We are in times of uncertainties because of COVID-19 crisis. Here are six tips to help you learn whether is now a good time to buy a house.
While buying a home with all the coronavirus restrictions obviously isn’t ideal, it certainly is possible. However, before you start the process, there are some things you should know.
Check out this guide to discover the top tips for buying a home during COVID-19.
- Make Sure You Have Enough Money Saved
While you obviously need to have a decent amount of money saved for buying a home in any circumstance, it’s especially important that you have ample money set aside during this time.
It’s no secret that people are losing their jobs left and right, and the number of people filing for unemployment is at an all-time high. Although your job may be safe now, you never know what your situation is going to be in a few months.
Therefore, it’s very important to make sure that you have enough money saved to afford a house. While down payments usually range from 3% to 25%, during this time, we suggest having at least 20% saved for the downpayment.
Additionally, you should also have 4 to 6% saved for closing costs, as well as enough money set aside to cover 3 to 6 months of living expenses in case your situation changes.
- Understand That Mortgage Rates are Fluctuating
Before buying a home, it’s also important to understand that mortgage rates are changing frequently due to the coronavirus.
The Federal Reserve has twice lowered its rates since 2020, which has caused interest rates to drop on everything from savings accounts to credit cards. So, this means mortgage rates should be lower too, right?
While there’s often correlation, the federal fund rates on mortgages aren’t as cut and dry. Rather, mortgage rates rely heavily on demand. For example, in early March, mortgage rates were low and lenders were flooded with refinancing applications.
Generally speaking, when the economy is struggling, mortgage rates tend to fall. However, we’re currently experiencing an unprecedented situation, and because of this, rates are constantly changing due to a volatile market.
So, while rates are increasing one day, they may be decreasing by the next.
- Start the Process as Early as Possible
During this time, the home buying journey is taking longer than normal. If you don’t get a jump-start, you could end up waiting around for a while.
In addition to lenders being overwhelmed with refinancing applications, many companies’ employees are now working from home, which can affect the ability for things to move along quickly.
Due to social distancing, things are being slowed down every step of the way. Take, for example, the appraisal. In order to perform an appraisal, the appraiser physically needs to go to the house.
If the home they’re requested to go to is in quarantine, this could vastly slow down the process. If you’re hoping to buy and move into a home by a certain date, we recommend contacting a lender and a real estate agent as early as possible so you can get the ball rolling.
- Request Virtual Tours and Videos
In order to prevent the spread of the infection, the majority of companies have canceled open houses and private showings. Thankfully, you don’t just have to rely on online photos to decide if a home is for you.
Thanks to technology, you can now take digital tours and even virtual reality tours. Your agent can hop on the tour with you and do a live chat, which essentially allows you to get a walkthrough of the home just as you would in-person.
This type of technology has been in place for a few years, and it’s becoming more and more reliable as time goes on. Therefore, you can rest easy knowing you’re getting a good idea of what the home actually looks like before seeing it in person.
- Find a Broker Who Takes the Coronavirus Seriously
If you’ve been keeping up with the news, then you know that there are still people out there who are not taking the coronavirus seriously, despite what medical experts are saying.
You shouldn’t put your health at risk for the sake of buying a home, and therefore, it’s very important to find a real estate broker who is taking the coronavirus seriously. Ideally, you want to find a broker who is equipped to provide you with digital and virtual tours of the home.
Additionally, before hiring a broker, you want to make sure to ask them what precautions they’re taking in their workplace to prevent the spread of the virus. Hopefully, they’ll inform you that all agents are working from home and that the homes they show in person have been thoroughly cleaned ahead of time.
- You Can Still Hire Movers
Many people looking to buy a home during this time are concerned about how they’re going to get their possessions from their old home to their new home.
Well, we’ve got good news for you – moving companies are still open for business during this time. However, make sure you diligently vet several moving companies before hiring one. And, just as you should with your real estate agent, make sure to ask companies before hiring what extra measures they’re taking to stop the spread of the virus.
In addition to moving companies still being open, house closings are also still getting the green light. But, rest assured that extra precautions are being taken and you won’t need to bunch up in a conference room to close the deal.
Additionally, home building companies, such as Builders Gympie, are still open at this time.
Is Now a Good Time to Buy a House? Buying a House During COVID-19
So, is now a good time to buy a house? As you can see, the timing definitely isn’t ideal and there are some extra hurdles you’ll need to jump through in order to make things happen.
However, if you need to move, then buying a new home is still definitely possible during this time.
Be sure to check back in with our blog for more home buying news and tips.