Overcoming Financial Hardship to Buy a Home

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Almost everyone was happy to see 2020 come to an end but, unfortunately, the pandemic continues.

For people who suffered from unemployment, reduced wages or lost commission income, the financial impact of covid-19 could linger even after the virus is under control. Renters who had planned to become homeowners can still work toward fulfilling their aspirations.

“Millions of Americans, through no fault of their own, found themselves experiencing financial insecurity in 2020 due to the pandemic,” Tai Christensen, director of government affairs at CBC Mortgage Agency in South Jordan, Utah, wrote in an email. “For those who have recovered and regained job security, the financial setbacks from last year need not be a hindrance to a real estate purchase in 2021.”
But Christensen points out that prospective buyers will face some additional challenges and need to be prepared for homeownership.

Mortgage lenders understand that many people were hurt financially by the pandemic, Paul Buege, president and chief operating officer of Inlanta Mortgage in Pewaukee, Wis., wrote in an email.

Buege and Christensen suggest the following steps:

· Contact a loan officer: Buege recommends consulting a loan officer for individualized advice to overcome financial challenges. “For example, the loan officer might advise that you need to save more for a down payment, pay off some debt or wait to apply for a home loan until you have been back at work for a specific period of time,” wrote Buege. “In some cases, that could mean purchasing a home a little bit later than you anticipated. There may be loan options that would help you qualify right away, but your loan adviser could guide you toward a more financially sound option if you are willing to wait and put in some work to qualify for that program in the future.”

· Contact a loan officer: Buege recommends consulting a loan officer for individualized advice to overcome financial challenges. “For example, the loan officer might advise that you need to save more for a down payment, pay off some debt or wait to apply for a home loan until you have been back at work for a specific period of time,” wrote Buege. “In some cases, that could mean purchasing a home a little bit later than you anticipated. There may be loan options that would help you qualify right away, but your loan adviser could guide you toward a more financially sound option if you are willing to wait and put in some work to qualify for that program in the future.”

· Check out down payment assistance options: Most states have housing finance agencies that offer special loan programs and down payment assistance to borrowers with low to moderate incomes, wrote Buege. These programs typically have income and other financial requirements. A national option is the Chenoa Fund Program, wrote Christensen. Your mortgage lender can provide more information about state and local programs.

While you must be fully employed and have the income and credit to qualify for a home purchase, a lender can help you prepare for homeownership and identify potential sources to overcome a savings deficit or other challenges to homeownership.

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