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Homeownership is important to many Americans – both those buying for the first time and those wanting to make their next home purchase — but the recent crisis may have many wondering how to proceed.
While the COVID-19 crisis has certainly caused some disruption to the traditional spring buying season, recent market data shows that many buyers and sellers are continuing to move forward with their home buying plans. If you’re a prospective homeowner, here are a few things to think about:
Take stock of your personal homebuying goals and finances. Did the crisis change what you’re looking for at all? Is a home office more important or a backyard patio? What about your finances? Do you feel secure in your job? Do you already have savings set aside for a down payment as well as for a rainy day fund?
Know what you can afford. The recent health crisis reinforces the reality of economic ups and downs and the fact that disasters can happen without warning. It reinforces the importance of not overextending yourself in buying; you want to be able to weather any economic cycle. As you consider this, know that a bright spot is that mortgage rates are very low right now, which helps stretch your dollars when you decide to buy.
Start your house hunt from home. If you’re worried about venturing out, rest easy in knowing you can do a lot of the groundwork from home. As a result of COVID-19, virtual tours and agent-led video walk-throughs and video chat tours have all been added to the mix of showing homes. Lenders are available to serve you remotely, too, and are always available to have phone conversations about the lending process.
Understand your down payment options. There are still financing options available that don’t require you to put 20 percent down. Low down-payment options include our own yourFirst Mortgage® program and government programs like VA and FHA. How much you put down is a financial decision to weigh as you look at your own finances and personal situation. It’s important to note that putting more down can reduce your monthly payments, which can free up dollars for other parts of your budget, including savings.
Double down on your rainy day fund. It’s always been a good idea to have a little to fall back on. Owning a home means you’ll have expenses for repairs and updates. The economic uncertainty caused by the COVID-19 crisis reinforces the importance of having money to fall back on if you have an unexpected expense or loss in income.
Embrace digital tools. Just like shopping for your perfect house, you can apply for a home loan from your kitchen; you never really need to step into a bank. Many tasks can be handled online, from starting the loan applications to signing disclosures and uploading needed documents during the loan process.
The current crisis has many Americans reflecting on their living spaces and thinking about their long-term financial goals. While no one knows exactly what will happen in the economy, if you are weighing whether buying is right for you, take a minute to focus in on your own unique goals, opportunities and circumstances and make the best decision for you.