All of us somewhere have been working day and night and do savings for a home of our own by paying off the loans, focusing on raising the good credit score, and cutting down on many expenses. For all of us, homeownership will be the single best financial achievement that we have achieved. Homeownership will enhance the quality of life, and now that many of us are working straight from our homes and extending our families, it can seem extremely attractive. But now the times are changed as we all know that the world is undergoing drastic changes. Due to the coronavirus pandemic, many dreams feel like they are out of reach, but if you considering buying a home in the time of Covid-19, here are some things that you all need to check out.
Without wasting any more time, let’s start with the first one.
Increase in competition and high home prices in the market
Although real estate is still in high demand for buying a home in covid-19, sellers are very much hesitant to hold their own houses in the market due to facing a global pandemic. This results in increasing the competition for potential buyers, and purchases get affected. The pandemic has resulted in an unexpected seller’s market, increasing with demand and increasing the supply. So you, as the buyer, will have to pay a premium to fulfill your desire for the dream home, but you will still take the benefits of low-interest rates in this situation.
The real estate market is not losing momentum during the current economic crisis. According to a recent survey of many states, different lenders say that they saw the highest number of mortgage applications in the past 11 to 12 years, and the prices of homes are rising continuously.
Factors attributed to the rise in home prices
The rise in home prices will be attributed to several different factors:
- The low-interest rates on the mortgages are motivating customers to the real estate market.
- The number of buyers searching for the homes in the previous year when the pandemic hit put their search for a home on hold.
- At the same time, when buyers put the search on hold and pandemic hits the world, many sellers are doubtful and feared to put the homes on the real estate housing market.
- Now the situation is coming to normal, and the pandemic is slowing down, seasonal demand starts to increase, buyers searching for a home and are on hold are back on the stalk.
- New buyers who want a bigger home for extending families and home offices are also in high demand and present in the market.
- As the demand is increasing day by day, the supply is also starting to rise. Competition is getting higher, which results in high prices.
Overall financial health planning
You will have all the information about your whole credit, and you have a proper plan related to paying off all your debt. You will also analyze your money spending habits. Your financial stability and what your entire finance looks like is the next part of the puzzle. Buying a home in the time of covid -19 is possible now if you have better waited for long until you have a pretty good financial portfolio, and the competition in the real estate market slows down.
Encouragement of home buying with low-interest rates
The real estate market will not be taken the hit that some of us expected to sell the properties faster than ever when considering the last recession homes. That means this will be a good and best time for a reasonable investment, with interest rates wavering at record lows. So, in that case, for many, low prices mean that buying a home is within their range and reach.
Lenders will be asking for more significant down payments
One of the Covid-19 financial side effects is that it will be more challenging to get a mortgage for a home, and you have to put down more money for this. Banks are continuously searching for possible ways to lower the risk of instability worldwide and unemployment rates. The one possible way in today’s time to do this is to raise down payments.
Here are a few factors that lenders will look for when evaluating loan applications that have in your knowledge to put them under consideration.
- Credit score:
To decide the terms and conditions of the mortgage and interest rates, lenders test your creditworthiness, and the credit score of yours plays a major role in your loan qualification.
- Loan principle
The amount of loan principal that you borrow from the lender will also be less.
- Low debt-to-income ratio
The borrowers with low debt-to-income ratios will have more chances of qualifying and getting lower interest rates.
- A large amount of down payment
If you put down a high amount of money, the less will also be less to you.
So now, it depends upon your priorities. It is possible to make the best financial decision. Besides financial, it is also the best emotional and physical decision to buy a home for yourself or your family. However, if you ever realize that buying a home now with your good debt will suppress your other goals. Then please do wait for some time. Buying a home in the time of covid-19 is a huge decision. So wait for the right time and right moment, and when you find it right, then go for it.
For expert guidance and opinion, contact Aceland Mortgage.