Does anyone have any advice for a first time home buyer in NY?

Question

I am looking to buy a condo in Brooklyn or Queens within the next couple of years. My boyfriend and I have a combined income of about 150K a year. How much would we need to save for a down payment and closing costs. We are looking to have a mortgage that is around $1500 which is a little less than what we spend now for rent.

I don't even know what we can and cannot afford to look into. Also does being legally married have any impact on buying a home for the first time? I am also a minority, are they any programs that help first time home buyers with any costs?

Any info would be great :)

Answer 1

Make sure you get fix rate mortgages. Adjustable Rate Mortgages may sound good, but their interest rates will increase after the initial period.

Try to make a down payment of 20% to avoid Private Mortgage Insurance.

CitiMortgage is a good company to get a mortgage from.

Answer 2

Sounds like some pretty good advice. I second the 20% down if possible because you will avoid paying mortgage insurance. I don't necessarily agree with the person who said pay it off as soon as possible. That depends on how old you are and how quickly you want to be done with housing payments and probably about a hundred other things. Most loans today have no prepayment penalty, meaning that you can always pay a little extra with each payment and have that extra applied towards your principal.

An adjustable rate mortgage (ARM) is not necessarily bad so long as you understand the terms of the loan. Many ARM loans are fixed for a number of years (1, 3, 5, 7, or 10 are common). If you're only going to live in the place for 5 years, a 5:1 ARM or a 7:1 ARM could be perfect because they'll have lower interest rates for the time you're planning to live there.

An interest only loan is almost always one to avoid because you will never get any closer to the finish line.

I think you're smart to look for a cost similar to your current rent. Don't forget to include property taxes, insurance, and a maintenance reserve in your expected housing costs. While the rule of thumb is 35% of your gross income, that is a maximum. Imagine how much your lifestyle would have to change if you were paying $4400 per month (which is 35% of your $150,000 gross income) on housing.

The last bit I'll share is a tactic I use to get the lowest loan fees. Call 10-12 lenders and ask about their products. You can let them know your name, a little about your situation, and whether or not your credit is good, bad, or somewhere in between. Do NOT give them your social security number or any personal info. If they push too hard for that, thank them and then hang up. Ask them to provide you a Good Faith Estimate. After a couple you'll start to have a feel for what type of loan you want (fixed rate, ARM, etc.). From the dozen or so lenders, take the top 3 or 4. Use their numbers to pit them against one another. Tell them things like, "You've got pretty good closing costs, but this other guy can give me a quarter point (0.25%) lower interest rate for about the same closing costs. Can you beat his rate?" You'll know you've pushed them as far as you can when they start telling you to take the other guy's deal. You can bluff a little, but be prepared for them to call you on it. Once you've selected a lender, be prepared to show him just about every financial tidbit about yourself - so make sure it's someone reputable.

Answer 3

As a fellow New Yorker here is some advice. First you will need a large downpayment to get your mortgage to be $1,500 per month. You will have a mortgage amount of about 238k at 6.5% for a 30 yr loan . Closing costs are around 6% in NY and you could ask get a sellers concession which the seller pays for closing costs in exchange for a higher asking price (closing costs +original sales price). The condo range is about 300k-500k on average depending on where and how many bedrooms. Experts say that you should be spending 35% of your gross income per month on housing to be affordable. It really depends on you and your spending habits. In NY renting is 50% cheaper than owning. You also have to take into account there are maintenance fees, taxes, insurance, & parking fees (possible) on top of your $1,500 payment. Another alternative is a co-op and they are cheaper but you will pay higher maintenance fees and most likely have to be approved by a board. To sum it up I would see how much you can pay on top of the 238k in order to get the $1,500 mortgage. If you need help e-mail me.

Answer 4

about 10% is the down payment on a home. When you take out a mortgage, make sure you can take it over the least number of years, if you pay weekly or biweekly you are paying more on principal and less on interest. the less the number of years can make the difference of a few dollars extra a month but save you big on interest in the long run.

Answer 5

Have the biggest down payment possable