As lending standards have tightened recently, many are concerned over whether or not their credit score is strong enough to qualify for a mortgage.
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“When people decide to buy or sell a home, there is a significant amount of preparation that goes into the decision. Does a global pandemic prevent this?”
Purchasing In The Market
When people decide to buy or sell a home, there is a significant amount of preparation that goes into the decision. A buyer may have to work to get his or her credit together and get their finances in order, among other things. As for a seller, they have had to assess market conditions, along with preparing the home to be put on the market. Buyers and sellers have varying motivating factors that determine when they buy or sell a home. More often than not, the decision to buy or sell a home is not an overnight decision. With this in mind, is now a good time to buy or sell a home?
While home sales have taken a small dip, if you are a buyer with a strong financial position, now may be a good time to make your home purchase. A few things to consider first and foremost before you decide to submit that offer.
- Is your job secure?
- Are you mentally prepared to handle the ups and downs of an unsteady market?
- Your lending institution should be local and prepared to close the buyers they pre-approve, even if credit limits change.
- You want to be sure that you work with a Realtor who has the tools and the experience to work with you in the current climate. Right now, virtual real estate is the way to work.
Many lending institutions have increased their minimum credit criteria from the traditional number of a 620 FICO (in some cases even lower), up to 660 or 680. Interest rates have been quite unsteady while changing almost daily, as the stock market fluctuates causing economic uncertainty. As many Americans have not seen a paycheck in nearly a month, a great number of people may not have a job to go back to. This will undoubtedly increase the risk of defaults on mortgages, and foreclosures. Lending institutions will continue to tighten upon taking the risk of lending to low credit borrowers. Many lenders sell their loans to investors once a real estate transaction closes. Investors are not interested in purchasing more “risky” loans.
Selling In The Market
If you have considered selling your home, now is still a good time. There are people who are still in a position to buy. In light of recent developments with COVID-19, if you are someone who has not worked, you may have a hard time catching up on your mortgage. This may be the time to look at your options. We were (and still are) in a healthy economy less than 6 weeks ago. If things continue on the same path as they have been for the past 5 weeks, it may be very hard for many Americans to overcome financial hardship. While home values have held steady, sellers may be able to sell their homes and re-establish themselves. They may be able to downsize and use the proceeds to take care of the home front while we all deal with the uncertainty among us.
Making A Move
If you would like to have a consultation to answer your questions and address any concerns about whether now is a good time to buy or sell your home, or if you should wait, send us a message and schedule an appointment. We will assess your needs and help you make an informed decision. Please be cautious, be careful, get educated, and stay safe.
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