Everything You Need To Know Before Buying A Home During The Pandemic
June 4, 2021
According to a recent report by the National Association of Realtors – home sales hit the highest point since 2006 during the pandemic.
Does that mean it is the right time to buy a house? Plenty of experts say it is. In fact, we recently shared a blog post explaining why it is the best time to buy a house now!
In this post, we will talk about all the aspects that you must consider before buying a home during the pandemic.
There’s A Lot of Competition
As the numbers suggest, more people are buying homes than ever in the recent past. This means that there is a lot of competition in the market. In typical real estate language, the inventory is low and demand is high, which means it is an extreme seller’s market.
Therefore, don’t be surprised to see your offer get overpowered by an all-cash offer.
Mortgage rates are at record lows. Does that mean buying a home is less expensive?
There is no denying that mortgage rates are at their record lowest, which means it is the best time to secure a home loan. However, this also means that more people are looking to secure a loan and buy a home. Therefore, it has become a lot harder to secure a loan.
Add to it the economic instability that the pandemic has brought and you will see that getting a loan as a first-time homebuyer has become as hard as it can get unless you have a good credit score, and a stable income source.
After all, just like mortgage rates, unemployment is also at really high making it harder to convince lenders to shun their cash out.
Low Debt to Income Ratio Has Become a Prime Lending Factor
There is economic uncertainty in the market, and lenders don’t want to risk their money. Therefore, the first thing they look for is the borrower’s capacity to pay their money back. This is where your debt to income ratio comes into the picture.
Your debt to income ratio signifies how financially stable you are. Your chances of securing a home loan are much higher if you have been able to maintain a low debt to income ratio.
Larger Down Payments Help Your Chances With Loans
As already stated, the market is unstable and lenders are looking to minimize the risk with their money. This is the reason they are looking for people who are willing to make bigger down payments, which means a lesser principal amount for the loan.
Your Financially Stability Matters
The most important thing that matters right now is how stable you are financially. If you have a steady income stream and have planned your finances well, then managing all this should not be a problem. However, if you are struggling to maintain a steady source of income, then you must wait a while before buying your dream home.
Get Expert Advice Before Taking Any Steps
If you are confused about whether you should move ahead with buying a home or not, then I’d recommend getting in touch with an experienced real estate agent.
They know the market Real estate market is very dynamic. A real estate agent with all of their experience can answer questions about market conditions, price variations, and other similar factors that play a vital role in the decision to buy a home.
They can assess the risks
Secondly, a real estate agent is better at assessing the risks involved with buying a home based on your financial conditions, which is very important. Based on the information you provide, they can assess whether it’s possible for you to secure a loan.
They can get you the best deal
And if everything seems just fine, they can easily find your dream home. A sincere real estate agent, using their skill, contacts and experience in the industry, can find exactly what you were looking for.
On A Concluding Note
The decision to buy a home, especially right now, depends largely upon how stable your financial health is. It also depends upon how you see your financial health growing, or at least remaining stable, in the coming times. If you are contemplating buying a home, make a thorough evaluation and assessment of all of these factors to make a risk-free decision.
And if you need any help in your home buying process, it is recommended that you get in touch with an NRP or a Negotiator Recognized Partner. An NRP brings experience, expertise, and thorough knowledge of the real estate market to help you find your dream home. They can even negotiate on your behalf to get you the best price for your home.
All the best!