How it has been made easier to close on your mortgage during the pandemic
Many people are probably worried about how they will close on a mortgage in these times of the pandemic. The numerous paperwork, lender correspondence and the money a borrower has to work around make the process challenging enough even under normal circumstances.
Luckily, lenders and a host of mortgage institutions have adjusted the pre-closing requirements to enable potential homeowners and refinancers carry on the process through lockdowns.
Examine the entire mortgage application process from your lender
Since the outbreak of the coronavirus, financial institutions all over the world have been adjusting to new government rules and healthcare guidelines. Noteworthy, the nature and timing of your mortgage transactions are likely to be influenced by several factors such as:
• Your lender and their work operational structures
• The type of mortgage you are seeking (is it Fannie, USDA, Freddie, FHA, VA, Jumbo loan, etc.?) Each loan type may vary for borrower requirements
• Specific Requirements from the insurer of your title to the property
• The state where you live and lock-down rules specific to the state
To a potential borrower, the requirement from the preferred mortgage lender is the most important in the above considerations and has the greatest impact for successful deal closure.
Additionally, mortgage requirements and rules may vary from lender to lender and there are major changes that could affect a large group of refinancers and home buyers.
Changes to how home appraisals are done
An appraiser provides a professional opinion of the value of your property. In almost all cases, an appraisal will consider and compare prices of properties that have recently been sold in your area and make the necessary adjustments.
A comprehensive home appraisal requires a professional appraiser to conduct a physical inspection of your property, and so many are ending home visits. Instead, home appraisals are being conducted based on:
1. Drive-by appraisals – The appraisal inspects the house from the edge of the home and only by appointment. The appraiser may stroll on the yard as the yard and other external areas influence the value of the property. Sometimes they will peer via the windows.
2. Video Tours – This is where the homeowners show the appraiser the inside sections of the house using a smartphone, tablet, or laptop. The type and extent of house finishes and other permanent installations also influence the value of the house.
3. Desktop Market Research — This is a method of property data collection where the appraiser does not leave their home office. They will source for value comparable from the borrower’s neighborhood, rely on the home’s current and past listings and may use Google Street View for a further online study.
Employment and proof of income
You will still have to submit supporting documents to your lender to process your request for a mortgage.
The borrower’s credit report, credit score, income levels and employment status will be monitored all through until the loan application is closed. Unfortunately, the lender will not consider furlough pay and unemployment income when qualifying you for a mortgage.
On the other hand, lenders are aware of the difficulties in access to paper files documenting the employment status of the borrower now that a majority of Human Resource (HR) managers are working from home. In most cases, the lender will be willing to accept a phone call or video chat with the HR representative to confirm you are still employed.
Remote mortgage closing during the pandemic
A majority (not all) states and lenders accept e-signatures and online notarizations. If you have access to this advantage, then you, as the borrower, may not have to appear in person to close your mortgage deal.
To provide your e-signature, your notary must see you e-signing the document and therefore will require you to have video conferencing devices. Thereafter, the notary will authenticate your identity using public records.
Potential issues with your title when you close
This is another mortgage closing hurdle that can be challenging to the borrower. This is because a majority of county recording offices are closed or have altered how they process documents and other procedures. You will talk to your loan officer, lawyer or real estate agents if you are affected in this sense.
Conclusion: It is still possible to close on a mortgage
It is a good gesture from all the lenders, real estate professionals who are helping homebuyers, sellers and mortgage holders to refinance easily and close deals safely now this pandemic. Despite several impediments, borrowers can find joy in the convenience of e-signing and remote closing from home.