“In this COVID-19 world, what questions should I ask the buyer’s lender before accepting an offer on my listings?”
When was the last time credit was pulled? Ideally the last week or so.
If an FHA/VA offer, can you fund with their FICO today? Many lenders have changed the minimum FICO requirements. If the buyer’s credit was pulled prior to that change, do they still qualify?
Are you able to lock loans prior to final approval or appraisal? You want a “yes” – if rates go up after application, it could hurt their pre-approval or scare the buyer away from an increased payment. Many lenders are not allowing this. If that’s the case, can they withstand, and are they prepared for a rate increase?
What happens if the loan program is suspended during the loan process? Once you are locked you are “mostly” safe from program changes or program suspensions.
Could you force a lock date, per the contract, to protect your seller from suspended or canceled loan programs? Write it into additional provisions. Some lenders are not allowing loan to be locked until loan is approved and, in some cases, once all prior to doc conditions are met. Guild can lock day 1
Have you verified the Borrower’s full-time employment within the last 24 hours? Employment is tenuous today. It can change at any moment.
What are your current underwriting turn times? It longer than 3-4 days, a 30-day, or less, COE will be challenging.
Will you be requiring employment verification at the Funding/Closing Table? If they want verification done on or the day before the closing date, it could be a challenge to close on-time if the employer is not responsive or available.
What is your company’s policy on appraisals currently? Do they allow drive-by or desk reviews?
What are your appraisal turn times? If longer than 10 days, a 30-day close will be challenging.
Can the lender honestly close in 30 days? What % of the time do they experience that today?
Does the buyer currently own a home and if so, have they requested payment forbearance? If any mortgage loan is currently in forbearance, the buyer cannot likely get a new loan.
Is the lender allowing e-closings? If not, how long is the current process from CD to funding?
Does the lender allow for early closing if everything is done?
If you have questions on any of these, please do not hesitate to ask.