The ongoing coronavirus pandemic has decimated the economy and dealt some damage to the U.S. housing market. As a homeowner, you may be feeling these effects directly, especially if you were looking to sell.
Those who were preparing to buy a home before the onset of COVID-19 may be especially challenged by the increasingly unstable rates that make it challenging to financially prepare for the future. To assist you in making the present recession a bit easier on your homeownership ventures, we’ve provided a short guide with the help of Rex Homes on how to buy a home, despite the impending recession.
1. Do Your Research
Firstly, understand that there is still opportunity for buying and selling in the current housing market, despite the nationwide economic downturn. People are still looking to get rid of their current homes and move into new ones due to various reasons, such as new professional opportunities and the need to relocate for family relationships. This means that you have the chance to do the same.
To take advantage of this, all you must do is research the market. What are the current pricing averages and rates? You may find something that suits you, whether you fall on the buying or selling end.
2. Explore Refinancing Options
Even if you are unable to find suitable rates, you are not out of options. Thousands of homeowners are refinancing, taking advantage of the stunning conforming and jumbo rates at 3.47% and 3.58%, respectively – levels unheard of since 2011. Speak with your mortgage advisor to discover the options that may currently be available to you.
3. Don’t Get Discouraged by an Upside-Down Mortgage
Having an upside-down mortgage means that you owe more on your home than its current estimated value. To understand this, compare the home-buying process to that of purchasing a brand-new vehicle. The moment you drive it off the lot, the car begins to lose value. In a short while, the car you bought for $30,000 might only be worth $20,000, meaning you now have negative equity.
The same happens to homes due to depreciation. The moment you move into your home, this depreciation process beings, causing you to accumulate negative equity, which could make you ineligible for certain refinancing options. Many homeowners are facing this unfortunate reality right now, given the rapid market fluctuations. Still, you are not out of luck.
These waves in housing valuation may eventually play to your benefit. If possible, wait out the current market instability and see if your equity can be resolved later. Consulting with a mortgage professional is the best way to get an idea of how to move forward if you’re upside-down in your mortgage.
4. Take Advantage of Federal Financing Options
The federal government has recognized the enormous pressures weighing on homeowners right now. To assist struggling homeowners during this time (even those who are upside-down!), they’ve offered refinancing options to homeowners that meet the following criteria:
- Either Freddie Mac or Fannie Mae owns your current mortgage.
- Your loan payments are current.
- You are upside-down by 125% or less.
To learn more about refinancing, buying, and selling options currently available to you, contact a mortgage professional. They will guide you in making the best possible financial decisions for your current circumstances and get you back on track in your homeownership ventures, despite the ongoing pandemic.