TO BUY A HOUSE OR NOT TO BUY A HOUSE, THAT IS THE QUESTION?…

The Covid-19 pandemic has meant many of us have had time on our hands, including me. So, with an imminent move for my son and his wife to live closer to us all, I said I would help by researching mortgage deals and anything that might help them out with a move. This is their first house buy after many years of renting, and whether this is the right time to move time will only tell. They have both said after renting for so many years they want this to be their forever home so it is essential that we are getting everything right.

Your first house is a big deal for anyone, and the size of mortgage is one of the most important decisions you make as this must be paid back without stretching you to the limit. I first headed over to the Financial Times to get a feel of what is happening on the house front. They wrote that the US mortgage executives forecast a $3tn year in 2021 with lending rates expected to fall as competition for borrowers heats up. It showed that the UK house prices are a little shaky at the moment but the post-lockdown boom continues, although some experts are gloomy about prospects after March 2021.

This makes me feel confident that it could be a good time to buy but that there will be a fierce competition amongst lenders. I then started looking at comparison sites for mortgages and started with Fannie Mae. Their site is easy to understand and their homeowners and renters’ section explains how they work with lenders and mortgage providers to always ensure access to housing finance opportunities and in all markets. They had a great link to find properties for sale which I sent over to my son to look through. They really fancy something near the coast as they are an outdoor couple and want access to all sorts of activities.

Fannie Mae’s link to their Homepath.com site led me to the ‘What Can You Afford’ section where it explains in detail how to workout what mortgage you could afford to set up with. Simple steps like – ‘determine what’s affordable, understand your credit limit, review your finances in detail and see what you have saved as a down payment’, were some of the essential things you need to know before you got a mortgage but before I went back to my son with the information I wanted to see if their was something a little quicker and easier to understand so they could quickly work things out.

I sat down and started looking for the best mortgage deal I could find which Fannie Mae’s site has this facility, but I also found another site Mortgage Calculators.info that was much easier to navigate around. They had a monthly payment calculator, a minimum income requirement calculator so you could work out if your income is enough to afford the mortgage, plus a home loan calculator which showed how much home you could afford and something I had not seen on any other sites, a frontend and backend debt ratio calculator which quickly determines both of your debt-to-income ratios. This was all we needed to sit down and talk about to ensure they did not overstretch themselves with their first mortgage.

On Fannie Mae’s site they wrote on 7th January 2021 that consumer confidence in housing fell again as the Covid-19 pandemic surges and ‘good time to buy’ and ‘good time to sell’ indicates decline due to reported economic concerns. As a result, the net share of Americans who say it is a good time to buy decreased a percentage points month over month.

Personally, I think that real estate is seasonal and that certain times of the year are busier than others which impacts on pricing, and availability of properties. So, the different statements from different companies does not put me off our search for a house now.

The site, The Balance,  say that ‘The best time to find a deal on a home is in the winter months, “Kristina Morales, a real estate agent in Houston, told The Balance, they also said that ‘During this time, buyers will have the least amount of competition when making offers on properties. This reduction in competition will help buyers purchase a home at better prices”.

We have now done all the calculations after my research on where to go for the best information and I feel sure my son and his wife will soon be sorted with a new home and of course a new mortgage. For us that cannot be soon enough as we cannot wait to have them living near us.

Source: Financial Times, Fannie Mae, Homepath, Mortgage Calculators Info. The Balance

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