What Does Covid-19 Mean for My Mortgage or Loan Process?

Our friend, Chris Juarez with Waterstone Mortgage has answered some questions that clients as well as our teammates are asking. Let us know if you have any questions during this time of uncertainty!

Concerning qualified buys who are on furlough or are no longer working due to the COVID pandemic. Unfortunately, lenders are required to verify that the borrower is still gainfully employed at the time of closing. Now more than ever we are seeing regulations tighten up as investors and government secured loans are weary of the current state of affairs. Most mortgage companies and banks have increased their credit limits and tightened up their qualification restrictions.

Tips & info for all qualified buyers:

1. DO NOT!!! Put your current loan in Forbearance. This should be a LAST RESORT ONLY. IF you put your loan in forbearance, you will NOT be able to qualify for a new home any time in the near future AND it will cost you MORE money in the next couple of months than if you had just made your regular scheduled payment. DO NOT DO IT.
2. IF you have been qualified by a reputable lender and you experience temporary loss of employment- It is OK to file for unemployment. Communicate with your lender & real estate team and place your process on hold. NOBODY should (or can) want to close on a home without having secured income established to make your payments when due.
3. If you are qualified and under contract to purchase a new home and you experience temporary loss of employment- Unfortunately, you will NOT be able to close on your loan until you are gainfully employed at the same rate of pay that you qualified under. Communicate with your lender and real estate team immediately, the process will need to be on hold but does not necessarily mean you will not be able to buy IF you get back to work in the near future OR if you are able to find new employment elsewhere.
4. YOU CANNOT CLOSE WITHOUT YOUR MOST RECENT PAY STUB.

What are lenders doing (Waterstone Mortgage) during this time to help:

1. IF a borrower is temporarily out of work OR has lost their job all together- We are able to extend rate locks and contract deadlines AT NO ADDITIONAL COST. However- We cannot close without proof of employment and an updated pay stub.
2. We are able to underwrite files and issue preliminary approvals- IF/WHEN the borrower gets back to work- their closing timeline will be significantly expedited.

This is difficult times for all of us, but we WILL get through this TOGETHER and be stronger for it.