With all the economic uncertainty brought on by the coronavirus pandemic, you may be thinking that now is not the time to make a major purchase, such as a house. In fact, it might be a great time to buy a house, provided you are financially stable and can qualify for a mortgage.
Reasons to Buy Now
Some people were planning to move by a specific date and still have to do so. With the coronavirus all over the news, some prospective buyers are postponing their home purchases. Homeowners who still need to sell may lower their asking prices significantly to entice buyers. That means you might be able to purchase a house at a deep discount.
The Federal Reserve recently cut interest rates, which led to lower mortgage rates. You might be able to buy the house you want and have lower monthly payments than you would have before the rate cut, or you might be able to buy a better and more expensive house and still stick to your budget.
Only Buy a House Now if You are Financially Secure
There is a lot of uncertainty now when it comes to employment and the economy in general. Think about the type of work you do, whether your position is essential and how your company or agency is likely to weather the current economic turmoil. If you have reason to believe that your job and income won’t be affected by COVID-19—and if the same holds true for your spouse, if you are married—then purchasing a home now could make sense.
Get Pre-Approved for a Mortgage
Getting a mortgage pre-approval before you begin looking for a house can let you know how much you can afford and show a seller that you are a serious buyer. If there are any problems with your financial situation, it’s better to find out and deal with them before you start house hunting than to miss out on your dream home later because you can’t qualify for a loan.
Given the current state of the economy, mortgage lenders need to be particularly cautious when deciding which loan applications to approve. You may have to meet stricter loan criteria and make a larger down payment than you would have before the pandemic. Get your credit score up, lower your debt-to-income ratio and make sure you have enough funds available for a down payment before you apply for a loan.
Discuss Local Conditions With Your Real Estate Agent
Some sellers have taken their homes off the market temporarily or decided to hold off on listing them. Due to concerns about spreading the coronavirus, many real estate agents are offering virtual home tours instead of in-person showings. Virus-related closures have led to delays in home inspections and appraisals. Closings can be done virtually in some locations, but not others. Your real estate agent can give you more information on how the coronavirus has affected inventory and the home-buying process in your area.