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.
It’s time to take the plunge and begin purchasing your first home. You no longer have to listen to your parents’ nagging or feel envious of your friends who have already bought their places. After diligently saving the last few years, you are finally ready to step up your adulting game and become a first-time home buyer in NYC. To help make sure you get prepared, here are seven tips for first-time buyers. Use it as a guide to save time and money when purchasing your first place in NYC.Several programs can be utilized to optimize your options. They apply to specific professions and vary in qualifications but are worth looking into if you qualify.
It is never too early to start saving. New York City is one of the greatest cities in the United States (arguably globally). But it’s also one of the most expensive places to buy an apartment for first-time buyers. Sales prices are high when you purchase a condo or co-op in NYC.
Also, the down payment requirements – generally 20% – make saving as much as possible extremely important.
Many first-time condo buyers think they can get away with putting less down, which is rare in NYC. Even select condos that accept 10% down payments are less common. Most co-ops in NYC allow maximum financing of 80% (20% down payment).
But some co-ops can have even stricter requests of 30% or higher down payments. You can save money on the property you plan to buy.
First, you should save cash for a down payment. Then make sure to responsibly pay off or pay down your credit cards or any other high-interest rate revolving debts. If you are pursuing a co-op or condo purchase, the co-op board and your mortgage company will evaluate your debt-to-income ratios.
When doing the math and organizing your financials, besides the purchase price, it is essential to consider all payment and closing costs.
These closing costs can vary from one to two percent of the co-op purchase price and two to four percent for condos. And, in some cases, even higher for new construction condos.
You can estimate what you expect to pay with NestApple’s NYC Closing Costs Calculator.
There are several national and local first-time homebuyers program options. However, most are very hard to qualify for and enable you to purchase with a lower down payment.Here is an overview of the various home-buying programs New Yorkers have and explain how you can save money on your purchase:
Many articles on first-time buyers’ program options will include “conforming” loans backed by Fannie Mae and Freddie Mac. However, this is disingenuous as loans for second homes and investment properties can qualify for Fannie Mae and Freddie Mac. Furthermore, New Yorkers will find it tough to be eligible for the loan limits Fannie Mae and Freddie Mac set.
That’s because the Federal Housing Finance Agency determines the new maximum loan size for conforming mortgages (FHA or USDA loans)is $453,100 or $679,650 for high-cost areas like New York. This means most New Yorkers will not be eligible for a conforming mortgage.
Before getting too excited about different properties, you must understand what you can afford. It would help if you connected with a lender or mortgage broker to receive a pre-approval letter. They will verify your income and check your credit score.
To obtain a pre-approval letter, it is recommended that you reach out to a mortgage broker. They will verify your income and assess your credit score.
They will request more financial documentation about your income, assets, and liabilities. Mortgage lenders vary in size, cost, and efficiency. Working with the top-tier producer of a specific institution will make a tremendous difference throughout the process.
A pre-approval gives you a clear understanding of how much you can spend on an apartment and enables you to act quickly when finding a suitable apartment. It’s customary to submit your pre-approval letter when you make an offer.
Most first-time home buyers start their searches with criteria that might be too narrow and are forced to expand later. It is best to keep an open mind when you begin your apartment search.
When looking for the perfect neighborhood that suits your personality, commute, and budget, it’s essential to consider multiple options.
This allows you to discover more properties and increases your probability of finding “the one.” You can start searching with your customized property feed.
With over 8.5 million people competing for a place to live in NYC, purchasing an apartment in this city will be as competitive as finding a rental. It likely won’t last long if you see a well-priced condo or co-op in your budget.
In the case of multiple offers, there will be a bidding war; here are tips for winning a bidding war in NYC.
Buying a home will probably be your most significant investment as a first-time buyer. Therefore it’s crucial to receive advice from someone with your best interest as a priority. The best action would be to hire a buyer’s broker to represent you.
A buyer’s broker assists with your search and explains the documents you must compile (including your mortgage pre-approval and REBNY Financial Statement).
They guide you through the negotiation process when making an offer, prepare your board packages and more. Plus, a buyer’s broker is an advocate for your interests. If you deal directly with a listing broker, you may want to be wary of a dual agency.
Remember that the listing agent represents the seller, may not be loyal to you, and may advance interests adverse to yours.
Did you know you can receive cash back from your real estate broker? Yes, it’s true – you can benefit from a commission rebate when you buy a condo, townhouse, or co-op apartment.
NestApple is a real estate technology company on a mission to save people money when they buy a home. First-time home Buyers in NYC can receive a commission rebate of up to 2% of their purchase price.
For example, buying a $1,500,000 apartment could receive up to $30,000 as a commission rebate. When purchasing an apartment in NYC, getting money back from NestApple is pretty sweet. You can use that additional money to furnish your new apartment, cover your closing costs, or add to your savings.
Purchasing an apartment for the first time in NYC may seem overwhelming, but if you are already researching and preparing for the process, you are ahead. Ask questions and get advice from a local real estate agent.