buying a home

Buying a home for the first time during Covid

Hi, I am Tiffany, from, your place to grow your career finances and lifestyle, and today I’m going to share a few tips that I took away from buying a home for the first time during covid. 

Homeownership was one of my dreams ever since I could remember. I have always wanted to own my own home. I almost bought a townhouse a few years ago.

I started the process and ultimately decided to pull back due to a few issues discovered during the home inspection. 

But when my fiancé and I decided that we wanted to buy our home, we were definitely thinking 2020. However, we did not know that a pandemic would hit. 

The coronavirus completely derailed most of our plans for 2020. We put wedding planning on hold, we had to pull our daughter from school and also transition to a work from home environment. 

I also survived a round of layoffs at my job, and my fiance took a salary cut because of the pandemic. This seriously made us reconsider the decision to buy a home in 2020. 

We took some time to think about it, assess our financial situation, and ultimately decided to move forward with our homeownership plans. 

But let me tell you, the process of buying a home is a long, sometimes stressful process which is very involved with so many moving parts. 

Buying a home for the first time during covid definitely compounded the homeownership process’s stress and anxiety. 

But I learned a lot of key strategies that hopefully you can find useful whether you’re thinking about buying a home soon or you have plans to buy a home in the future. 

Overview: Buying a home for the first time during Covid

Assess your financial situation

Number one is to evaluate your financial standing. How do your finances look right now with everything happening with the pandemic? 

More than two million people have lost their jobs as a result of the pandemic. Many have been furloughed or have experienced a decrease in their income. 

Although we still have our jobs, we still had to look at our financial situation to see if it would be a good move to buy the house. Also given everything happening this year, you never know what could happen, and how things could  unfold next year; job security is definitely a concern for many. 

Which is why it’s important to assess your finances. 

Decide if you can afford to buy a home now

After looking at your financial situation, decide if you can afford to buy your new house. Based on our aggressive savings plan and our current financial situation, we decided we were in a good financial position to start the home buying process. 

Know what’s happening in the housing market

Take a look at the housing market to see what is happening in the market. Make sure to drill down on the housing trends and market conditions in the area you want to buy.

One thing I noticed is how volatile the housing market can be. Many factors affect market conditions, including the number of houses being listed for sale and demand for housing in each area.

Going into the house-hunting process, I didn’t think it would be so competitive. I thought due to covid and the high unemployment rate, people would shy away from buying homes. But it turned out to be the opposite. 

There is an intense demand for houses right now, making it a seller’s market. There is also a shortage of homes available for sale.

This meant we had to be very quick. As soon as a new listing hit the market that fit our criteria, we had to try and schedule an appointment to see it immediately.

Sometimes we couldn’t even see the home because the seller already got more than one offer as soon as it was listed. One seller had only one open house and got more than 14 offers in one day. 

This made it extremely competitive and more costly. Buyers pretty much had to make offers at or above asking price, and there wasn’t as much room for negotiation, or you would be outbid.

Other trends I noticed caused by the pandemic was that many people could now work from home and didn’t need to live in the city, so they left city life and moved to more suburban areas, coupled with low-interest record rates on mortgages this caused the housing market to be very competitive. 

Take a look at the market in your area to identify trends and develop a strategy for the house-hunting process. 

Compare interest rates

Of course, before you start house-hunting, you need to decide your financing options. If you aren’t paying cash, which most of us aren’t, you’re going to need to find a trustworthy lender offering a good interest rate.  

Record low-interest rates

Since the pandemic, there have been record-low interest rates. The average for a 30-year fixed-rate mortgage dropped to 2.80 percent. This was another reason the housing market is so competitive as home buyers look to take advantage of record-low interest rates.

Remember, the interest you have to pay back on your home loan represents a sizable part of homeownership cost. The lower your interest rate, the less you pay back over the life of your mortgage, so make sure to shop around to find lenders with the best rates.

Understand the cost of homeownership

Homeownership was a dream of mine, but it comes with a higher than expected price tag. As a first-time homebuyer, I didn’t know all the costs associated with buying a home. It’s not just the down payment. There is a truckload of other expenses that come with the home buying process, including closing costs.

Closing costs are fees paid at the end of a real estate transaction. They include:

  • Lender Fee
  • Appraisal
  • Credit Report
  • Tax Service
  • Flood Certificate
  • Verification Services
  • Borrower Identity Validation
  • Settlement or Closing Fee
  • Owner’sOwner’s Title Insurance
  • Lender’sLender’s Title Insurance
  • Recording Fees
  • Transfer Taxes
  • State Tax/Stamps

See what I mean? Closing costs can easily add an extra $10,000 to your upfront cost of homeownership. Many of these fees are non-negotiable, but there are some that you can negotiate or shop around. The lender fee can be negotiated with the lender, and you can also shop around for your title company. 

Like I said, I honestly didn’t even know all these fees and costs were rolled into closing costs, but it’s something that you should be aware of to help with planning the initial outlay of cash that is needed to buy your home. 

If you want to see an example breakout of some of the actual closing costs that go into the home buying process, check the link below in the description. 

Of course, there are many other factors to consider when buying your home, but I wanted to focus on some of the things that stood out to me when going through the home buying process during a pandemic.

Despite the pandemic, my fiancé and I thought this was the best time for us. We had been planning to buy a home for a while, and we didn’t want to put it off. We wanted to take advantage of the low-interest rates on mortgages.

Buying a home for the first time is a big decision, and the process can be stressful, but I hope you found some of this information useful. 

I genuinely believe homeownership is something we can all achieve. 

There’s nothing wrong with renting, but if you want to own your own home, I truly believe it’s something you can achieve with careful financial planning. 

If you’re interested check out my financial planning checklist for success.