When COVID-19 hit the world, we all were forced to adapt to the “new normal”. Each and every single industry was impacted by this pandemic, and the real estate industry was one of them.
Of course, people who had dreamed of buying a new house, even before the pandemic, had to deal with the changes in the real estate market while some people thought it was a great opportunity to avail themselves of the lower mortgage rates and buy a new house.
There’s no doubt that this pandemic has made everyone witness the importance and involvement of digital technology.
For instance, AI mortgage technology is used by websites like Home Lending Pal which makes it super convenient for both lenders and buyers to find a mortgage deal that best matches their preference right at their fingertips.
However, buying a new home in COVID-19 can be a bit tricky and confusing for some, especially the first-timers. Not only do the rates keep changing every hour of the day, but also the procedure to purchase a home has also been tweaked significantly due to the pandemic.
Even if you had a home-buying experience a decade ago, and you may think that you know it all, you need to rethink this. Therefore, this article will shed light on the important things to consider when buying a new home in COVID-19 to make sure you are already well-prepared. Keep reading!
1. Consider the Finances for Buying Your Home
This is the first and foremost factor that you need to consider when buying a new home in COVID-19. Most people lost their jobs and were left unemployed during the pandemic, so they obviously couldn’t help but wait until 2022 (or whenever the pandemic ends).
Whereas, the people who are still employed have no certainty of their job because the redundancy rates are rising as work supply is lower in comparison to work demand. Therefore, it’s better to wait or assess if you have enough savings.
When evaluating your savings, you must keep in mind that even if you spend them on buying a home, you should be left with enough which can allow you to pay off your electricity, gas, and other utility bills. You simply don’t want to be left without money to survive even if you’re made redundant.
2. Take Into Account the Mortgage Qualifications
Although the mortgage rates have drastically reduced during COVID-19 and this can save you tons of money down the road, you also need to consider the changes in mortgage qualifications.
As the real estate market has become quite uncertain, lenders are even giving a hard time to buyers who are trying to get a mortgage. This means you need to have a good credit score and have a sufficient amount for the down payment to ensure your mortgage doesn’t get declined, and you are able to get lower rates.
In terms of low rates, you should try to secure the low rates as soon as possible and keep monitoring them every single day. You can ask your loan officer to update you with the changes in mortgage rates and as soon as they hit a low point, you can opt for that mortgage rate. Of course, this requires a little bit of patience and guidance from a professional.
3. Home Viewings May Be Limited
You need to socially distance yourself even when buying a new home, and this includes the step of viewing your home before making a final investment decision.
Due to the pandemic, only one party may be allowed to view the house, and this means your real estate agent will be waiting outside for you. Moreover, you will be given limited time to view the home, as others may also be scheduled to view the home.
If in-person viewing is not possible and the COVID-19 situation is quite worse in your locality, you may be asked to do a virtual tour of the house.
You can for sure discuss all the details right after you’re done with the tour, whether in-person or virtual with your agent. Therefore, it’s also essential to hire an agent who understands you and is cooperative, especially in such times.
4. Increase in Competition of the Housing Industry
As the pandemic has caused the mortgage rates to decline dramatically, this has made the entire housing market even more competitive.
In addition to this, there may be a low supply of housing construction materials, which makes the construction of houses slower. In other words, the supply of housing is lower as compared to the demand for housing.
All of this contributes to high competition in the real estate industry, therefore, it may take months for you to get your hands on the house of your dreams.
You may also need to pay a bit higher for buying your home to get ahead of the competition. You should also keep in mind that it’s okay to not get the house you have dreamed of in the first place, just keep looking around, and you will surely secure the best house for you and your family.