Financial advisor: Mortage rates low but qualifying for a loan may be tougher
NEW ORLEANS, La. (WVUE) - If you're planning to relocate or move, financial advisors say, now's the time to do it.
“Real estate is going to be very good,” financial advisor Mike Martinez said. “If you’re buying another home, the home you’re using, you can use it as a bridge to purchase another one and when you sell yours the money goes to the bank.”
Mortgage lenders say they're seeing lower rates which, in turn, increases affordability for buyers.
Yet, advisors say some lenders are tightening up on their requirements for those looking to qualify for a loan.
“A lot of these mortgage companies are already changing their criteria, raising the credit rating up, increasing the down payments. And this is all to protect themselves from making sure they don’t have a lot of defaults,” Martinez explained.
NOLA Lending New Orleans Area Manager Ryan Thomassie says qualification criteria may have changed slightly, but it's nothing drastic.
“The main concern is the employment,” Thomassie said. “Having a firm job, having income is a major part of the qualification process and that’s something that we have to verify up until the day of closing.”
Thomassie says, right now, employment is the greatest obstacle for potential borrowers affected by the COVID-19 crisis.
"Someone who's, unfortunately, been furloughed or temporarily laid off," Thomassie said.
Aside from what is an insurmountable hurdle for some, Thomassie says the market is strong.
“If you’re qualified six months ago and didn’t purchase a house then, and you want to get pre-qualified again or start looking at homes, chances are, as long as you’re still employed, we shouldn’t have any issues getting you qualified and helping you get into a home,” explained Thomassie. “We are still seeing lots of people wanting to get pre-qualified and you do not need an 800 credit score to get qualified for a mortgage right now.”
RE/MAX Real Estate Agent Kelly Trail agrees it's a good time to buy.
"There's no doubt, but you're not going to get fire sale prices. If that's what you're looking for, you'll be disappointed, which is good for our market because it keeps the values up," said Trail.
Trail says she recently turned down an out-of-towner for an offer 25-percent below asking price.
"People that have that money, they are going to buy whenever and, right now, they think it's an opportunity to buy," Trail said.
Trail says serious buyers can find the right home, as long as they are able to rely on virtual tours and, likely, put more trust in their realtors.
"It's a little scarier for people, especially if they're unfamiliar with the market, to put a contract on a property they haven't seen. But, in my years, I've done that with several buyers when I found a house like, 'You need to write a contract on it now because it will go,' and they say, 'I haven't even seen it,' and I say, 'it doesn't matter, you're going to want it,'" explained Trail.
Trail says it’s slower than normal for sellers but tells FOX 8 more and more people are feeling comfortable putting their houses up for sale. She says she was even surprised to see high-dollar market homes-- $700,000 to $800,000 homes-- are still selling.
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