Should you buy your first home during an economic crisis?

Is buying your first home during an economic crisis a good idea?

BATON ROUGE, La. (WAFB) - The price tag on your first home might look pretty good right now. However, housing experts say there is much more to consider if you want to buy a home during an economic crisis.

"Mortgage rates are at a record low right now, so it’s almost like a no-brainer,” said Tracy Mathis, owner and broker for Southern Homes Realty. “You know, why wouldn’t you at least give it a shot?”

First time home buyers could be in a sweet spot to cut a deal on a new house. Recent economic events due to the COVID-19 pandemic may change a few things before you sign the papers.

“I would say the most relevant thing right now is job stability,” said Ciara Foster, a mortgage loan officer for Reliant Mortgage.

Foster said you must evaluate your current income flow. No matter how low the housing rates are, it’s not easy to afford that purchase long-term if you don’t have the paychecks to support it.

“I think now is a great time for strong buyers and I think maybe weaker buyers should wait until the pandemic is over,” she said.

Foster considers you a strong buyer if you have money in the bank and a credit score higher than 640. Due to recent restrictions, lenders raised the credit score requirement from 580 to 640. This could make or break your deal, even if you were prequalified with a lower score before the pandemic.

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“There were people in the midst of this that had already been approved and literally waiting on their clear to close. And their loans got kicked out because their credit scores changed before they finalized the closing,” said Mathis.

So, if you think you’re a strong buyer, then these experts say get pre-qualified from a professional now. You have a chance to negotiate a good deal on those fees other than the mortgage.

“Buyers have more negotiation power for seller concessions. And basically, that’s when the seller gives the buyer money towards closing costs,” said Foster.

Although deals are closing fast right now, Mathis doesn’t want you to rush into a purchase that doesn’t suit your needs.

“At the end of the day, you still want to make a good investment, whether it’s during this crisis or not. You still want to find a home that economically fits your budget and your comfort level,” said Mathis.

These experts say don’t expect the entire buying process to be a quick thing right now. When Foster could normally finalize deals in 30 days or less, she sees the paperwork process taking up to 45 days now.

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