The pandemic is still present in every corner of our lives, housing market included. It keeps mortgages low and affects who is financially able to invest in real estate. Also, we can expect a wave of foreclosures in 2021 unless people step in to prevent it. If you’re considering buying a house today and getting a home loan, here’s what you should keep in mind:
Mortgage Rates Might Fall Even Further
Mortgages hit the record low in the States in 2020, and according to some predictions, they might fall even more (the situation is similar everywhere). So it might not be the worst time to take a plunge and get a new house. If you have a stable job that’s minimally affected by the pandemic, you have nothing to fear.
Home Prices Will Rise
On the other hand, experts think that the price of homes will go up in 2021, albeit slowly. Following a 2020 trend, home prices are expected to go up 2% to 3%. However, home sales are still expected to pick up all over the world. Many young people are starting a family in 2021 and they will certainly power a strong year for home sales. What you can expect is strong competition when trying to find a home that fits your lifestyle and budget.
Suburbs Might Grow
When the pandemic started, buyers were strongly in favor of suburbs. All around the world, buyers preferred suburban locations over cities. However, people who need to be present at the office and can’t work remotely (medical staff, grocery store staff, police, firefighters and similar) will most likely stay in their current homes if they can afford this decision financially.
Do Faster And Better Loan Rate Comparison
Thanks to technology, home loan seekers can now conduct fast and easy loan rate comparisons without having to leave the house or spend hours collecting data from different sources. For instance, people seeking a mortgage broker in Sydney can look online and receive free expert advice from experienced mortgage brokers to find the best home loan rates for their specific needs. You can easily seek a sharp home loan or seek to refinance without having your credit file affected.
Expect Tighter Income Tests
Banks are always chasing profit, so they are a little concerned that people taking home loans experience a dip in income compared to their pre-pandemic paychecks. What that means for borrowers is that you can expect to be asked for recent payslips and more evidence of money entering your accounts. Your employer might also be contacted regarding your current earning and your future status. If you’re a business owner or a freelancer, you might be required to provide previous accounts and tax returns. Many banks are also reducing the bonus income amounts and commission payment amounts they are willing to consider when approving your loan.
…And Longer Approval Times
COVID-19 has affected the efficiency of many businesses, and banks haven’t been spared either. This is especially true when discussing loan processing establishments. Why? In many cases, employees have been asked to work remotely and call centers are overflowing with people seeking assistance with COVID-19-related questions. What we get from this chaos is increased loan processing times, and you might be required to wait anywhere from 4 to 6 weeks for approvals. To speed up the process, try to have all your documents in order so the staff can solve your case as quickly as possible.
Housing Counselors Will Be In Demand
According to research, one of the things homeowners fear the most is that they will be asked to make lump sum payments after a forbearance period expires. Some people are trying to dodge mortgage companies when they attempt to contact them, but are willing to discuss their options with housing counselors. Therefore, we might be noticing a higher demand for housing counselors in 2021.
While lenders have stricter requirements and the housing market has changed a bit, most of us can still get approved for a loan in the same old way. Good luck with your purchase!