New Kensington Community Development Corporation (NKCDC) hosted a workshop on Nov. 21 to offer residents tips for buying a home during a pandemic.
The NKCDC provides free services related to housing issues to anyone in Philadelphia, connects members of the community with housing advisers, and offers resources to people who need assistance with an eviction or paying rent and utility bills. Along with these services, NKCDC has offered a series of free webinars on housing topics.
Joe Filipski, associate director of housing services and compliance officer for NKCDC, stressed the value of free resources and information sessions for navigating large life decisions during the pandemic.
“It’s a time to come together, to offer resources, and to push on so that the people of New Kensington and surrounding areas can make informed decisions moving forward,” he said.
NKCDC is hosting two more Saturday homebuyer webinars this year on Dec. 12 and Dec. 19. Prospective buyers interested in attending can register online.
This webinar featured a real estate agent and a lender, and offered time for the attendees to have their questions answered.
Gregory Boler, a local real estate agent for ReMax Affiliates, shed a light on beginning the homebuying process amid COVID-19 restrictions.
“Purchasing a home is one of the biggest expenses that anyone is going to have in their lifetime, and it’s very involved,” he said. “It’s really critical that a person understands the process so that they can make an educated decision.”
Potential buyers should know their finances well enough to have a good idea of what they can afford.
“Most of the time, residents are using financing plans,” he said. “That starts with identifying what your credit-to-income ratio is.”
Boler suggested prospective homebuyers determine their purchasing power first, since they will have to either finance or pay cash. Buying a house that is too expensive can put an individual in a tough financial position for a long time.
“A mortgage can go 15 to 30 years, and if you end up being in a bad situation, that’s a lot of money for you to put out over time,” he said.
Stacey Harrison, a loan officer for Meridian Mortgage, discussed how loans work, specifically during the pandemic.
“Banks are really tightening up right now because of the pandemic,” Harrison said. “They’re lending you hundreds of thousands of dollars, and they want to make sure that you can afford to pay this money back.”
Getting a head start on financing by seeking a preapproval is one of the most important things a buyer can do, Boler said.
“It’s important because you can go out and look at a property and actually like it, and think it looks nice, but then you have to go and qualify for a mortgage, which might take you two weeks to a month,” he said. “By the time you come back, that property might be gone,”
Harrison agreed with Boler’s suggestion to get preapproved.
“A real estate agent is going to deny you unless you’re preapproved,” Harrison said. “They don’t want you to waste their time. They’re not going to show you a house that they have listed and you can’t afford in that area.”
Boler said the housing market is currently a seller’s market, with more buyers than properties available.
“Even with preapproval, it can still be difficult to get the property you want,” Boler said.
In addition to being a real estate agent, Boler is an accredited buyer’s representative (ABR), who works directly with buyer-clients at every stage of the homebuying process. Boler suggested buyers seek out a real estate agent to represent their interest during all parts of the home buying process.
“Your ABR has your best interest,” Boler said. “They can help you negotiate on the prices so that you are able to get a property for a lesser price, if possible.”
Boler encourages everyone to have someone representing them throughout this process, as experts can help buyers navigate unexpected situations.
“It’s really great to have someone representing you,” Boler said. “It’s kind of like going to court and not having your own lawyer. If you have no representation, it’s hard to win the case.”
Buyer’s representatives are usually paid out of the seller’s fees at the end of a home sale.
“A buyer’s representative doesn’t cost you anything,” Boyer said. ”Someone is going to be there for you with anything from the beginning to the end, and COVID-19 doesn’t stop that.”
Harrison said banks and loan officers are also going to work hard to know everything they can about a client’s finances as they apply for a mortgage.
“I like to have in-depth conversations with you about that process when we talk,” she said.
“I’m going to be all in your business and I ask that you be open with me, even if your finances aren’t great due to the pandemic.”
The mortgage approval process can run for a long time and generate a lot of stress for buyers, Harrison said.
“For the next 40-45 days, I’m going to be your best friend,” Harrison said. “We need to be open and honest with each other, because you can ultimately kill your own deal if you don’t inform me of everything. I tell people all the time, tell me everything so I know how to address or structure your deal.”
Because the pandemic may cause a person to lose or change jobs, their mortgage eligibility may also change. Many lenders are not comfortable lending to a person unless they have been in their current job for two years or more, Harrison said.
“If you have been a truck driver for three or four years, and you say you’re tired of it and change to being a cook, that’s a total change of a job,” she said. “Because you’re not in the same line of work, now I’m going to say you have to be a cook for two years before you can qualify.”
Because many people have also faced difficulty paying their rent in recent months, one attendee asked Harrison if it would be detrimental if their rent payments have been late due to COVID-19.
“It depends,” she said. “If your landlord says you pay your rent on time, then you’re fine. If your landlord says you’re late, you have a problem. You really want to make sure that your landlord states that in the past 12 months, you have been on top of your rent.”
For students who need to pay off student loans, Harrison reminded attendees that everyone’s student loans are deferred right now due to COVID-19.
“Come January, we will need to start making payments again,” she said. “That will have to be included into your debt ratio. They want to make sure that you’ll pay both your mortgage and your student loans back.”
Lenders, real estate agents, sellers, and buyers can potentially navigate the home sale without ever meeting face-to-face. Usually, buying a home includes many in-person meetings, which are easy to conduct virtually, Boler said.
“COVID-19 doesn’t change much,” he said. “Because the meetings that otherwise would’ve happened in person can still happen online.”
Harrison encouraged the webinar attendees to be open and honest with their loan officer and real estate agent since they have the expertise and want to help.
“Even though it’s a seller’s market, we are here to help you in your endeavors,” she said. “The pandemic won’t stop houses from going on the market.”
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