Mortgage Rates continue to fall to its lowest amidst the COVID-19 crisis. This is despite the fact the cases in the United States is soaring to all-new levels. It is a bad scenario for health and safety but nevertheless, it is still a good time to either buy a new home, get an investment home, do a reverse mortgage, or even refinance. The current mortgage rates may not come again in years to come. However, let us look into some key experiences on how to buy a home during the pandemic.
House Tours Gets Strange
Social distancing is the key nowadays and most house tours can be done virtually. There are fewer and fewer sellers who would even allow to meet you in person. However, if you really feel the need to do a house tour for yourself in person then you can ask if it would be possible. Ask them if it is okay to pop inside for a very socially distant and masked personal visit. Do this only and only if you are already interested to get the house.
Consider Other Things in this Time of Chaos
COVID-19 cases continue to rise in the United States and it is now more than 3 million. Mortgage rates are really very low and are ideal for your home-buying decisions but you should also consider other things. One solution is to map out the worst-case financial scenarios for you and ask the following questions:
- How stable is your source of income right now?
- Will your savings be able to cover for your expenses in case you lose work?
- What is the best possible mortgage that we can have?
The above questions are key since this pandemic is an ongoing crisis and there are no clear solutions yet being seen in the foreseeable future.
How to Make Your Offer Stand Out
When mortgage rates are low, you should know that you are competing with many people who are also maximizing their opportunity. It will be a bidding war out there. Do not be tempted to offer more than what you can afford, just tell them that you can close as soon as possible. Remember that things are changing and if you offer something more, you might be having a financial crisis later. Banks may decide to further limit credit and raise borrowing standards, making it harder to secure your mortgage.
Prepare to Go Under the Microscope
There are tons of perks of buying a home right now. One thing is the fact that you may be able to receive cheaper financing offers. Some companies are trying to lure people to chose them so be sure the one that gives you the best offer.
Since this is also a difficult time, prepare to go under the microscope. This is especially true if you are self-employed. Prepare to provide two to three years of tax returns, as well as balance sheets and profit and loss statements. A letter from your CPA verifying your business is also standard.
Be prepared to answer questions like: What is it that you actually do? How do you make money? How do you plan to make any money in a pandemic?
Some banks don’t want to bear as much risk as before, so prepare for other potential market changes, including higher down payment requirements, a stronger credit score, and constant verification of employment. Our underwriter actually called my CPA for a second time — the day before closing — to verify my business was still in good standing.
Is this the Best Time to Buy a Home?
It definitely is but then again there are personal considerations. Remember that buying a home is not a one-time responsibility, it is an ongoing responsibility. Maximize the low-interest today and prepare to face the challenges in the future. If there is one thing you can be sure of, once things get better interest rates will be a lot higher and you might never get this opportunity again. Buy a home now is definitely one of the best decisions you could ever make.