I Planned to Buy a Home, Then Everything Hit the Fan! What Do I Do?
Loan officers and real estate agents are getting this question a lot right now. But I think we need to be asking you a different question. How motivated are you? If you have been actively preparing, your credit is strong, money is saved, and job is secure, then you are the perfect candidate to move forward. Don’t second guess! Here is why:
Everyone needs a place to live.
If your lease is coming to an end and you were prepared to buy but now hesitating, don’t! You are going to have to live somewhere and signing a new lease would be a complete waste of time and assets. You would be spending your hard-earned money on a security deposit rather than putting those funds towards a down payment. I’ll let you in on a little secret, typically monthly rental payments are nearly the same as mortgage payments. At least with a mortgage payment, each month that money is being put toward equity, aka your net worth.
A home offers security.
If you purchased today, you are locked in at a secure monthly payment that you and a bank agreed you can afford. That monthly payment is fixed regardless of what happens in the market or in the news. A lot of misconceptions stem from 10-12 years ago when the market crashed. However, at that time most people had adjustable rate mortgages causing monthly payments to skyrocket once the market crashed. The good news is that today, most loans are fixed, preventing that from happening again. On the flip, rental rates always have the potential to increase. The initial rate agreed upon is never locked in, allowing for fluctuations that result in renters never feeling 100% secure.
Real Estate is a long-term investment, not a short one.
The wide consensus is that the housing market will quickly re-set back to normal and you will be ahead of the curve by already owning. Additionally, after this lengthy shelter-in-place order, people will start to see the need for better living quarters. And let’s not forget, thanks to this crash course on remote business, many have come to the realization that working from home could be the new norm. We could be looking at a huge influx in home buyers. Resulting in existing home buyers receiving a quick boost in equity, leaving you in a great financial position.
The best advice I can give is don’t buy a home based on what’s going on in the market or news. Buy based off your motivation and where you are personally and financially. Most importantly, if you are going out to see homes and meet with lenders, please be safe. Stay 6 feet apart from all agents, pass on the handshakes, and reschedule appointments if you are not feeling well. Happy virtual home shopping!