The coronavirus outbreak has changed certain aspects of home buying. In some ways, it’s become more challenging. However, in many ways, it’s actually improved. Here are some of the differences you’ll notice about purchasing a home in 2020 and how to prepare for them.
2020 Homebuying Overview:
Qualifying credit score has risen for some lenders. Not a concern with most loan programs, but it’s good to be aware of this change.
Minimum down payments are also increasing. Again, not applicable in most loan options.
Some areas have seen a slowing of available homes on the market. Fewer houses to choose from makes for a more competitive environment.
Record low rates have lured new buyers. Read below for information on beating competitive offers.
You’ve also likely seen a decline in open houses and a rise in virtual home tours.
Behind the scenes, the mortgage process has also changed:
Home inspections and appraisals. They may take longer to complete due to new safeguards.
Physical documentation for loan applications. Most (if not all) paperwork is eliminated, reducing backlogs and speeding up funding.
Remote closing opportunities are expanded. Ask us for details on how we’ve digitized the loan process for our borrowers.
Changes to Credit Score and Down Payment Requirements
Generally speaking, the minimum FICO score needed for a conventional loan was 620 before COVID –although federally-backed loans allow for much lower credit scores.
Post-pandemic and mainly in response to ambiguities in the market, several large lenders raised the minimum FICO requirement for new borrowers. Some lenders were also less flexible when it came to down payments under 20% of the purchase price.
What this means for you: Having your finances in order and getting in touch with a loan expert early on in the process is more important than ever. Ensure you get the most accurate information and have a plan for buying a home in 2020 by talking with a loan expert as soon as possible.
Scarcity of Available Homes and The Rush to Buy
Certain areas in our community already experienced shortages in homes for sale as compared to home buyers. This was further exasperated homeowners pausing the sale of their homes due to the pandemic. When we combine this situation with the flood of new buyers fueled by record-low mortgage rates, you can see how the competition is more fierce than before.
What this means for you: Don’t let competition keep you from your homebuying goals! Home prices have fallen in many areas –making it possible to buy a home in an area that would’ve been out of reach before the pandemic. Get prequalified as soon as possible, and confidently (and aggressively) make a bid on your dream home.
Navigating the real estate market is more challenging in 2020, but with a mortgage expert like us by your side, you’ll be sure to stay in the loop with the best possible deal. Contact us today to get started