ExecutiveChronicles | COVID and Home Buying: Should You Buy? | It may seem counterintuitive but the COVID-19 pandemic, which is infamous for forcing everyone to stay at home to stay safe, is one of the reasons you should start investing in your first home.
In the middle of this pandemic, it’s natural to be hesitant due to the uncertainties with the economy. Because of the pandemic, however, you have a greater chance of buying a house at more affordable payment terms or a much lower price. So before you start shopping for affordable mortgage rates , consider what the real estate market has to offer.
The Best Time to Buy a Home
It’s the best time for home sellers because plenty of people are looking to buy, wanting to move due to COVID-19. But housing supply is low. And if current home sales data is anything to go by, it’s that the 23 percent increase in sales means home buying activity is likely to continue. Clearly, many seem to think it is a good time to buy a home.
The question is should you?
Now could be the best time to buy your starter home or new home if you have sufficient funds. Interest rates are still pretty low. In 2020, the average rate for a 30-year mortgage fell below 3 percent, setting a new record low at the time. Some mortgage lenders even quoted their rates at 2.75 for top-tier buyers.
In early 2021, the mortgage rate fell to 2.73 percent. Current figures are still below 3 percent, and experts predict the rate will stay low within the second quarter of the year. This means you could afford the home you’re eyeing.
If you have the funds for a considerable down payment and your employment situation is stable, now would be a good time for you to look at some properties. Because apart from the still-low mortgage rates, property prices could move up when the U.S. economy bounces back from the effects of COVID-19.
Another key consideration to your decision is your credit standing. Do you have a good credit score?
If your score is within the 580-620 range, you’re likely to get better rates. The higher the score, the better rates you’ll get. If your score is well below that range, you may have a difficult time with your mortgage. You may also be subject to tighter lending standards.
You also need to look at your finances, including savings and debts. It may not be a good idea to make a big property purchase if you’re still paying off a substantial loan. You’ll also want to look at your expenses. Instead of upgrading your car or splurging on a designer bag, new phone or getting the most expensive Starbucks drink every day, use your savings to pay for the down payment of your new house.
Buying Your Home Amid COVID-19
Some aspects of the home buying process have changed due to the virus. Social distancing measures are still being observed, and so you may do a home viewing remotely. Real estate agents will host Zoom calls or provide a virtual tour of the property you’re looking to buy. Your application may even be done online.
You could even buy a house without having been on-site. But this is not always advisable since you may not be able to spot problems with the property. if you’re truly squeamish about leaving the house, get an appraiser or home inspector to evaluate the home. This way. you’ll know if the home needs repairs or if some problems call for a lower price on the property.
What has not changed is the need to go through a pre-approval process for your mortgage. You want to make sure you’ll get approved for a loan before you start putting in offers. Although the pre-approval doesn’t guarantee the lender will work with you, it does tell you if you’ll qualify for a loan.