Should I buy a new home during COVID-19?

A pandemic itself is not a reason to buy a house. Nor is worldwide contagion a reason NOT to buy a house.

But know you’re not going to get a good deal on your next house because of Covid-19 (It’s not an opportunity). 

Nor are you going to fail in the process specially because of it (mortgages are still available).

I would go as far to say buying (or NOT buying) based on ANY news cycle or current or economic event is the wrong way to go into any financial or long-term decision.

What you will experience when transacting under the umbrella of the COVID-19 pandemic:

1) A noticeably longer timeline. Any real estate professional that isn’t self-deceiving will tell you that the current environment is much more complicated.

2) Some things are unprecedented. This means that a question could come up, that there is no policy for yet. So the list of “that’s a new one!” or “I haven’t been asked that yet” is starting fresh. Anyone (this includes attorney’s, mortgage Loan Officers, or even home buyers) that think this is business as usual is going to be in for a difficult and challenging process. 

3) Transactions needing an appraisal may be more expensive and will certainly take longer. Not all mortgages need an appraisal but if yours does – don’t expect to set any time records. 

4) Be prepared for a plot shift. What if the Registry of Deeds was closed? Smoke Alarm certificates were unavailable? Appraisers wouldn’t enter homes? Final meter readings couldn’t be scheduled? These things all happened. The resulting challenges created better flow and process. Now, however, everyone in the process needs to remain nimble to expect the unexpected. Not to anticipate it, but not to crumble when it arises.

5) Technology processed the severity of Covid-19 on the lending industry faster and more succinctly than what happened following the 2008 Mortgage Meltdown. The resulting restrictions started  w-a-y  upstream at the Mortgage Backed Securities level and with Fannie Mae & Freddie Mac. Those institutions and agencies rolled out program and guideline changes with days.

Consequently the “box” to fit inside of to be approved for a mortgage has never been smaller. All sides of the box have been trimmed down including:

– Credit
– Income (type and amount)
– Employment 
– Collateral 
– Loan size
– Program Types

We’ve processed 44 Covid related underwriting guideline changes as of August 2020. I assure you that none of those are making it easier to receive a mortgage.

Our suggestion to circumventing these issues isn’t more research. It’s communication. Open. Uncomfortable. Live time and raw. Your solution isn’t coming from an App or waiting for a guideline to change.

And now, more important than ever, it’s necessary to have an exit strategy. Always reserve the option to walk away if all the parties aren’t playing by ethical and legal guidelines. Preserving your options may turn out to be the most important attribute available to you.

Godspeed.