So much has changed as a result of the COVID-19 pandemic, with the shockwaves not sparing any industry – even the housing sector. Even associated activities such as the handling of all paperwork and transactions are affected, including applying for a mortgage.
If you’re exploring the Dublin, CA real estate market, or are deciding on a property to purchase while the pandemic is still ongoing, you will soon realize that several adjustments have been made to the process of getting a mortgage. Then again, this shouldn’t discourage you from proceeding with your plans of having your own parcel of real estate in this beautiful suburban city in the Tri-Valley region. The changes below will be your guide in anticipating your journey toward mortgage approval so that you can be better prepared for it.
The digital shift
For starters, much of the application process has shifted online. Realtors and lenders were able to quickly adapt to the situation and figure out how paperwork can be sent, signed, and validated entirely online. Pre-pandemic, nothing but a face-to-face meeting can legitimize each deal. But with present circumstances, real estate agents and lenders had to develop a solid comfort level and ease with the new setup.
Lower rates, but…
You’ll also find that interest rates nowadays have dropped, even reaching below 3% for five weeks. This should be the best time for people to purchase houses and encourage current homeowners to refinance. However, things aren’t exactly going as expected.
The move to lower interest rates has made mortgage lenders warier of aspiring borrowers. Credit standards have become more stringent – minimum credit scores and down payment requirements were raised and incomes are being placed under tighter scrutiny.
With millions of homeowners not being able to pay their monthly mortgages or making financing requests due to the spike in the unemployment rate, lenders are now inclined to protect themselves against possible delinquencies and defaults. Even the gainfully employed may seem like a risk.
More documentation, longer approval
Even if you’ve applied pre-pandemic and approval seems highly likely, you may find that your lender might ask for additional updated documents to prove that your income is current. As an offshoot of that, expect your mortgage application period to be extended.
Approved or not approved
You might also find that certain terms and requirements have changed throughout the time of your application. Thus, it’s always best to speak with your lender regularly to be updated on changes and to make sure that you still qualify for a mortgage.
A good way to tip the situation in your favor is by improving your credit scores. Before, a score of 620 would have been sufficient. Today, you’ll need a higher score to have an easier time with approval.
Home buying in the time of COVID-19 can be tricky, but it can be done with the right information and guidance. Contact me, Alice Chen, at 925.216.0676 or send me a message here if you need assistance in navigating the process of applying and getting approved for a Dublin, CA mortgage. I can also assist you in finding homes for sale in Dublin, CA.