The Nest

NestApple's Real Estate Blog

Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.

What Is the Average Down Payment for an Apartment in NYC?

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what is a downpaymentBuying an apartment in New York City is a slice of the American dream. It’s getting the apartment life you want in one of the greatest cities in the world. Saying that owning an apartment in New York City is a good investment is an understatement. It’s quite possible that it could be the best investment in your life. To get the apartment of your dreams, you’re going to need a down payment. How much is required might surprise you… The average down payment in NYC is 20% of the purchase price. It’s possible to put down 10% or less on many condos in the city. Most co-op apartments have stricter financial requirements which require a minimum of 20% down. Condo buildings in NYC often have minimum financing requirements as well. How much downpayment for a house or an apartment in NYC?

How Much Should You Put Down For A New York City Apartment?

New Yorkers love their apartments. They love them so much; a typical down payment might exceed what most people wouldcompare downpayment - how much downpayment for a house in nyc put down for a house in other parts of the country. Due to the high demand for apartments you can rent out, a typical down payment for an apartment purchase will be 20 percent. Sometimes, 20 percent is not a down payment that will suffice. This is especially true with co-ops. In this case, you may need to pay a minimum of 30 percent or more. Since the median price for all Manhattan apartments rests at around $916,000, this means that you should expect to pay an average down payment of $183,200.

Is It Possible To Pay Less Than 20 Percent Down For A NYC Apartment?

While 20 percent down is the benchmark for most apartments, condos, and co-ops, it’s not the minimum. If you have ancomparing among boroughs - down payment for apartment in nyc FHA 203k loan, you might be able to put down as little as 3.5 percent. However, this usually only works in communities approved for FHA loans and focuses on offering affordable housing for low to middle-income families. The issue with this is that apartments like this are that they tend to be low in numbers. So, there is a lot of demand with very little to go around. Some condos will also allow you to apply for a home with them for as little as 10 percent too, but the chances of getting approved are slim.

Why Are Sellers Rejecting Offers With Low Down Payments?

In the past, sellers were far more amenable to selling their homes for a low down payment in NYC. However, times have changed, especially over the past two years. There are several reasons why sellers might turn their noses up at low down payments. These include:

  • They get worried that the loan will fall through at the last minute. Lenders are such fickle people! While a preapproval usually leads to a loan being pushed through, the truth is that it’s not a guarantee. It’s not unusual to hear of a lender drop the approval due to low down payments. Should this happen, the seller will have wasted their time. A higher down payment could often prevent the loan from being panned, so they’ll choose the higher down payment.
  • A high down payment suggests more commitment. This is a subjective thing, definitely, but it’s still a typical assumption. A high down payment means you’re willing to go all-in on a home and that you’ll do what it takes to get the bid.
  • Many sellers also believe that a high down payment in NYC is a good sign of your financial health. Obviously, having that money amount means you know how to budget. This alludes to a better debt-to-income ratio, which means that they know you’ll be able to handle the house in a pinch.
  • Some sellers also worry about your financial stability during times of upheaval. People have seen a lot of broken deals due to COVID-19 and the Great Recession. Offering a down payment often gives both lenders and sellers peace of mind in knowing that your job will be able to stay intact through all the upheaval.

Can  You Use A Gift As A Down Payment?

You can! If you are lucky enough to have a wealthy uncle who’s willing to lend you a bunch of money, you can use it as a giftcalculator Down payment in NYC - how much downpayment for a house in nyc for the down payment of your home. However, there’s a catch. You still will need to prove that you are financially healthy aside from the gift in the form of liquidity. Additionally, anyone who wants to use a gift from a friend or family member as a down payment on their apartment will have to get a letter stating that the money is a gift for the down payment. So, if you want to use that cash, understand you’re not off the hook for the rest of your stuff.

Important Tips For Coming Up With A Down payment in NYC

If you want to buy a home, you’re going to need to put together a down payment. However, it’s not just something as simple as getting the money together. A little strategy goes a long way. The following tips will help give your finances the boost you need:

  • Do try to put down as much as you can, but don’t forget those closing costsAlthough down payments will get your foot in the door, having an emergency scramble to cover closing costs like moving or taxes can make things very rough. If you want to make things easier on you, use a closing cost calendar to figure out how much you should set aside.
  • Consider a bridge loanDon’t have enough money for a down payment? You might be able to get a small loan to “bridge” the gap between what your home loan price is and what your down payment should be. This generally requires you to have equity to put down. It’s a short-term loan that is meant to be paid off once your first apartment is sold.
  • When in doubt, ask for a lower price and use less of your down payment money. If you get a counteroffer, you can increase the down payment as needed to sway your lender. Otherwise, you would be out of luck.
  • If you are a meager income, you might also qualify for a down payment assistance grant. New York City has several major programs that can help you out. You can find out more at the NYC HUD.

What Happens If You Can’t Afford A Large Down payment in NYC?

How much downpayment for an apartment or a house in NYC? If the down payment price tags in New York City scare you, you’re not alone. While it may be harder to find a willing seller, there’s still a chance that you can get the apartment that you want to own. There are two things that most aspiring homeowners can do: they can either apply for assistance or pay mortgage insurance.

It’s absolutely normal to be at a loss when you hear how much the down payments can be. Talking to your mortgage loan officer and your real estate agent can help you figure out what your next step should be. After all, they’re there to help!

Written By: Ossiana Tepfenhart

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