As the world continues to be ravaged by the COVID-19 pandemic, we are witnessing dramatic changes in the country’s economy. This would normally be the time of year when a wave of new homes appears on the market, complementing the freshness of Spring and the start of a brand-new year. This year, however, is markedly different.
Instead of “Sold!” signs standing in brand-new lawns, we are seeing another crash of the housing market, in a year in which it was poised to grow substantially. This leaves many in limbo, wondering what to do in an upside down housing market now as they’ve been preparing to sell or buy a home. There are few things you can do to get through this tragic time.
What Does it Mean for a Mortgage to be “Upside Down?”
You may have heard the phrase “upside-down” in reference to a mortgage or a car loan but may be unsure of what it means. When someone is upside down on a mortgage, this means that they owe more on the home than its current market value. This means that they have negative equity. With the housing market taking its current downfall, those who were looking to sell their homes may now be in fear of losing value on their price point.
Still, do not be discouraged. In 2019, the median home price increased by 6.2%, an all-time high of $258,000. Once the economy reopens, many experts are expecting the housing market to regain stability relatively quickly.
Recognize That Opportunities Remain Available
Whether you are looking to buy or sell a home, you must realize that the world has not stopped entirely. There are still individuals and companies looking to sell homes, and individuals that need to relocate, whether it be for family or a new job, for example. Even for those who are not looking to relocate at this time still may need to refinance their mortgage.
If you are currently stuck in circumstances that have caused you to be upside down on your mortgage, you can still refinance your home. Normally, this would be extremely difficult to do. Now, however, government authorities are offering assistance to homeowners in the form of refinance programs. Certain conditions must be met, however:
- Your home mortgage should be owned or supported by Freddie Mac of Fannie Mae.
- Your payments must be current.
- You can only be turned upside down by no more than 125%.
For those in need of a new home, available homes have not disappeared – you must simply change how you are searching for them. Many homebuyers do their shopping online, through platforms such as Zillow and Google.
This way, you can stay updated on the current market conditions and even receive the guidance of licensed brokers and realtors, all remotely. The process of buying or selling a home doesn’t have to stop due to the current pandemic. By refinancing, and either shopping or listing your current home on online platforms, you can continue your move smoothly, despite a slowing market.