If you’d planned on buying a home for the first time, or had hoped to buy a house as an investment, the COVID-19 pandemic and subsequent recession has likely forced you to reconsider your plans. While your home-buying agenda will likely require some adjustments, there are ways to successfully carry out a home purchase in the midst of the country’s financial downturn. Ideal Wealth Grower presents a few considerations below.
Financial challenges and benefits for first-time buyers
While there may be a shortage of houses on the market during the pandemic, there is a silver lining to buying a house right now: Interest rates are still at historic lows, which will be helpful for first-time home buyers who might be facing financial challenges if rates get higher.
One potential hurdle for first-time buyers is securing a housing loan. If you’re finding difficulty getting approved for a loan based on your credit score or financial situation, you might want to consider hiring a mortgage broker to help you. Brokers have the ability to find a wider variety of lenders and will work as the middleman to take care of the finer details. Ideal Wealth Grower can help you and refer you to several lenders and brokers who offer a wide variety of lending options.
You should also look into ways to increase your savings to afford a more substantial down payment; this could involve everything from opening a savings account that you don’t touch, taking a deeper look into your budget, and investing in things like LOFTY AI, to name a few. Most importantly, if you don’t do it already, get at least 10% of your income automatically transferred into your savings/accumulation account right when it gets to your bank. Never do it at the end of the month – always at the start.
Buying a home during a pandemic may feel daunting, so keep a few tips in mind: Look in new neighborhoods that may be undiscovered by others, be flexible about closing details, and find a trusted real estate agent or turnkey provider who can help you navigate the process. Consider your mortgage options, look into mortgage options like FHA loans that don’t require a down payment, and consult trusted sources with making decisions about securing your home loan. Ideal Wealth Grower can help with all these issues.
If you’re an investment buyer, this could be a great time to look for real estate. Financial hardship has unfortunately caused many businesses to consider selling property, which could be a fortunate opportunity for an investment buyer. Struggling businesses could be in a hurry to sell commercial spaces, and commercial property owners with daunting mortgages might be ready to get out from under their debt.
However, jumping at the chance to invest just because property prices are falling could come back to bite you later. Take your time and consider your financial goals and situation before absorbing a new investment during a recession. Converting a commercial property to residential use is not easy and can take a lot of time. If you decide to look at this option, be patient and very diligent.
Looking for property
The pandemic has forced real estate companies to rethink how they sell homes. There are fewer open houses, as virtual showings have become the norm. If you’re a first-time homebuyer, it may feel daunting to look for a new house without the opportunity to view it in person. However, take advantage of virtual showings, 3D walk-throughs, and video tours to help you narrow down some options before you ask for an in-person tour.
Real estate in volatile times
The COVID-19 pandemic and economic turmoil have had major impacts on the real estate market. Construction has slowed on new builds. Property listings are at all-time highs, while at the same time interest rates remain low. Construction on new homes has seen its largest decline since the mid-80s, and permitting for new builds has also dropped, often due to issues with the supply of building materials.
Of course, if you’re moving, there are other considerations you’ll need to account for as well, such as hiring professional movers during the pandemic. If you’re moving during this uncertain time, it’s crucial that you use professionally trained movers not only for peace of mind but for your family’s safety as well.
While the pandemic and economic volatility have probably made you reconsider your buying plans, you can still achieve your goals with some patience. For first-time buyers, flexibility and guidance are key as you navigate what’s likely a limited housing market. And for investment buyers, remember to carefully consider your financial situation and the true performance of the property before over-committing to a new asset.