'Fail to plan, and plan to fail.' Ok, ok, I know what you are thinking, just some more annoying self help blah blah blah. We I don't even know who to credit that quote to but come on, we all know it is true, and we all know that PLANNING is the key to success, and in this case HOME OWNERSHIP!
First of all, right now is a great time to buy, interest rates are rock bottom, housing prices are low, and home ownership offers the ability to put your money towards equity in a home rather than rent. We all know the additional tax advantage mortgage interest offer, not to mention the pride and satisfaction that comes with home ownership, personalizing your space, and avoiding broker fees. BUT WAIT, WAIT, WAIT, WHERE DO I START?
I recognize the process of purchasing real estate in Manhattan can be complex and overwhelming. Trust me on this one, I went through it myself. I assure you that with good preparation and breaking it down into steps it doesn't have to be. While I started this blog to sell my own property, I also would like to offer some advice and resources on planning for your FIRST NYC purchase.
So here are a few suggestions for whatever its worth to you:
1. Educate yourself.
"Knowledge become power only when we put it into use."
Attend a First Time Homebuyers Education Course, there are several throughout all the boroughs offered by the New York City Department of Housing Preservation and Development (HPD). http://www.nyc.gov/html/hpd/html/buyers/classes.shtml
UHAB also offers Home Ownership classes specific for HDFC's http://www.uhab.org/homeownership/application-intro-class-registration.
One more, http://www.housingpartnership.com/index.php?option=com_content&view=article&id=84&Itemid=498
2. Save (and FIND!) a Down Payment.
Most co-ops require a 10-25% down payment. My co-op for sale is only a 10% down payment required. This is very low considering other co-ops. For the best interest rate on a conventional mortgage it may be favorable to have a 20% down payment, depending on credit and interest rates. This can come from savings, gifts, and WAIT FOR IT, WAIT FOR IT, WAIT FOR IT.... yes, that is right THE HomeFirst Down Payment Assistance Program
Did you even know NYC offered such a thing? Yes it is true, if you make under certain income limit you may qualify for up to $15,000 towards your down payment and it is completely forgiven once you have lived in the home for 10 years!
Yes, that is right, free money people, FREE! That means if you have some savings of your own but perhaps not enough for a 10% or 20% Down Payment there is help, and it is totally FREE! This is your tax dollars at work, so take advantage!
BUT WAIT, it just keeps getting better, there's more, you also may qualify for a SONYMA loan which offers Down Payment Assistance as well! To find out if the co-op you are interested qualifies for SONYMA financing read here.
You thought that was all didn't you? It's ridiculous but there is one more avenue to explore on the giving away money for Down Payment path here. Any one ever heard of GRANTS???? Yes completely, 100% forgivable GRANTS!
Seriously, it is worth any amount of time to see if you qualify for these programs people, we are talking about FREE MONEY towards your new totally awesome NEW YORK CO-OP. See, I told it was possible, it just requires a little work and research.
A fabulous website for DOWN PAYMENT ASSISTANCE http://americandreamdownpaymentassistance.com/state.cfm?code=NY.
2. Closing costs - generally these run about $3,000-5,000 and include:
attorney fees (roughly $1200-1600),
lending fees such as discount/origination fees (varies depending on loan product and bank),
appraisal (roughly $400),
bank attorney (roughly $350)
Short Term Interest (roughly less than one month of mortgage payment)
Closing costs can be payed out of pocket, or sometimes rolled into the loan.
Where will I get a loan?
Great Question, most large banks will offer a loan for a co-op and the special financing spoken of above.
Bank of America
Citibank
JP Morgan Chase
and lots of others...
Another great resource for NYC homebuying: http://www.nyc.gov/html/hpd/html/buyers/nychome-buying-process-mortgages.shtml
