The pandemic has put a lot of plans on hold. For home buyers, it’s natural to think twice about purchasing a new home because of economic uncertainties. Mortgage applications have sunk to the lowest level during this crisis and demand for real estate has increased, but the prices have more or less stayed the same or plummeted. This means you have a greater chance of purchasing a home at a more affordable price.
Is it a Good Time to Buy a Home?
For home sellers and commercial and residential estate agents, this is also an opportunity because many are looking to move to a new property due to the pandemic. Some areas have a low housing supply, meanwhile, data shows that there’s a 23 percent increase in property sales. This tells us that many buyers think purchasing a home now is a good move.
So should you do it?
House hunting when your region or the entire country is shut down can be beneficial. There’s less competition which means sellers may become more flexible in setting the final price. Begin your search online. If you have the time, do your research more thoroughly as this might give you an advantage in finding the house you want that’s within your budget.
If you have the funds, now could be the best time to buy a new place. Mortgage interest rates should be low. In 2020, the average fixed rate averaged 3.6 percent, which is the lowest ever recorded since 1973.
Keep in mind that your budget is important in determining whether you should move or not. As a rule of thumb, your monthly mortgage should not exceed 30 percent of your annual income. This is important to note because as mortgage rates continue to plummet, you may be tempted to go for a house that’s more than you can afford at the moment.
Check Your Credit Standing
When you find your dream house, you’ll want to come off as a serious buyer. You have to ensure that you have a good credit score. For example, a score of 620 will qualify you for a conventional mortgage with lower interest rates. Any higher than that would be even better.
After checking that you have a good credit score you can get pre-approved for a mortgage, provided that you have all the information and requirements your lender needs. Mortgage pre-approval is a document from a lender that states how much you can borrow, and the interest rate that comes with it.
Note that when getting a mortgage, get at least three quotes before you choose which one to use. This will help you save money, at the same time, if anything goes wrong with one lender, you’ll have a fallback and another connection already formed to finance the deal.
Research the Market
Take time to research the locations where you want to move. Pay attention to the home values and average selling price of homes in that area, especially for homes that are similar to the type that you want to purchase. Also, make sure that you’re moving in a safe and secure environment.
Buying a home during the pandemic is made easier. If you’re not comfortable going out or flying to the property location, real estate agents can now host video calls to provide a virtual tour of the property you’re interested in. Thanks to technology, you could even seal the deal online without visiting the location physically.
Although it’s still advisable to visit the property yourself. If you can’t, then you can get a home inspector to check and evaluate the property for you. This way, you’ll be privy to details like issues, repairs, and other changes that need to be done before moving in. This will allow you to negotiate better.
Be Disciplined When Buying a Home
Even though investing in real estate has a lot of benefits, be cautious and conscious about your finances. A general rule you can use when buying a property is to have the price of your home be no more than 3x your annual earning. So if you earn $200,000 a year, then you can afford up to a $600,000 home.
Most importantly, buy a property you love. This way, if the property diminishes in value, then it won’t matter because you have enjoyed living in that home and have made some great memories in it.