As our population deals with the financial ramifications of COVID-19, some people are wondering if this could be an ideal time to buy property. The 2008 Great Recession sent housing prices into a freefall, allowing countless homebuyers and investors to scoop up properties at rock-bottom prices. However, that doesn’t necessarily mean that this recession will look the same.
Is there any hope for buyers hoping to score a deal? Yes! While you might not find plummeting home prices, there are plenty of reasons why this recession is a smart time to buy. Here are three reasons why it’s a good idea to buy property now, presented by Home Inspections Cost.
#1: Mortgage Rates are at an All-Time Low
Mortgage rates are low, and because buyers are able to lock in low monthly payments, they have more purchasing power on the market. But what is a mortgage exactly? Before you go any further into the home buying process, you need to understand some basics. A mortgage is a loan you take out for the purchase of a property, because most people cannot afford to buy a home in cash. You have to qualify for the loan, and you may have a fixed or variable rate, meaning the interest rate might stay the same or fluctuate over time.
Along with low rates come tighter lending standards, which means it’s important that your credit is in tip-top shape before buying. A larger down payment also boosts a buyer’s creditworthiness.
#2: Foreclosures are Expected to Rise
Many homeowners remain vulnerable to losing their homes. And as the number of seriously delinquent mortgages continues to rise, some experts are predicting a foreclosure crisis on the horizon.
That could present an opportunity for investors and buyers in search of a bargain and willing to put up with the hassle of financing a foreclosure. A foreclosure definition is that the bank has repossessed the home because the owner was unable to pay back the loan. This and other types of Real Estate Owned (or REO) property can be a great investment. However, before buying one of these properties it’s important to understand the risks of purchasing property as-is. Since the seller won’t make repairs, buyers must do their due diligence to assess the property’s condition and identify red flags. This may include consulting with an attorney, performing a title search, and inspecting for major defects like structural problems and pests.
#3: Prices are Only Going Up
The most convincing reason to buy? While current home prices may not be especially low, they’re only on the rise. With prices on a steady upward trend, you may never get more house for your money than you can buy right now.
Not sure if you’re ready to buy? While a large down payment has its benefits, it’s not strictly necessary for primary residences, and it’s possible for home buyers to purchase a home without putting 20 percent down.
Should You Buy Right Now?
Ultimately, there’s never a bad time to buy a home, even in a recession. While it’s smart to pay attention to the housing market and mortgage rates, the most important thing is that you’re financially prepared to be a homeowner. Before buying, set a realistic budget and pull a credit report to correct errors and boost your credit score as needed.
The story is different for investors. As a real estate investor, the housing market is instrumental to your success. While there are a few markets where prices are rising fast enough to make a fix-and-flip strategy profitable, buying properties to hold as rentals carries less risk for investors. Pay attention to what’s happening in your local housing market so you make the right investment for right now.
Your investment depends on a lot more than the economy. If you are ready to buy, right now is a great time. Take advantage of today’s low mortgage rates, and you’ll be glad you bought your property when you did.
Whether you are buying your first home or investing in a house to flip, you will need a quality home inspection. To understand what is involved and what you should look for in a home inspector, visit Home Inspections Costs. We want you to be informed going into your inspection process, and provide the resources you need.
Article Courtesy of Bret Engle at DiyGuys.net