People who are under contract on a new home who qualified for a loan a month ago may not qualify anymore. Lenders are tightening their belts due to the uncertainties brought on by the Coronavirus pandemic.
"The close is never closed until we’re there," said Jessica Lentz with Colorado Realty Pros.
Lentz is warning her clients about the shift in the real estate market.
"What I’ve been doing with my clients who are currently under contract is we’re checking in with the lender on a daily basis to make sure that their product hasn’t changed," Lentz explained.
In some cases the product is indeed changing. That's especially true when it comes to VA loans and FHA loans.
"I had lenders who were doing 550 credit scores last week," explained mortgage broker D.J. Robbins. "Now they’re coming in and they’re increasing those credit scores."
Some homebuyers are suddenly learning they don't qualify for their original loan just days before their scheduled closings.
"Things are changing daily," said Jonathan Payne with American Financing. "Guidelines for people who did qualify at one time might have changed. The best thing is to call in and talk to us."
A good realtor plays a big role in times like this too.
"Each one of my lenders has at least three other pivots that we can make and make quickly," Lentz said . Having a backup plan is paramount right now."
Coronavirus fears are also spooking some sellers.
According to a new report by the Denver Metro Association of Realtors, an astronomical 761 home sellers withdrew their homes from the metro Denver real estate market in March. The report sites fears of people possibly contaminating a home during a showing. Experts believe it was also due to concerns over jobs and the economy.
Area realtors aren't panicking.
"What we believe is that this are going to be temporary," said realtor John Harding. "if we can't buy or sell right now we're going see a surge after this passes."
As of now, the market still seems ripe for the taking but Interest rates are becoming more volatile now.
