What you need to know about financing during COVID
by Sara Ifert
on Friday, February 26th, 2021 at 12:35pm.
Having weathered a year of the COVID pandemic, it's not hard to see the many ways our lives have been affected. For some homebuyers, job changes or furloughs may have decreased the amount of home they can afford. Other potential buyers have shifted to more self-employment work and aren't sure how that affects their financing. Patrick Averill of Thompson Kane has been helping many of our clients secure financing during this unique time. He recently shared a few insights with us about the current lending climate.
Q: How has the lending market changed with COVID? Is it more difficult to secure a loan?
Patrick: Due to COVID, underwriting guidelines have become more strict than they used to be. More up-to-the minute income information is required from buyers than in the past. Verifying employment now needs to happen within 5 days of closing, compared to the 10 days that used to be the standard. Anything that buyers can do to facilitate this process to avoid delays is helpful.
Self employed borrowers will require more proof of their income than in the past. Instead of just providing tax returns, self-employed borrowers will need to provide current profit and loss (P&L) statements. This is to prove that COVID-19 hasn’t negatively impacted their income in recent months. It is also necessary for these borrowers to provide bank statements to show that income is consistently coming into the business.
When working with a lender, buyers can make the process much easier by being prepared with any documentation of their income. Having all this data readily available can help build a case for what type of loan program you may be eligible for.
Q: What about current homeowners who have had a change in employment due to COVID?
Patrick: Homeowners can look into forbearance for current loans if they run into issues with their employment. It is critical to ask questions about how the forbearance will work. Be sure to ask about repayment and all the related terms to make sure it makes sense to go this route.
How Thompson Kane helps homebuyers:
When working with buyers, I make sure to answer all their questions and give them all the information they need. My goal is for them to feel confident as they move forward with purchasing a home. This is a very competitive market, and buyers need to have accurate information to successfully get their offers accepted. I prepare buyers so they can make an offer efficiently, even when they are on-site at a showing. I am always available when needed so buyers have what they need from me to be competitive in this tight market.
Now more than ever, it is important for buyers to work with real estate and lending professionals who understand the current challenges this market presents. It really makes a difference.
I help buyers with all different types of residential loan programs, whether it be conventional, FHA, VA, USDA, WHEDA, or Jumbo loans. The thing I most enjoy is being able to help buyers go through the home-buying process with as little stress as possible. Buying a home can be overwhelming for borrowers. I want to make sure that every buyer I work with has a very positive experience. I truly want their homebuying process to be a happy and exciting time rather than stressful or overwhelming. Clear communication and being available to buyers is really important to me.
Mad City Dream Homes REALTOR Shelley Lazzareschi frequently sends her buying clients to Patrick because she knows they’ll have a good experience. “He and his team (Elizabeth and Christine) are extremely efficient, professional and offer excellent customer service,” says Shelley.