It’s a crazy time for everyone right now with the COVID-19 pandemic forcing life and the economy to come to a screeching halt in most areas of the United States. As with most things, the real estate market is changing too. Even though there are changes to the way things are working, home buying and mortgage lenders are still functioning well.
The real estate and mortgage lenders are actively making changes to their policies to protect themselves, current customers, and future homebuyers.
Home Buying and New Mortgages: Things to Know About House Shopping during COVID-19
If you were planning on purchasing a home soon, there’s no reason that you need to put your plans on hold because of the Coronavirus pandemic. Houses are still going on the market, bids are being submitted and accepted, and properties are changing hands.
“The one thing we are certain of is the housing market is still booming,” said Aubre Houck, a Loan Officer from Fairway Mortgage Lender. “Now more than ever, we are seeing our clients have the time to focus on personal goals of buying or selling their homes.”
Here are some key points to know about the changes and ways you can continue your home hunt while social distancing:
Technology is Your Best Friend
The real estate industry is taking advantage of updated technology. It can still offer many of the same services to prospective buyers and sellers as they did before. From the virtual showing of homes on the market to buyer and seller consultations and meetings, you can still work directly with your broker or lender while also remaining safe.
If you’re still early in the process and a new homebuyer, many sellers are providing virtual seminars for potential clients. Learn all about the home buying process through video conferencing software like Zoom, so you can continue your home buying journey and prepare yourself the best you can.
Visit Prospective Homes From Afar
If you’re practicing social distancing and working from home, the odds are – like most Americans – your daily routines are all out of whack. A break in the day is an excellent way to get out and refocus your brain. Give yourself a break and some fresh air by visiting a few properties each day. You can still practice proper social distancing by remaining in your car and driving by homes and neighborhoods you’re interested in. Just remember to keep your windows up!
Lending Requirements are Tightening
With the risk of first payment default, forbearances and lending liquidity lenders are tightening guidelines across the board and we are seeing increases to minimum FICO requirements. Make sure you are communicating with your lender regarding their specific requirements and how this may impact you.
Find Out if You Are COVID Proof
With lenders tightening their guidelines surrounding COVID it is important to ensure that you are COVID proof. Is your credit score able to withstand potential guideline increases? Will your lender still be in business to fund your loan? These are all important things to evaluate when purchasing a home.
“Keep in mind that once your credit is pulled, it’s good for 120 days so even if you are facing job uncertainty, do not be afraid to get evaluated and set a game plan moving forward,” Houck said.
Beware of Scams
Unfortunately, there are folks out there who will try to take advantage of us at our most vulnerable. The FHFA released information alerting mortgage borrowers about scammers who may try to steal personal data, your money, or your home.
You should be vigilant and suspicious of anyone who asks for your credit card information over the phone, or any promotion that requires upfront cash payments. Scammers are using spoofed numbers and calls that may indicate they’re calling from a different location than they are. For more information on what you should look for and do, read the full announcement from the FHFA here.
Current Mortgage Borrowers: Help During COVID-19
If you’re a current homeowner with a mortgage, the COVID-19 pandemic is probably causing you a lot of financial anxiety. If you’re affected by COVID-19 and worried about meeting your mortgage payment obligations, here are a few things that can help you navigate these uncertain times:
The CARES Act
The Consumer Financial Protection Bureau guides federally backed Frannie and Freddie loans. The relief package, known as the CARES Act, is signed into law by President Donald Trump on March 27th.
If you are unable to pay your mortgage due to COVID-19, you must call your lender as soon as possible. They are overloaded with calls right now, but you will want to get this settled ASAP. There are a few different ways that lenders are helping the borrowers navigate the economic impact of the coronavirus. You’ll need to call them and ask.
Foreclosures and Evictions
As part of economic relief efforts in the face of the COVID-19 pandemic, the Federal Housing Finance Administration (FHFA) directed Fannie Mae and Freddie Mac to suspend all foreclosures and evictions. This includes both primary and secondary residences as well as investment properties, and it will last at least 60 days.
While these are the guidelines for the government-sponsored mortgages of Fannie and Freddie, you should also contact your mortgage lender if you’re facing foreclosure or eviction due to COVID-19.
Also, be sure to truly weigh your options about a forbearance on your current home as this could impact your ability to qualify for a home loan in the near future.
What if I Can’t Make my Mortgage Payment?
If you can’t make a payment on your home loan due to COVID-19 problems, then you will probably qualify for a forbearance. A forbearance is a suspension of mortgage payments for a temporary period without penalty. In the case of the government loans of Fannie and Freddie, you also won’t incur any late fees or penalties during this time.
However, to qualify for a forbearance, you need to apply for it. That can take some time, so it’s best to make a phone call to your mortgage lender as soon as possible if you think you won’t be able to make your payment. Even if your mortgage is with a private lender, many of them have also offered lenient payment options and forbearance plans for consumers. Your best bet is to make a phone call and ask.
Armed with this new information, is your credit score where it needs to be? If not, now is the perfect time to address it. You can hire a credit repair company to help you bring it up, or learn about other ways you can start building credit on your own.