With today’s fears of COVID-19 and the expansive financial uncertainties that have come with it, it’s causing a great amount of anxiety with buyers, particularly when more important things are being considered. Although these are unprecedented times, it’s also important to consider that these economic hardships should be shorter in duration than what we saw in 2008. Even so, it’s important to consider the benefits as well as the disadvantages of financing a home in times like this.
The Recession of 2008
For those who distinctly remember that recession, it was greatly fueled by the housing and mortgage market itself. At that time, subprime mortgages were available for almost anyone, including those who could least afford it. In attempting to keep up with obligations, many found themselves in the throes of foreclosure. At that time, it was estimated that 9.3 million homeowners lost their homes. The housing market responded with spiraling home prices.
What is Different in Our Current Scenario?
Our current lending scenario is quite different. We have learned hard lessons from the subprime mortgage debacle and consequential recession. Lenders are very careful to implement common sense underwriting standards to ensure that borrowers can afford their payments. They are also very careful to ascertain the financial fitness of a potential borrower, considering both income and job security.
What Does Your Job Security Look Like?
For borrowers who are very confident in their job security and income, it could be a good time to buy a home or refinance a mortgage. Despite the fear we are seeing, home investment is a long-term outlook that can override short-term disruptions.
There may be many people who are considering selling right now to tap into equity in these financially uncertain times. This current landscape offers the possibility of having access to more affordable home prices and an increase in home inventory as financial burdens increase for many people.
At times like this, many investors take advantage of opportunities afforded by affordable homes and seller panic. This is a double-edged issue. On one side, a seller may be glad to sell a home for financial liquidity. On the other side, it can be perceived as taking advantage of another’s misfortune. This is no doubt what we may be seeing more of in the coming weeks and months.
Mortgage Rates at an All Time Low
The possibility looms that mortgage interest rates may decrease even while being at all-time lows already. Buyers who are in solid financial positions and are still considering buying in this landscape should consider their options very carefully.
If you want professional advice regarding mortgage options, call Liberty Capital Services for our expert opinion. We are licensed mortgage brokers in Columbus, OH and able to do business in Ohio, Florida and California. We would be happy to look at your situation and help you make the right decision for these unprecedented times, call us at (614) 505-0620 .