As a prospective homeowner, it’s normal to face a lot of challenges when buying a home. However, going into the real estate market is a lot harder during this time of pandemic particularly when it comes to mortgages. According to data reports, mortgage rates have fallen to record lows this year. However, refinancing has slowed down significantly as lenders became more stringent with their lending standards. Read on to know more about what to expect:
Mortgage refinancing in the time of COVID-19
Since the pandemic has hurt the economy, a domino effect of sorts is upon the everyday citizens of the United States. The unemployment rate has skyrocketed and many Americans have lost huge amounts of money or lost their jobs entirely. But what has this got to do with people who are looking to refinance their home loan? What about people buying a home Myrtle Beach?
The very best thing that every homeowner and soon-to-be homeowners should do is to know what to expect. As unemployment rises, so are the standards set by leading firms. According to experts, borrowers may be required to take extra steps in order for them to qualify for a loan or to refinance their existing ones.
Credit providers are going to look for higher credit scores
It wouldn’t come as a surprise for lenders to tighten mortgage loan standards especially in a key moment such as this pandemic. It’s not that they are just trying to make it harder for their clients but rather protecting their interests. With high unemployment rates, lending money comes with a greater risk. It’s these risks that lenders are trying to lessen by setting the bar higher. Federal Housing Administration (FHA) loan refinancing has required a credit score of 679 starting last July 2020. That’s up 11 points from one year ago. Whether you are refinancing your loan or simply trying to get a loan application approved, a higher credit score will be much better. It will help to ask your local real estate agent for some assistance in case you run into a wall with your finances.
Loan refinancing might be delayed
As previously stated, refinancing loans will be a lot harder. Other than that, customers need to expect delays along the way. It should be noted that many homeowners will try to refinance loans. This will give credit lenders plenty to work on which will undoubtedly cause delays.
Self-employed individuals will face more paperwork
A few months back, Fannie Mae and Freddie Mac have introduced extra documentation requirements for borrowers who are self-employed. This is a precaution set in place by lenders to ensure that borrowers have healthy, stable finances and can make payments on time.
Everything will be done digitally
Many workplaces are now running on a remote location and operate wholly on online platforms. This is basically a measure to prevent furthering the spread of COVID-19. As for making the entire process of applying for a loan or refinancing, it is best to talk to your lender about it. You could also seek the advice of experts like Full Potential Real Estate regarding these matters.
Are you planning on buying a home but don’t have a concrete plan on how to? Call Full Potential Real Estate today! You may reach us at (843) 492-4537for for more information on our services.
Full Potential Real Estate, LLC
Myrtle Beach, SC 29577