Posted: July 20th, 2021
How have you been surviving since the COVID-19 pandemic hit last year? Are you recovering swiftly with this season’s economic incline? Or are you still struggling to get back on your feet after being furloughed or laid off? No matter where you stand today, one thing is certain: the real estate market has changed substantially since the onset of COVID-19 in 2020.
Even a year after the first lockdowns were put in place in Florida, many residents are feeling the financial impact of COVID-19. While there have been some advantages to shopping the real estate market now, there are equally as many challenges that you need to understand before beginning your new home search. You may be wondering, in terms of your own financial situation, “Will it be harder or easier for me to get a mortgage during the pandemic?
The answer to the question is, it depends. In many cases, it will be more difficult to get a mortgage if you’ve been financially impacted by the pandemic. Lenders are putting greater restrictions on credit score, employment verification, and terms to ensure they don’t lose more during this tumultuous time. However, there are select advantages to home shopping during this time of rebuilding and growth:
Your interest rate will likely be lower, if you can get approved.
Interest rates have steadily decreased since the pandemic, and if you’re able to lock in a low rate, you should take advantage now. However, this is not so simple for every homeowner. If you have a lower credit score or if you’ve been unemployed during the pandemic, you may not qualify for one just yet. In order to be more attractive to potential lenders, you want to start building credit now and work on getting back to work as soon as possible if you’re still minimally employed or unemployed.
You’ll need to prove your income more than once.
During the pandemic, many mortgage closings were delayed due to layoffs. Because of this, many lenders are making their proof of employment requirements much more stringent. What used to be a two or three-step process can now require five or more employment verifications. They are also typically spaced apart to ensure that your employment and income are stable over time. You’ll need to be patient and stick with the process to get that coveted low-interest rate.
It’s a great time to take out a home equity loan.
Homeowners can take advantage of the lower interest rates in the form of a home equity line of credit as well. This allows you to consolidate debts, invest in home improvements, and capitalize on lower interest rates all at once. However, because the housing market is still volatile because of the pandemic, we recommend that homeowners take things slow and carefully consider all of their options before refinancing.
Despite the tumultuous year we’ve all faced, you can still find great mortgage options for your new home in Central Florida. To learn more about the best strategies for buying a home during COVID-19, contact Tradar Real Estate Solutions today!