Is Now the Right Time for Buying a Home in TN?

The housing market is unlike it has ever been. Homebuyers are encountering unique scenarios with the ongoing pandemic policies, mortgage rates remaining at a record low, and working from home, which means more flexibility in where people can live. Work-from-home policies are allowing individuals to think about where they want to live, giving them the freedom to relocate to more desirable and affordable areas without sacrificing their jobs. However, the uncertain economy may also make it difficult for some buyers to get financing. So, is it really a good time for buying a home? First, you will need to figure out your financing and determine what you qualify for in terms of lending. This will help you focus your home search on properties you can afford and allow the real estate agent and sellers to have peace of mind that you will follow through with the purchase once an offer is made.

Understanding this Housing Market

Last year, interest rates dipped to an all-time low and were projected to stay low for a couple of years. This is helpful for borrowers as it will lead to smaller monthly mortgage payments and a larger budget. Although, low rates create bidding wars that drive home prices up (commonly way up). With less inventory, house hunting has become very competitive. Not only will you have to act very fast to land a house you want, but you will also have to determine how much you can go over the asking price. Low interest rates may help with the affordability of buying a home, but they also drive market competition up.

Buying a House During COVID

You might be wondering if it’s smart even to consider buying a house in this economy. Home-buying is all about your personal financial situation.

COVID will not make or break you in the process if you:

  • Earn a steady income
  • Have dependable employment
  • Have a credit score of at least 580
  • Have saved for the down payment and closing costs
  • Have a low to moderate debt-to-income ratio (DTI)

With the current state of the economy, employment and income stability are the main factors you should consider. Mortgage lenders will want to verify that your income will remain steady for at least three years after closing. Note the importance of getting your credit score higher before applying for a mortgage, as this will greatly help you land a better interest rate. A high score tells lenders that you have smart financial habits, and they will take that into account when determining the rate they will offer.

Even though you are likely able to get a great rate right now, keep in mind it is never good to rush into a purchase based solely on interest rates. A mortgage is a long-term commitment, so ensure you are ready to hold such a responsibility, regardless of what is going on with the real estate market.

About Barnes Insurance Agency

At Barnes Insurance Agency, we specialize in vacation home rental insurance to ensure the protection of your property and assets. We strive to offer customizable solutions to meet your specific needs. For more information, contact us today at (866) 733-5424.

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