Can’t pay for rent or mortgage this month? Here’s what real estate experts say you should know

Even under normal circumstances, keeping a roof over your head is a top financial priority. But the coronavirus has complicated the situation for both homeowners and renters.

Millions of Americans are worried about whether or not they’ll be able to make their rent or mortgage payments, and they also have logistical questions around whether state stay-at-home orders and social distancing guidelines will make it difficult to obtain a mortgage, sell their home, or move.

To get some answers, Grow talked to Chris Salviati, a housing economist at rental marketplace Apartment List, and Ben Mizes, the founder and CEO of Clever Real Estate, a service that connects prospective buyers with real estate agents. Mizes is also a Missouri-based real estate agent.

Below, they offer their advice on some frequently asked questions about Covid-19’s impact on real estate, renters, and the housing market.

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Once the crisis subsides, Salviati says, the housing market should bounce back quickly. “The economic instability occurring right now is not rooted in the housing market, and the long-run fundamentals of the housing market have not changed in a substantial way,” he says. 

But younger, lower-income folks could see more negative effects in the form of ”greater competition for affordable housing in both the rental and for-sale markets,” Salviati says. And ongoing “economic uncertainty is also likely to put homeownership further out of reach for many younger millennial and Gen Z renters.”

Whether or not it’s wise to purchase a home given the circumstances will depend completely on your individual circumstances, experts say. 

“If you have enough in savings to cover a down payment and still be comfortable if you were to lose your job or take a pay cut, buying in the next few months might be worth the investment as prices are dropping,” says Mizes. The housing market should bounce back within 24 months, at worst, he expects, “so buying when prices are low is a good idea if you can afford it.”

Although prices might fall in the short term, it’s only smart for you to buy if you’re secure, moneywise, Salviati says: “It could be best to delay any homebuying plans until you have more confidence in your financial stability.” If you decide to delay your purchase, keep padding your savings and stay on top of your credit score, as both will help you later on when you do decide to search again.

The experts say that the coronavirus outbreak could make it more difficult to get a mortgage. “Some lenders have tightened their standards by increasing required FICO scores and issuing fewer mortgages overall,” Mizes says.

People who have lost their jobs or seen a disruption in their income could see their odds of securing a home loan decrease.

Salviati says that those who may have had their down payments invested in the market may have taken a substantial hit, too, making it harder to secure a mortgage.

“Anyone who had their down payment savings invested in the stock market has learned a hard lesson about investing money that needs to be accessed in the short term,” he says.

The experts agree: If you are having trouble making your monthly housing payment, the best thing to do is to get in touch with either your mortgage issuer or your landlord.

“Many landlords and lenders have still been willing to negotiate with their tenants,” says Salviati. “If you think you’ll have difficulty paying your housing bills, it’s best to reach out to your landlord or lender as soon as possible to try and work out a solution.”

For homeowners, it’s possible that you may be eligible for forbearance or payment deferrals, which can buy you some time. Renters may be protected from evictions for a few months, but again, it’s best to reach out to your landlord to see what they can do.

“The best advice is to get in touch with your landlord or property manager as soon as possible,” says Mizes. “It’s a tough time for everyone, and many landlords are willing to make changes in payment agreements to help out their tenants, even if they’re not required to.”

The short answer: Maybe.

“If your mortgage is backed by the federal government (e.g., Fannie Mae, Freddie Mac), you’re exempt from foreclosure for now under the CARES Act. You’re exempt from evictions if your landlord’s mortgage is federally backed or you live in federally designated low-income housing through the Act as well,” says Mizes. 

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Many cities and states have also put in eviction and foreclosure moratoriums, but you’ll need to check with your local government to see what applies to you. And don’t forget, says Salviati, you may have to pay up eventually.

“While many are protected by these moratoriums, any missed payments will still be owed once the moratoriums are lifted,” Salviati says. “So, if you’re still financially capable of making your rent or mortgage payment, it’s best to continue doing so.”

If you don’t have to move during the pandemic, it’s probably best that you stay put. But if a move can’t be avoided, Salviati says “it’s important to take as many precautions as possible.” 

If you’re able, use technology to your advantage. “Many properties and online platforms are offering virtual tours and 3D floor plans, so there are more ways than ever to evaluate a home from a distance,” says Salviati. But he warns that you should be careful: “Verify as much as you can about the property, because rental scams are more prevalent among sight-unseen moves.”

As for the actual move itself, you should still be able to hire professional movers — but do some research first, Mizes says. “Moving companies are considered ‘essential,’  but it’s a good idea to call ahead to find out what they’re doing to be extra cautious during this time,” he says.

“Otherwise, try to use new boxes, keep trips to the store for moving supplies short and infrequent, and be safe.”

The article Real Estate Experts Answer 6 Coronavirus FAQs From Homeowners and Renters originally appeared on Grow by Acorns + CNBC.