Mortgage Lending Guidelines & Corona Virus
The arrival of the Corona virus has changed our lives significantly and it should come as no surprise that it has changed the mortgage lending world. Not only has it changed the interest rate market for refinance and purchase loans but it has changed at least on a temporary basis how mortgage loans are evaluated on their way to approval through closing.
We are seeing mortgage lenders tighten up some standards when it comes to debt ratio, credit, reserves, etc. Whereas these are discussed as temporary in nature if you are someone who has a loan in process or have been qualified for a purchase be sure you are on top of things with your loan originator. It is a stressful time and you want to make sure if the right home shows up in this tight market you are ready to hit the ground running. Inventory continues to be a problem, be the most qualified buyer by taking steps now to know what you need to know.
The perfectly reasonable reaction by at least half the governors to keep their people safe has resulted in the potential that folks will not be able to make mortgage payments going forward. New mortgage loans are then held to a higher standard to make sure the business that is being done is higher quality. More assurance is necessary to make sure folks are employed.
Best practice is to stay in touch with loan originators and real estate agents to make sure everyone is aware of their responsibility during this time. Make sure your pre qualification is still valid or what you need to move forward.