The spring home buying season isn’t going to be easy for Delaware and Pennsylvania home buyers. A low inventory of homes for sale has been a persistent challenge, and headwinds caused by recent economic news complicates the picture.

Home inventory is showing signs of further contraction. Some home sellers have decided to wait out the social distancing periods out of an abundance of caution.

Meanwhile, lower mortgage interest rates have spurred a record wave of refinance activity, signaling that a number of homeowners intend to stay put.

The newest challenge facing home buyers is the tightening of credit requirements by mortgage lenders. Many lenders have become skittish in recent weeks as business disruptions have cascaded into job layoffs. In an effort to reduce the odds of future loan defaults, some lenders have adjusted mortgage qualifying criteria in these areas:

  • Frequent checking of employment and income
  • Higher credit score requirements
  • Higher down payment amounts
  • Leaner debt-to-income ratios – the fewer debt obligations, the better

Overall, the bar has been raised, but the loan spigot hasn’t been shut off completely. Buyers who face the most red tape include the self-employed and those seeking a jumbo mortgage, who may face steeper requirements.

On the bright side, super-low mortgage interest rates are likely to be with us for some time. Low rates mean more home buying power for the money! Buyers may also want to think about applying tax refunds and economic stimulus funds to their down payment savings. 

We will be happy to refer you to local, trustworthy lenders who can help you prepare for your mortgage application. Contact us today!

Katina Geralis
DE and PA Real Estate Expert
eXp Realty
Homes for Sale
Visit My Website
Contact Me
Find me on Facebook