How to navigate the mortgage process during COVID-19
Over the last few months, we’ve seen our world transform at the hands of a global pandemic. We’re living in very different times where meeting face-to-face isn’t really an option. Despite the new reality, the priority of taking care of our personal finances is one thing that hasn’t changed.
When it comes to getting a mortgage, there’s no shortage of demand right now. In addition to those looking to refinance or switch to the very low rates available, there are many Canadians who purchased homes before the pandemic who are looking to get approved. Further, the real estate market is beginning to heat up again, therefore mortgage demand is expected to rise even further. The good news is that despite the current situation, there are great options available to apply for a mortgage without having to leave your home.
In the face of COVID-19, operations and procedures across the mortgage industry have been forced to adapt and do business virtually. With many large financial institutions not exactly built for online, this has lowered efficiencies and increased wait times for many customers. Traditional brokers are also facing this dilemma. Many of them don’t have the infrastructure to facilitate the mortgage process outside of their offices, which has prompted a shift toward mortgage technology companies. For example, we have seen a 400-per-cent increase in site visits over the last three months.
Mortgage tech companies are a popular choice and have been resilient because they were already built to streamline the process digitally, while still having advisors to support clients throughout the process. People are looking for contactless options and these companies have been able to deliver an efficient way to get a mortgage without delays, and often get a better product than they would get with more traditional solutions.
Regardless of the route you choose, here are a few things to keep in mind if you plan to refinance, switch or apply for a new mortgage during this time:
1 – Looking to buy a home soon?
Get pre-approved. All this extra time on our hands has many people reassessing their personal finances and starting to plan for the future. There’s been a massive uptick in people getting pre-approved; it’s an important step and allows prospective buyers to search for a home with confidence, understand what they can afford and lock in a mortgage. To get pre-approved, contact a broker, call your bank or apply online with a digital mortgage company.
2 – Prepare your documents in advance.
Whether you’re looking to refinance, switch or apply for a mortgage, you’ll need to have the right documents on hand. Get a head start and organize all your paperwork to speed up the process later on.
3 – Shop lenders for the best mortgage.
Going from one bank to the next to find the best mortgage isn’t something you can easily do right now. So, one of the best ways you can shop around is to either call a broker or use a digital mortgage company. What’s great about these companies is that they’ll do the shopping for you, so you can find the best mortgage option without having to leave your home.
4 – Expect lenders to be tighter.
The financial downturn caused by COVID-19 alongside the heavy increase of unemployment has led many lenders to be slightly tougher about the application process. Finding an unbiased mortgage advisor will put you on the right path from the start. They’ll give you a full picture of the mortgage options and lenders available so you’re not out there spinning your wheels to get approved.
5 – How to close.
If you’re going to go digital with your mortgage, why not bring the rest of the process online? Regardless of what you’re applying for, you’ll need property insurance and a real estate lawyer for new purchases. Sonnet Insurance allows you to get multiple quotes and buy property insurance online, while Deeded facilitates the entire legal process through video chat. Both of these options are especially helpful in an era of social distancing, enabling you to do everything online from your own home.
The current conditions have really emphasized the advantages of tech companies and how they’ve changed the marketplace, especially when it comes to navigating the mortgage process. They are fully equipped to deliver services virtually and efficiently, helping you find the best mortgage and save money over the long term.
In the end, it’s important to know that there are solutions available and that you don’t have to worry about social distancing restrictions keeping you from getting the best mortgage for your needs.
Jesse Abrams is Co-Founder at Homewise, a mortgage advisory and brokerage firm based in Toronto. thinkhomewise.com