The pandemic has caused people to alter their living situation, whether it’s by moving, upgrading, downgrading, renovating, or buying a new home. Either way, the housing market is still strong. Nonetheless, there are new rules to think about when purchasing a home during COVID-19, such as:
RULE #1: Good Credit Is King
Make sure you have good credit, especially since lenders tend to have higher expectations from borrowers. Free credit reports are available every week due to the pandemic. If your credit is sub-par, you may not receive approval for a loan, or your mortgage prices could increase. However, keep in mind that building credit does take time.
RULE #2: Understand Owning vs Renting
Understand the benefits of owning versus renting, such as being able to build home equity, receive property tax deductions, and mortgage interest tax deductions. Furthermore, living in upstate New York can provide the advantage of having your property value rise over time to build equity. Especially during this pandemic, many city dwellers have moved from New York City to the cities of upstate New York.
RULE #3: What Lifestyle Do You Want To Live?
Evaluate your lifestyle and what you look for in a home. Do you want a permanent place of residence where you can personally renovate your own home and live there long-term? Or would you prefer renting an apartment so you can travel around the world and not have to worry about ongoing maintenance?
RULE #4: The Down Payment
Calculate if you can afford a down payment, which is the difference between the houses’ purchase price and the mortgage amount you will receive. If you can afford a 20% down payment, you can avoid purchasing private mortgage insurance. Also, keep in mind how closing costs can be added as well.
RULE #5: The Correct Safe Keeping of The Down Payment
Save your down payment in a safe place, even if it does not earn a significantly high amount of interest. An example could be keeping your down payment in a high-yield, Federal Deposit Insurance Corporation (FDIC)-insured savings account.
RULE #6: First-Time Homebuyers Usually Get Added Perks and Buying Assistance
Take advantage of being a first-time homebuyer by possibly receiving down payment assistance or tips on home buying options.
RULE #7: Get Pre-Approved
Make sure you get preapproval for a mortgage, which is currently at historic lows due to COVID-19. Attaining a preapproval can give you an advantage, as sellers can accept your offer despite a higher alternative offer that could take longer to close a sale. To determine how much to borrow, consider your property taxes, maintenance fees, homeowner association dues, and home insurance. Stick with a reputable company such as Skeele Insurance Agency, a multi-location company that serves New York with locations in DeRuyter, Chittenango, Cazenovia, Manlius, Moravia, and Waterville.
RULE #8: Take Care of “You” By Social Distancing Even When Trying to Buy a Home the Best You Can.
Utilize technology to keep yourself safe during the pandemic and efficient with the homebuying process. Interview real estate agents via Zoom or Skype, watch interior walkthroughs of home, and close via video or mail.
RULE #9: Conduct Good Research
Complete your due diligence and negotiate accordingly. Get evaluations such as home inspections and termite reports before closing, and even include a COVID-19 addendum that can extend deadlines in case circumstances come up.
RULE #10: Slow Down!
Be patient with the process of buying a home, including getting a mortgage preapproval, touring multiple properties, getting inspections done, and closing. Filling out paperwork and making appointments can take time, but you can feel a great sense of accomplishment after being able to walk into your new home.
Buying a home can be stressful and tedious at times but can be well worth the journey ahead. It is vital to stick with a well-established agency that can explain various types of home coverage and be attentive to your goals. To learn more about buying a home during COVID-19, contact the Skeele Insurance Agency at any of our six locations. Our licensed professionals will be happy to answer any questions you have.