First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19? – If you are a first-time homebuyer and were in the market to buy a home in Oakland County prior to the COVID-19 crisis, the situation has more than likely affected your original gameplan.
It’s one thing to have never bought a house before and be in unfamiliar territory. Throw in a pandemic and the situation is now moved into deeper uncharted waters, even for the most seasoned buyer.
The COVID-19 situation has derailed millions of folk’s financial plans including buying property. But it doesn’t have to be that way.
If you were still hoping to purchase a home soon, you probably have a lot of questions like whether it’s even possible to buy a home now or tour a house, or how the pandemic has impacted home prices, and more.
The good news is that many people are still buying houses during this unprecedented time, even though things are a bit different than they were before the coronavirus changed the home buying/selling landscape.
As a first-time homebuyer during the coronavirus, here are a few things to know:
Can You Still Buy a House Now?
The answer is yes. Although buying a house today may be more challenging due to health and economic concerns, it is definitely possible. The U.S. Department of Homeland Security has declared that residential and commercial real estate services are an essential service.
Search the MLS for Oakland County MI Homes for Sale
If you find a home that seems right for you, have job stability and can get financing at historically low rates, buying property might be a wise choice and the right thing to do – even now.
You Can Still Shop for a House
You can still shop for a house, but the rules for viewing a property are going to different than before COVID-19. Buyers, sellers, REALTORS, and brokers are coming up with different ways to see and show homes.
Some areas, however, have put a pause order on in-person showings all together. There are also some sellers that might be fine with you touring their house, while others might not be comfortable letting strangers in their home, even if property tours are allowed in your area.
Aside from federal and local restrictions, a lot will depend on the home sellers’ comfort levels. You can also work with an agent and have a virtual showing, where the agent walks through the property with you on Zoom, FaceTime, or some other video conferencing format.
A local real estate agent will know what buyers can and can’t do in your area, so its best to consult an agent for the most accurate, up-to-date information.
You May Need To Get Your Pre-approval Updated
While the process of getting preapproved for a loan hasn’t changed, as most buyers today do an online preapproval application, the preapproval itself has changed post-coronavirus.
Mortgage lenders are battling economic uncertainty by raising minimum credit scores, requiring higher down payments, triple-checking employment status, and even eliminating certain loan types altogether.
As some lenders increase their standards (overlays), your price range might change because your approved loan amount is lower, or you may no longer qualify for a loan at all.
You May or May Not be able to Get an Inspection
Once the house goes under contract, closing is different in today’s world. You’ll still be able to get an appraisal under current regulations, but depending on whether real estate is considered essential in your area, you may not be able to get an inspection.
If you are able to get an inspection, most likely you and your agent will not be able to attend. A number of home inspectors are now using live video chatting apps like FaceTime or Zoom to let home buyers tag along remotely. This keeps buyers at a safe distance for home inspections.
More Buyers Are Doing eClosings
Digital real estate closings or eClosings, give buyers and sellers the ability to sign settlement documents electronically—meaning parties don’t have to meet in a room to close the deal.
Most eClosings are orchestrated by title agents, who often lead individuals through the required paperwork by video conferencing. Most states are now offering electronic notarizations. This map from settlement software company PropLogix shows what states allow digital closings.
Partner with Top-rated Oakland County MI REALTOR® – Tom Gilliam
Whether you are looking for homes for sale in Oakland County MI or you are ready to list your current property, experience matters most in a changing market.
With over 25 years of local experience, Tom provides the kind of knowledge, skills, dedication, and personalized service you need and deserve.
As your personal agent, Tom will protect your interests, advocate for you, and go above and beyond to ensure a smooth and successful transaction.
If you or someone you know is interested in buying or selling Oakland County MI real estate, please give Tom a call today at 248-790-5594 or you can get in touch here.
Tom Gilliam, REALTOR®
29630 Orchard Lake Rd.
Farmington Hills 48334
Email: Tom @ Homes2MoveYou.com
Are you thinking about buying a home in 2018? Are you on the fence about entering the real estate market? If so, you might want to consider buying sooner rather than later. Mortgage rates just rose again, and economists from Freddie Mac and other groups are predicting that they could rise gradually throughout 2018.
Mortgage Rates Hit Highest Level Since December 2016
During the week of February 8, 2018, the average rate for a 30-year fixed home loan rose to 4.32%. Rates haven’t been that high since December 2016. This is based on the weekly mortgage industry survey conducted by Freddie Mac. The average rates for 15-year fixed mortgages and 5/1 ARM loans rose as well. Those are the three categories tracked by this survey.
According to the Freddie Mac report:
“The U.S. weekly average 30-year fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week. Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed. The 30-year fixed mortgage rate is up 33 basis points since the start of the year.”
This is actually the continuation of a trend that began a few weeks ago. For a while now, mortgage rates have been following a steady upward path. You can see that clearly in the chart below. During the latter half of 2017, and into the beginning of 2018, the average rate for a 30-year mortgage hovered below 4%. Then it crossed that threshold and shot up by 25 basis points (0.25%), which brings us up to the latest reading.
Chart: 30-Year Loan Rates Over the Last Year
The chart below, courtesy of Freddie Mac, shows average rates for a 30-year fixed home loan going back one year. As you can see, rates are higher now (on the right side of the chart) than they’ve been all year.
Chart: Average mortgage rates over the last year | Source: Freddie Mac PMMS
This is not surprising to industry watchers and analysts. Last year, economists from the Mortgage Bankers Association and Freddie Mac were predicting that rates would rise gradually throughout 2018. Some forecasts suggested that the average rate for a 30-year mortgage would reach 5% by the end of this year. And that’s entirely plausible, given this recent uptick in lending rates.
So what’s causing this recent rise in borrowing costs? Several things. Over the last year, the Federal Reserve has been gradually increasing the short-term federal funds rate. This can have an indirect affect on consumer borrowing costs. The Fed’s policy changes, along with general economic improvements, are partly what’s driving the rise in interest rates — including those used for mortgage loans.
And some economists are predicting that we will see a continued yet gradual rise in rates throughout 2018.
All of this makes a good argument for buying a home sooner rather than later. Home buyers who postpone their purchases until later in the year could encounter higher mortgage rates. And when you consider the fact that home prices are still rising in most parts of the country, there’s even more urgency.
Granted, you should never make a home purchase until you are 100% ready to do so, financially and emotionally. It has to be the right move for you, one that will improve your qualify of life in some way. With that being said, it might make sense to buy sooner rather than later to avoid possible rate hikes and home-price increases.
Note: Mortgage rates can vary from one borrower to the next due to a number of factors, including credit history and the type of loan being used. The numbers presented above are based on averages reported by Freddie Mac.
The goal of owning your Novi home free and clear is usually thought of as the sunniest eventual outcome of the process that begins with buying your Novi house. The vision of the day when you make that last mortgage payment is an attractive one: whether in retirement or sooner, a “free rent” future has great appeal.
Buying Your Novi House: Some Ask, ‘What’s the Hurry?’
So when financial planners argue against the wisdom of paying off your mortgage, it makes for interesting reading. One such planner is Ric Edelman, whose article “11 Great Reasons to Carry a Big, Long Mortgage” presents a laundry list of the possible financial benefits. As one of the nations’ foremost financial advisers, Edelman also has a well-earned reputation for brash presentations (his PBS series made the most of that). And he really does list eleven reasons why “you should have as big a mortgage as you can get and never pay it off.”
Some of the reasons are fact-based—but not really pertinent. For instance, Reason #1 is that your mortgage doesn’t affect your home’s value. True: whether its value rises or falls depends largely on the current Novi market…but that isn’t a reason for or against carrying home loan debt.
The same is true for Reason #2, which is that a mortgage “won’t stop you from building equity…” The logic here is the same: even if you never paid down your home loan’s principal at all, if the expected market value rises (it’s “almost certain to grow in value over the next 20 years”), your equity would grow independently.
More convincing are the remaining nine reasons, leading off with Reason #3, “A mortgage is cheap money.” This will earn head nods from every financial analyst, and it’s doubly true with today’s incredibly low interest rates. It may only be useful to those who have ideas for places where the “cheap money” can produce juicy profits—but what financial planner can’t suggest a few?
The other reasons deal with:
- tax benefits
- the dwindling real cost of mortgage payments over time due to inflation
- the liquidity provided by refinancing (“selling without selling”)
- the wealth creation possibilities of money invested sooner rather than later
Each of these can be illustrated by graphs and charts (and believe me, they are).
Whether you are more of the less-owed-the-better mindset or Edelman’s big long mortgage school, one thing holds true in both cases: buying your Novi house is the necessary first step. I can be of immediate value in that department—call me to see what I mean!