While it’s been a difficult year, for many of us, there have been exciting life changes to celebrate in the midst of a pandemic.
If you’re buying a home in 2021, some of the process is the same as ever, but other parts have changed as a result of Covid-19 - often in ways that catch potential homebuyers off-guard.
To avoid unexpected challenges, our Sunbury loan officer Brenda Fiorenza has some helpful advice for homebuyers this year.
Houses are moving quickly
Like many areas, the Susquehanna Valley currently has a limited housing inventory. Spend time looking into the market, researching current housing prices, and comparing similar homes in similar neighborhoods by using online real estate tools and talking to a local realtor, as a good place to begin.
You should also know how much home you can afford before you begin looking, Fiorenza says, so that you’re ready to make an offer when you find a home you like. Some realtors also require a pre-approval before they’re able to show you homes.
Getting a pre-approval
Norry Bank is able to help you get pre-approved for a mortgage amount both in person and online, when you have a current credit report and enter preliminary information about your income, current payments, and the type of property you wish to purchase. “And the best part is, at Norry Bank your pre-approval is free,” Fiorenza says. Learn more here.
But what determines the dollar amount of your pre-approval?
Lenders use guidelines called “debt-to-income ratios” to evaluate your ability to pay a loan. A debt-to-income ratio, or DTI, is calculated by reviewing things like your pay stub and tax information, and dividing your monthly debt payments by your monthly gross income. The ratio is expressed as a percentage, and lenders use it to determine how well you manage debt - and if you can afford to repay a loan.
Different mortgage programs have different debt ratio guidelines, so you should consult with your lender to understand what the current guidelines are for the mortgage programs available to you.
“Since Norry Bank is an independent community bank, we have a wide range of lending options, and we’ll find the right solution that fits you. We’re here to help with all of your home buying questions and needs,” Brenda notes. “Your best bet is to contact us directly to talk through whatever unique financing requirements you may have.”
You can find a lender based on your location by visiting our website and selecting a branch office.
Communicate with your lender early and often
After you’ve met with a lender and gotten your pre-approval, you should stay in touch! Pre-approvals are usually good for 90 days, but if your search takes longer than that, you’ll want to ask your lender if the pre-approval is still good. Then when you have a formal sales agreement on the home you want, you can make an appointment to meet with your lender again to work through the formal loan application together.
Things may take longer right now
Don’t be surprised if your home-buying process takes longer these days than it used to: as a result of Covid-19 challenges, appraisers have been backed up with appointments, and some courthouses are currently offering limited hours or are available by appointment only.
If you’re working with a realtor who says that they “guarantee” a 30-day contract right now, be cautious, Fiorenza advises. A more realistic timeframe, from the time that your offer is accepted to when you’re able to close on the house, is 60 days right now, she says.
In addition, “the housing market’s current refinance boom has made getting an appointment with an appraiser or local attorney harder than usual,” Fiorenza indicates.
But even with Covid-related challenges, Brenda offers reassurance. “At the end of the day, we’re with you every step of the way – from the start of your search to the day you close on your new home,” she says. “I’m proud to work at Norry Bank and help folks find and purchase a new home. It’s a really special part of someone’s life, and we get to be involved and make things easier for our customers along the way.”