours to sell homes while some had a 500% increase in video tour requests.
The buying experience went digital, too, because of social distancing orders. It doesn’t look like such orders will be lifted very soon. Thankfully, real estate brokers and homebuyers are comfortable enough transacting over Zoom and other teleconferencing platforms.
So, is it hard or easy to buy a home right now? It’s very different from what the market and industry look like before, but it doesn’t mean that you shouldn’t make an effort to afford a home. With the way the market is going, you can buy homes a lot cheaper right now. The only hindrance is whether you will get a loan approval or not. But that one depends on your financial status and your choice of a broker.