Income, Employment, Loan Docs, and Rate Locks – Getting a Home Loan During Covid 19

First and Foremost, as you are reading this, I hope you and yours are safe and healthy! With the Shelter in Place now in full swing, employment on the rise and an untold number of mortgage forbearances looming in the future, getting a mortgage has definitely changed. Currently, it can be pretty difficult to find a good home for certain clients such as self-employed borrowers and investors depending on their line of work. I have one lender that quit using rental income altogether. Other lenders are cutting self employed income. Many lenders are requiring self-employed borrowers to get tax transcripts from the IRS since the IRS is not providing them to lenders currently.

As far as W2’d employees are concerned, the process of verifying employment at the end of a transaction has become quite cumbersome. I have had lenders verify employment 4 and 5 times. I have had borrowers who have had trouble getting their employer to contact the verification of employment center and the delays cost them on their rate lock. It feels like the verification of employment process has probably added an additional 4-7 days onto the transaction.

While there are delays with closing, we are still closing loans. And what does that look like? Title companies are open. Many are working from home and others are in the office, but the offices are not open to the public. Signings are mobile and usually done at the client’s house. I have heard of them done on a card table in the driveway, in the garage, etc. No pens are exchanged, sanitizer is present.

Rate locks and lender pricing is interesting as well these days. Some lenders will not lock your loan until you are clear to close. Others have capped their rates making it more expensive to do transactions like cash out investment properties.

With all these changes going on I truly am grateful for my clients, and my lender teams, and the fact I am a broker that can help my clients navigate through these unprecedented times. For More information call or text me at 510.626.9100 or email me garrick@freshhomeloan.com

Garrick Werdmuller

garrick@freshhomeloan.com
(510) 626-9100