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.

How Much Do You Need To Buy An Apartment In Brooklyn?

Go Back To Previous Page

Brooklyn real estate couldn’t be hotter if it tried. This area is famously trendy and a great place for families that want to enjoy all the finer things inDumbo, Brooklyn - Buy An Apartment In Brooklyn life. Renting an apartment is a great way to live in New York, but sometimes, you might want to own your apartment. In NYC, intelligent real estate investors are now looking to buy their apartments. If you’ve ever fallen in love with your apartment to the point that you’ve wished that you could buy it, you might understand the appeal of this option. The biggest issue with this potential project is that you will need to have a lot of money to make it happen. But, how much money is enough to buy an actual apartment in the BK? We will explain the financials about how to Buy An Apartment In Brooklyn. How much does an apartment in Brooklyn cost to buy?

Are You Ready To Buy An Apartment In Brooklyn?

How much to buy an apartment in Brooklyn? Before you even consider buying an apartment, you need to figure out if the buying life is right. Buying an apartment has very similar requirements totax calculations for depreciation buying a house. You either will need to pay cash for the apartment, or you will have to qualify for a loan.

This means that you need to make sure the following things are true:

  1. Your debt-to-income ratio is lower than 50 percent. The lower, the better. Most lenders will not even accept applications with a DTI ratio above 50.
  2. You have had a steady income for the past couple of years. Most will need to see proof of employment for the past two years, minimum. If you have a freelance career or a company, you may need to bring in several years of tax returns to prove that you are good to go.
  3. You will need to have enough money for a down payment. This is often the biggest hurdle. It needs to be a large percentage of the apartment in question. A higher down payment means that you would have a higher chance of getting your purchase approved.
  4. Your credit score should also be good. An ideal credit score for this would be 740 or more. You can still get approved for subprime loans if you have a score as low as 550, but it can cost more in terms of down payment. If you have a credit score below 500, you won’t get approved for a loan.

How Much Of A Down Payment Should You Have to Buy An Apartment In Brooklyn?

How much does an apartment in Brooklyn cost to buy? Down payments can be pretty hard to come up with, especially if you are new to real estate. If you want to get a traditional loan for the apartment youMan with Mortgage Adviser. closing cost for seller in nyc want, you will need to have 20 percent of the apartment’s price lined up as a down payment. For a $500,000 apartment in Brooklyn, this means you will need to have $100,000 for a down payment.

However, certain loan types (like FHA loans, for example) will allow you a lot of leeway in terms of your savings. It’s possible to qualify for an FHA loan with as little as 3.5 percent of the money down. With an FHA loan-type model, you would only need to have $17,500 for a down payment on a half-million-dollar apartment.

If you are a veteran, you might be able to get a loan without any down payment whatsoever. However, this is pretty rare.

What Do You Need In Terms Of Closing Costs?

Most home buying articles note that you will need to have a down payment before putting an offer on your home. That’s great and all, but that doesn’tBrooklyn heights - Buy An Apartment In Brooklyn mean that you have everything put together. You also will need to have some money set aside for closing costs and fees.

How much you should expect to pay depends on the type of apartment you want to buy. Here’s what you need to be aware of:

  • Co-ops will have lower fees than condos. The typical closing fees will be between 1 to 2 percent of the purchase price.
  • Condos often have higher fees as a result of specific bylaws in their HOA. This may include adding fees for the transfer of papers and fees for entering into specific counsels. Most condos will require an additional 2 to 6 percent of the purchase price.
  • Contact the condo or co-op where you’re buying directly to find out exactly how much you should save. The local housing board will be able to break it down, fee by fee.

How Much Will Most Condos And Co-Ops Require For A Traditional Purchase?

If you want to get a traditional loan, you will need to save up anywhere from 21 to 26 percent of the home price. The rest is usually handed via financing. This often means that you will need to save up for several years before making a home purchase. Thankfully, there’s always a way to ensure that you get the most out of your savings.

How Can You Get Help Saving to Buy An Apartment In Brooklyn?

If the idea of saving for an apartment is a great thing to you, you’re not alone. Unfortunately, apartment down payments can be prohibitively high in New York City. Thankfully, there are tools that you can use:

  • Auto-Saving Tools. Tools like Qapital are excellent for apartment purchases. Acorns is another that you can use if you’re okay with having your savings tied to stocks. YNAB and Mint also offer similar tools.
  • Ask For Gifts. Do you have a wealthy family member? If so, you might want to swallow your pride and ask them for help with your down payment. A written letter saying that this is a gift will help you tax-wise and make it possible.
  • NYCHA Programs. New York City also happens to be one of the best places to live if you want to help become a homeowner. New York’s HUD Department offers links to the NYC Housing Connect for affordable homes and access to programs designed to help you save up.
  • Buyer Rebate CommissionsTechnically this won’t help with the down payment, but it will give you cash back! NestApple offers this, by the way.
  • 211. To find out about down payment matching programs in NYC, you can also dial 211 on your phone. They’ll hook you up with a social worker who can help.

Should You Talk To A Real Estate Agent About Your Financials?

Of course! If you want to buy an apartment, co-op, or condo in New York City, you need to know what options you have at your hand. Telling your real estate agent about your financial situation is a great way to make sure you get as much advice as possible to help pair you with the right home, the right mortgage, and more. If you’re ready to buy and want to save cash on fees, call up an agent as soon as you can.



Written By: Ossiana Tepfenhart

RSS Feed