Buying a home is one of the biggest decisions you’ll make in life. We’re here help to make the purchase of your home as easy as possible so you can Live Who You Are.
How can I prepare myself for the buying process?
Purchasing a home is exciting but there's a lot to consider. Take time to define your search parameters like price range, location preference, type of ownership (co-op, condo, etc.), size of property and building amenities, if applicable. Prioritize your needs (i.e., space, light, views, schools, etc.) but try to be flexible. In evaluating your budget, know what you can spend on a down payment as well as monthly expenditures like maintenance or common charges, real estate taxes, monthly mortgage, utilities, parking, etc. Find the right real estate professional to help navigate you through the process, speak with a mortgage lender to obtain written pre-approval for a loan, and choose an attorney experienced in NYC real estate.
What is the difference between a condo and
Co-ops are owned by a corporation. When you buy a co-op you're buying shares that entitle you as a shareholder to a "proprietary lease" in a particular apartment. Shareholders pay a monthly maintenance fee to cover building expenses including real estate taxes. Approval is granted by a board of directors, and all prospective buyers must submit a "board package". The board will also require an interview. A condominium is real property, and a purchaser is given a deed. Besides owning the apartment, you also own a small percentage of the building's common elements like the halls, stairwells, etc. Each individual apartment gets a separate tax bill from the city. There is also a monthly common charge for building expenses. Financing and subletting terms can be more flexible in a condo than a co-op.
How to determine your monthly payments
There are many online Mortgage Calculators to help you figure out what your monthly mortgage payment amount will be. This will give you a better understanding of what price range to look in for the apartment you want to buy based on your other debt obligations and your income. You’ll need to have some general information to put into the calculator like your interest rate, the amount of the loan, the amount of your down payment, and the length of time you are planning to borrow the money for. The monthly payment shown does not include your property taxes and homeowners insurance. Your mortgage lender may require you to have an escrow account—a separate account from your mortgage loan where you pay extra money every month for these expenses.
Are there different costs when buying a new development?
Transaction costs may be higher when you buy in a new development. Terms vary by project, but sponsor sales often add around 2% to the transaction's closing costs. The biggest chunk will be city and state property transfer taxes (usually 1.825% of the purchase price), traditionally a seller's expense that will often be shifted in the purchase agreement to the buyer in new developments. These expenses cannot be rolled into a mortgage, so buyers will require more out of pocket at closing. Also, the lender will see the closing costs as a reduction in a buyer's liquid assets after closing, which may affect how big a mortgage the buyer qualifies for. Buyers will likely have to pay these fees again when they sell. Still, many are comfortable purchasing new construction based on timing and the value of living in a brand new home.
Should I get
pre-approved for a mortgage?
Yes! Getting your financing in place before you look for a home will save time and help ensure a smoother transaction. Meet with a mortgage broker to ask questions about the loan process and arrive at a comfortable price range. There are two levels of endorsement during this process – pre-qualification and pre-approval. Pre-qualification means you are potentially qualified for a stated loan amount, assuming full and accurate disclosure, while pre-approval is more appealing to a seller. To get pre-approved, you must provide your mortgage broker with information for a detailed background and financial check (including tax returns, credit check & income history). You'll then get a letter from the lender stating the amount of your loan. This commitment is usually valid for about 60 days.