Home loans: Patience in a pandemic

Whether you need more space, less maintenance, more country, or less rent, you are ready to buy a home during a pandemic. Like most everything else in 2020, the mortgage experience has changed and practicing patience has never been a more important part of the home-financing process.

Buying a home even in “normal” times can be a time-consuming task, but preparing for an unusually long journey will help minimize stress for both you and your home-buying partners. In a world of instant digital answers, you might think the home-loan process would be speeding up. So you must be wondering, why are home loans taking longer to move during the COVID pandemic?

  • Your lender is juggling a continued robust purchase market along with an all-time high refinance demand.
    • Some estimate over 10 million households could benefit from refinancing at today’s rates and your loan officer feels like they’ve talked to every one of them. Your loan team has now adapted to working remotely, but sheer volume is still a factor. Know they are working all hours for you (even in their pajamas).
  • The financial documents that you have submitted now only have a lifespan of 60 days, down from 90 to 120.
    • You will likely need to provide bank statements and income documents twice through the process, all while battling your fourth grader for Wi-Fi access to your online banking.
  • Your employer will need to verify, perhaps multiple times, that you still have viable income.
    • The sad reality is 2020 is the year of unexpected income changes and job losses. Your HR department will be asked to double — if not triple — check that you are still on track with similar earnings as past years and that you have no negative impact due to COVID. If you are self-employed, expect to be asked to provide much more detail on your current year earning, which may require your CPA’s help.
  • Your appraiser has time for fewer home visits per day to allow for safety protocols, which means reports are taking longer.
    • Since appraisers enter multiple homes every day, this extra preparation and “gearing up” is crucial — and time-consuming — in an already incredibly busy market.
  • Title companies are also feeling volume constraints as they receive insurance orders for both refinances and purchases.
    • They require extra time to allow for socially distanced closings, perhaps in separate places to include your car. Curbside closings? So 2020 — and we thank them for their creativity.

In a nutshell, slow down for peace of mind. Avoid rush deadlines, which may lead to disappointment or additional costs. Communicate with your lender early and often to prepare your initial underwritten preapproval in advance. And try not to sigh too loudly when your lender asks for “just one more” document.

Jessica Duren is first vice president, private banking and mortgage lending for Park Bank.

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