The outbreak of the coronavirus isn’t going away anytime soon. The real estate market is similar to a stagnant lake with little movement. There is a healthy demand for homes and plenty of good prices because many people have changed their priorities and are looking for safer places to stay as a result of the epidemic.
There are currently low interest rates, so if you’ve had your eye on certain properties but wanted to buy them slowly and carefully, now is the time. Many people have relocated as a result of the epidemic, homes are on sale as a result of job losses.
It may appear as if you’re taking advantage of an opportunity in a rather drab global environment. However, you can make that call if it is necessary. But always when you take that call for the purchase e, stick to the 30/30/3 rule. Your monthly installment against the home loan must be preferably should not exceed 30% of your gross income.
When you break this rule to buy a home that is even more expensive, you’re at high risk. Maintain a cash reserve equal to 30% of the home’s value. At least 30% of the home’s value is saved in cash or low-risk investments, with 20% going toward the down payment and 10% for a solid cash cushion. The cost of your home should not exceed three times your annual gross income.
If you’ve been saving money and making investment plans in the hopes of purchasing a home in the near future, now is the time to pick and choose your dream home.
Owning a home can improve your quality of life significantly, which is especially appealing now that many of us are working from home and raising families. When buying a home, you’ll need enough money to cover the down payment and closing costs. If you have that with you, you are in the right place at the right time.
Opinions differ on whether it’s better to stretch your budget for a better home or sacrifice to give yourself more financial breathing room. Consider your risk tolerance and safety net when making this decision. A long-term home loan and its high installment should not be a hindrance to your future financial plans.
Taking out a home loan and buying a house isn’t enough to cover all of your expenses. Behind the deed, there could be a slew of hidden financial factors such as maintenance, monthly and yearly fees, and so on. Take into account all of them when making your final decision to purchase a home.
In other words, you should think about not only what you can pay now, but also what you might be able to pay later. Consider the high costs of owning and maintaining a home, as well as changes in your personal circumstances that could drain your savings.
So, if you are already prepared, buying a house during the pandemic is a good idea. On the other hand considering the purchase of a house as an investment is debatable. The scenario is still unpredictable given the way the pandemic is shaping up. As a result, it is preferable to stick to the plan rather than using the pandemic as an opportunity to invest in something for which we are unprepared.