4 things to keep in mind if you're buying a home during the coronavirus pandemic
The coronavirus is affecting nearly every aspect of American life.
If you had been looking for a house to buy — well, what are you supposed to do in response to coronavirus? There haven't been many clear answers.
The process of buying a house changed drastically over just a few days. Volatile interest rates, canceled open houses, and longer wait times have left people scratching their heads. Whether it's your first time buying a home or your fifth time, you probably haven't faced this type of situation before.
You may decide to put off buying a home until the pandemic settles down. But if you want to continue with the process, professionals recommend you do four things to adjust to changes caused by the coronavirus.
1. Remember that mortgage rates are volatile right now.
You might be surprised that mortgage interest rates are changing so frequently in response to the coronavirus. The Federal Reserve has lowered its rate twice in 2020, which has caused interest rates to decrease on everything from credit cards to savings accounts. Shouldn't mortgage rates be lower, too?
The federal funds rate affects short-term loan rates more than anything else. Mortgages are long-term loans, usually ranging from 15 to 30 years. There's often a correlation, but the federal funds rate's effects on mortgages aren't as cut and dried as its impact on other types of loans.
Instead, mortgage rates heavily rely on demand. For example, when rates were low in early March, lenders were flooded by refinancing applications. Raising mortgage rates helps slow down the stream of applications.
2. Start the process as early as possible. The home buying process is taking longer than usual, and you could end up waiting around if you don't get a jump start.
Yes, the influx of refinancing applications has overwhelmed lenders — but that's not the only reason the process is slowing down. Many companies' employees are now working from home, which sometimes hinders them from working as quickly.
If you're hoping to buy and move into a home by a certain date, you probably want to contact a real estate broker and lender earlier rather than later, just to get the ball rolling.
3. Ask for video and virtual tours
Many companies have canceled open houses and tours to prevent the spread of germs. Thankfully, you don't have to just rely on online pictures. You can take a digital tour.
4. Find a real estate broker who takes the coronavirus seriously.
Choose a broker who is willing to go above and beyond to help you choose a home during this unique time.