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Getting a Mortgage Approval in a Pandemic-Era Economy

The threat of the COVID-19 pandemic still endures and has practically made many businesses and establishments grind to a halt, including the home buying market. Throughout the year 2020, home inventory was down across the country, although lower mortgage rates have sparked many people’s interest in buying a house.

The question is, “what changed in the mortgage application process ever since the pandemic and the lockdowns started?”

Pre-Pandemic Mortgage Applications

Whether you’re applying for a conventional mortgage, FHA loan, or a jumbo loan, the pre-approval stage is still the standard starting point when buying a house. 

The purpose of pre-approvals is to confirm your income and ability to pay for your mortgage. You need to provide two years’ worth of tax returns and proof that you have an income-generating business in operation. The lender will also examine your credit score and debt-to-income ratio.

Post-Pandemic Mortgage Lending Changes

Now that lockdowns have been in place due to the pandemic, mortgage approvals are slightly different from before. For freelancers, documentation requirements have significantly become more stringent. 

Lenders have made operational changes in their policies and requirements to protect themselves against losses in the pandemic-era economy. You need to present more proof of your ability to repay the loan, including year-to-date profit and loss statements as well as other supporting documents. They’ve also raised the minimum credit score and down payment requirements for mortgage applications.

Getting a Mortgage During the Pandemic

As large parts of the home buying market start to resume operations and open up their services, you need to take a few steps to make sure you get a good deal on your mortgage.

1. Thoroughly compare mortgage rates between lenders.

Mortgage rates vary significantly; that’s why it’s essential to reach out to various lenders from big banks or regional banks. You should also hire a mortgage broker you can trust to work on your behalf to walk you through the long and arduous process of finding the right lender.

2. Reach out to a local banker.

Establishing good relationships with a local banker can be of great help to your mortgage hunt. It can offer more leverage than the usual big-name banks out there. 

3. Boost your credit utilization ratio.

Paying off your debt is a good step in improving your credit score, but what’s even better is to have a low credit utilization ratio. Take advantage of credit cards with a reasonably low outstanding balance but has a high credit limit. This can work well in giving you a lower credit utilization ratio.

4. Seek recommendations from fellow homebuyers and financial institutions.

Asking around can help you find better options when looking for a lender. Fellow homebuyers who’ve made successful deals on their houses can provide great insight. Check with your financial institution if they’ve heard of good home deals. Law firms, banks, and even employers are also great resources for homebuyers.


Mortgage lenders are still making loans, but they’ve made significant adjustments in their lending standards because of the market’s unpredictability. Because of the coronavirus pandemic, many borrowers are under a lot of financial stress. As a homebuyer seeking the best possible deal for a house, it’s best to work with someone to guide you through the changes in the lending process.

Finding a housing loan institution you can trust in the economy’s current state has never been more critical. That’s precisely why America’s Mortgage Solutions is here to help. We turn first-time homebuyers into lifetime clients by showing you the ropes on how to get a loan. Contact us and get pre-approved today!