Reading Time: 2 minutes – Posted: October 2020
A recent WSFS Bank survey found that homebuyers feel high levels of anxiety when purchasing a home, even more than when getting married by a wide margin (64% vs. 36%). As we have all seen in recent months, the inventory shortage is contributing to multiple offers and even more anxiety for buyers.
Due to these factors, buyers are depending on agents and lenders to help them navigate the homebuying process more than ever. Our study found that 77% of potential homebuyers felt increased anxiety in finding the right person, such as a realtor, to help them due to COVID-19 compared to 68% pre-pandemic.
Here are a few tips to help speed up the mortgage process so your clients are ready to close on their dream homes.
While this is an obvious first step to real estate and mortgage pros, the current inventory shortage may motivate homebuyers to jump right in, looking for a new house before even looking for a lender – or a realtor!
Realtor.com found in a June survey that only 52% of those planning to purchase a home in the next 12 months had gotten a pre-approval before starting their home search. Make sure your clients are, at the very least, beginning to look for a home and starting the pre-approval process simultaneously.
Collect as much documentation as possible
Speak with lenders to determine what criteria and documentation they currently require for pre-approval and to complete the loan process. The pandemic’s impact on workers has changed the lending landscape for some borrowers, including self-employed and gig economy workers, so many lenders require more recent income and other documentation than traditional employees with W-2s.
According to Realtor.com up to 20% of potential borrowers may have trouble getting a mortgage due to stricter standards, so it’s important to be prepared and bring as much documentation to the table as possible to help secure a loan.
Help your client be decisive
With the proper documents in-hand, encourage your clients to make informed but quick decisions when they find a house they like. With such steep competition for homes in the current buying market, lenders are inundated with mortgage applications and trying to keep up so try to find a bank that can close quickly, efficiently and confidently.
Finally, borrowers should ask their lender how long the process will take to close, and make sure they’re aware of the expiration date on the interest rate they’ve locked in since with rates so low, they could go up.
About the Author – Jeffrey M. Ruben
Jeff Ruben joined WSFS through its acquisition of Array Financial, a full-service mortgage banking organization, and Arrow Land Transfer in August 2013. Prior to forming Array and Arrow, Jeff served as Executive Vice President of American Business Financial Services, a publicly traded national mortgage lender.