What To Know When Buying A Home During The Pandemic
Written By: Je’Ana C.
The housing market has become significantly saturated despite the pandemic. However, it doesn’t erase the notion that there will be challenges. Home buying will likely be one of the largest purchases that you’ll make in your lifetime. Therefore, it’s essential to understand the common mistakes and obstacles that some owners will face during this time.
Based on the National Association of Realtors, predictions state that “new-home sales will jump 21 percent and existing-home sales will climb 9 percent in 2021.” Plus, home prices can rise by 3%.
Feel more confident in buying a new home! Keep reading to discover what you need to know about home buying during a pandemic. These are great tips for any individual who wants to learn more about purchasing a home, even first-time homeowners.
Related: 7 HOME DÉCOR INSPIRATIONS FOR YOUR STUDIO APARTMENT
Source: PEXELS
1) Should You Rent Or Buy A Home?
When making a big decision like becoming a homeowner, it’s essential to truly determine if you are better off renting or buying a home. The Renter Mortgage Affordability Calculator is a great tool to do just that!
More specifically, the calculator enables individuals to decide if they can rent or purchase a home based on their current rental payment. It subtracts the cost of homeowners insurance and property taxes from your rent amount to form the exact loan size (Mortage Calculators, 2021). How cool is that?
2) Overspending
The low mortgage rates in some areas this year may result in a significant amount of savings. However, it doesn’t mean buyers should purchase a higher-priced home. It’s best to follow your original budget and your heart. Please don’t just buy now because that’s what everybody else is doing. You can make the best decision by gathering all the facts and not rushing into anything.
3) Financially Secured
After you have determined how much you can afford, it’s time to make sure you are financially prepared to purchase a house. There are fees when borrowing money, interest rates, real estate costs, and more often overlooked expenses. Also, you can’t forget the down payment.
Based on Bloomberg, the average down payment for a home is at least 15%-20% which is quite a lot. I recommend saving extra money to cover these payments and because there might be a chance that you might not secure the loan amount you need due to the Covid-19 pandemic.
4) Mortgage Loans
As mentioned above, it may be more complicated than usual to secure specific types of loans.
According to Equifax, to reduce risk during the pandemic, a significant number of banks are increasing their benchmarks for mortgages. For example, a credit score of 700 is a prerequisite for some banks. To be on the safe side, you should do your research and seek recommendations from your friends & family.
5) Realtors And Brokers Are Busy & Booked
Are you wondering whether you need a realtor or a broker to buy a home? The quick answer is no and yes. They both have their advantages and disadvantages.
However, no matter what route you take, you can decide to get pre-approved before you begin house hunting. Or you might start with sourcing a broker to hunt down your dream place. It’s entirely up to you, but the group of buyers & sellers is getting crowded. As a result, realtors, lenders, and brokers be very busy.
6) Virtual House Tour
The typical house tours and open houses have entirely shifted. Right now, the process of touring a home has become more strict and conscientious for both realtors & buyers.
There are options for virtual home tours, which are becoming more common because of safety reasons. In some areas, traditional home tours are still available but are expected to follow the correct sanitary and social distancing precautions. Despite this, it’s always important to make the most out-of-house tours. They are the art of the home buying process!
Buying a home is a stressful but rewarding process. It is especially true if you’re a first-time buyer. Feel free to check out additional resources & free tools that Morgage Calculators provides; they will help you figure out the cost of ownership and mortgage payments.
Let us know if you have any advice on buying a home during a saturated housing market!