It’s become easier to close during the pandemic

Are you dreading having to close on a mortgage during the pandemic?

Closing is hard enough during normal times, with the sheer amount of paperwork, people, and money involved.

But in this case, there’s positive news for borrowers.

Lenders and mortgage authorities have made huge changes to their pre-closing requirements to allow buyers and refinancers to proceed through lockdowns.

In fact, it may be easier to close during the pandemic than ever.

In this article (Skip to…)

• Ask your mortgage lender about its process
• Changes to home appraisals
• Employment and income verification
• Remote closing during the pandemic
• Possible title issues when you close
• The bottom line: Closing on a mortgage is still possible

An appraisal is a professional opinion of your home’s value. A professional comes up with a number by comparing your home to recent sales in the area.

In a normal world, that involves the appraiser physically entering your home. That’s not ideal during this time.

So many are discontinuing home visits. Instead, appraisals may be based on:

1. Drive-by appraisals — The appraiser views your home from the curb and (by appointment) may wander around your yard and peer in some windows
2. Video tours — You show the appraiser around your home using a smartphone, tablet, or laptop
3. Desktop research — The appraiser never leaves their home. Instead, they research comparable property values in your neighborhood, look at the home’s current and past listings, and maybe check it out on Google Street View — all online

For some refinances and purchases (especially those with big down payments) it’s now possible in some circumstances to skip appraisals altogether.

Want more info about the new appraisal process? The Appraisal Foundation has an FAQ webpage that might help answer your questions.

Appraisals for renovation projects

If you need a mortgage to fund a renovation project, your loan agreement may require inspections as work reaches agreed milestones.

Only after one of these inspections can you normally receive the stage payment (or “draw”) that you probably need to move onto the next phase of your project.

During the pandemic, lenders are commonly skipping these inspections and still making payments.

However, they will almost certainly still want documented proof that the work has been completed up to standard. So you may be asked for photos, videos, and receipts from contractors and suppliers of materials.

>> Related: How to apply for a mortgage: Your documentation checklist

Unfortunately, furlough pay and unemployment income do not count toward your income for mortgage qualifying.

However, there’s one way in which documentation requirements have become easier.

Lenders generally recognize that, with many managers now working from home and lacking access to paper files, it’s not always easy to document your employment status.

So most are willing to accept a phone call or video chat with your boss or HR representative as proof you’re still in work.

If that’s not yet possible where you are, you may be able to arrange socially distanced notarization. When The Washington Post looked into this in June 2020, its readers reported their experiences.

One 75-year-old person had a notary visit her home and conduct the document finalizations on a card table in her garage. She’d planned to do so on her porch but the wind was too strong.

Another Post reader’s lender refused to supply a notary owing to COVID-19. So the borrower made an appointment with his local UPS Store. That got over one obstacle, but didn’t address social distancing. So you may want to take your own pen, fresh gloves, and a newly laundered mask along if you wish to remain as safe as possible.

Most title insurance companies, which often host closings, are implementing new COVID-19 safety measures to protect clients and staff.

And, as the Post pointed out, a “UPS Store, currency exchanges, many banks, many attorneys and accountants, and even some property managers can notarize documents for you.”

But only some can do so remotely. So, if you want to find one who does, do an online search.

And, without access to the title searches and deed filings those provide, some purchases and refinancings may stall. The industry is working to overcome this obstacle. But its response is patchy, as legal website JD Supra reported:

If you’re affected, talk with your loan officer, attorney, or real estate agent. Don’t know if you’re affected? The American Land Title Association has a searchable map on its website.

>> Related: Title insurance and owner’s title insurance explained