As Covid-19 has spread throughout the country, thousands of families have struggled to pay their bills. Families have been forced to miss rent and mortgage payments on their homes and even face eviction or the threat of foreclosure as a result. Those saying that aid from the government has been too little have likely faced some of these issues.
So, how does one go forward as a homeowner during the coronavirus? What challenges will those buying a home now face going forward?
Here is a brief look at how the coronavirus has impacted the housing market and what financial struggles homeowners may face.
Handling a Mortgage
While consumer debt has decreased as a result of many stay-at-home orders, your mortgage may have changed, too. As of January 2019, American households owed a total of $9.12 trillion in mortgage debt. Since January of 2020, mortgages are one of the few major lines of credit that have witnessed an increase. However, depending on who your loan is with, there may be delays for monthly payments.
Not only that, but creating a new mortgage has become more difficult since negotiations are taking place virtually. Especially in the early months of lockdown, appraisers and real estate agents were deemed nonessential and unable to work at all.
Additionally, banks are becoming more strict when it comes to lending. Though the interest rates on mortgages remain low, actually getting approved for a loan is more difficult now than it was prior to the outbreak. This can be attributed to the economic collapse and historic unemployment rates that occurred this year.
Dealing with the Threat of Foreclosure
Similar to dealing with your mortgage payments, there may be help available for those worried about foreclosure. In 2018, 10% of mortgage holders in the states believed it was likely they would face foreclosure. With COVID-19 leaving many without jobs, that percentage is sure to rise.
However, depending on where you took out your loan, foreclosures may be suspended for the time being. Your servicer should contact you with plans for either adjusting your payment to make up for missed payments or to resume your typical monthly payment.
Purchases for the Home
The finances of your house aren’t the only thing you’ll have to consider. Chances are, you’ve already redone at least one room in the house since we’ve been sheltered indoors for the last five months. Being stuck at home is the perfect time for some cheap and easy home improvements.
For many, the most likely rooms to get remodeled are the bedroom and living room. In 2018, total furniture and bedding spending was estimated to amount to approximately $111.4 billion. While you may not have the finances to upgrade your furniture, you likely have the time to craft some DIY home upgrades.
Simple DIY projects may include moving around furniture or putting up some shelves to create more space. If you’re not changing up the house for your own aesthetic reasons, you probably needed to renovate a room into an office space. Consider shelves for this room to help make space for work belongings.
It’s safe to say that the coronavirus has had an impact on almost every aspect of your life, and it’s definitely played a role in your home lifestyle. Consider the options available to you and be sure to focus on the things you have control over until the pandemic ends.