Is Now a Good Time to Buy a Home?

However, pursuing homeownership or renovating your home can be overwhelming and challenging at any time, but it’s possible.

Not sure what to do? We gathered some information and items for consideration that may be able to help.  

Should I buy a house now?

Whether you’ve been asking yourself this question for years or more recently since COVID-19, deciding to purchase a home takes careful consideration. Here are a few helpful tips to consider. 

Job and Income Security

Your current job and income security are the most important factors to consider before starting the home buying process, especially during a pandemic.  Will your job or position change? Have you recently changed employers? What’s the likelihood of your position being eliminated? If you lost your job, do you have an emergency fund to cover six to eight months of living expenses? 

Budget

Can you afford a mortgage right now? Take a look at your spending habits and budget to determine if buying a home is affordable. Are you going to be able to maintain the same quality of life after you move in? Will you need to make adjustments in your spending? 

Also, are you prepared to pay other expenses such as a down payment, inspection, loan origination fees, appraisal fees, homeowners association fees, new furniture, etc.?

Mortgage Rates

You’ve probably heard that mortgage rates have hit historical lows due to the current economic conditions. Purchasing a home today with rates this low means your monthly payments will be lower and the total cost of the loan will be lower, potentially saving you thousands of dollars. 

Also, there are many cost-saving programs available to help make home ownership a reality.  Do your research to find the best interest rate and program to save you the most money and to best fit your needs.

Housing Market

Competition is another factor to consider.  COVID-19 has caused some home buyers to pause their home search, giving you less competition. Less competition puts you in a stronger position to negotiate with sellers. On the other hand, fewer homes are available on the market, limiting your choices for finding your dream home. 
 

Safety

Your health is always a top priority. The real estate industry has made some changes to the home buying process to ensure that it is as safe as possible. Some realtors offer video chats where they will walk through the home you’re interested in, allowing you to virtual tour home options. Virtual tours may not be as satisfying as touring the house in person, but they do provide you a good idea of whether or not you want to further pursue the property and see the home in person. 

Should I refinance my mortgage now?

Refinancing often makes sense if your loan rate is more than one percentage point above current rates. 

Some homeowners decide to refinance to reduce the term of the loan. Maybe you started with a 30-year mortgage and would like to refinance to a 15-year mortgage. In addition to helping you pay off your mortgage sooner, reducing your term could save you a significant amount of money by decreasing the total amount you pay back in interest. Run the numbers using a refinance calculator to see how much you could actually save by reducing your mortgage term.  

Here are some factors to consider before refinancing your mortgage.

• How long do you plan to stay in home?
• How much equity do you have in your home?
• How low should the rate be before I refinance?
• Be aware of ad promoting exceptionally low rates.
• How much will it cost to refinance?

Should I renovate my home now?

You’ve probably been binge watching HGTV and getting new ideas lately, and now, you’re feeling inspired to make some home improvements. Right now may be the ideal time for you to consider your options because many contractors, subcontractors and design teams may be able to negotiate deals to bring the renovation costs down.

Did you know can use the equity in your home to help you renovate your home? Here are a few options to consider.

1. Home Equity Line of Credit.

The equity you have in your home can be used to set up a Home Equity Line of Credit (HELOC). A HELOC is a revolving line of credit that’s a convenient and flexible way to use your funds as needed and pay off balances without closing the line of credit.  You can typically borrow up to 80% of your home's current value, minus any existing first mortgage balance.

2. Home Equity Loan.

You can use your home’s equity to get a Home Equity Loan. This fixed-rate loan gives you a lump sum payment with various loan terms options. You can typically borrow up to 80% of your home’s current value, minus any existing first mortgage balance. 

3. Cash-out Refinance.

If you have enough equity in your home, a cash-out refinance may be an option to consider. A cash-out refinances allows you to replace your current loan with a new mortgage for more than you owe on your house, the difference is then paid to you in cash. The extra ‘cash-out’ funds can be used for things like home improvements. With a cash-out refinance, you could refinance your mortgage at a lower rate and receive a cash-out at the same time. The cash-out payment will depend on the equity you have in your home. 

Whether you’re looking to make a move or if you’re feeling inspired after hours of HGTV to add that deck or update the kitchen you’ve been thinking about, now is just as good a time as any to get started. If you have any questions about the process, please feel free to contact our mortgage department.