Tag Archives: first time home buyer

5 tips for millennials ready to buy a home

Posted on November 4, 2016 | Leave a comment

Seek to reduce your debts with extra income.

According to the latest Federal Reserve statistics, overall consumer debt, including car loans, is now relatively stable. But student loan debt continues to soar and now approaches $1 trillion.

For anyone seeking to progress financially, cutting debt — including credit card balances — is an absolute must.

”The interest rates charged on most credit cards are ridiculously high. All that interest can eat you alive,” Blankenship says.

Unfortunately, many 20-somethings make only enough money to meet necessary living expenses. They’re very limited in their capacity to pay off debt or generate savings for a down payment. Given this reality, Blankenship recommends that would-be buyers consider augmenting their income.

”Think about taking a second job. Or try to get overtime at your regular job, assuming overtime is available,” he says.

Conserve funds by limiting your wedding costs.

Kristin Meador, a real estate broker who often works with young buyers, wrote a book designed to help clients save substantial amounts on their wedding costs, ”How to Have a Wedding Without Spending a Dime: Or at Least Very Little.”

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Don’t be frozen out of the mortgage market: New programs can help

Posted on September 23, 2016 | Leave a comment

Are you or someone you know needlessly missing in action this summer, leaving near-historically-low mortgage money at 3 1/2 percent to 3 3/4 percent on the table? You might be if you fit this profile:

•You’re renting, though your goal is to buy a home. But you assume you can’t qualify for a mortgage because today’s underwriting rules are so strict and inflexible.

•You don’t have a lot of extra cash in the bank and you seriously doubt that you could scrape enough money together to afford a down payment.

•Your credit scores aren’t great — just under 700 FICO — but that’s mainly because you’re young and don’t have a deep credit history.

Sound just a little familiar? Well, here’s some good news. Giant mortgage investor Fannie Mae last week revised and improved its low down payment mortgage plan known as HomeReady. Fannie’s competitor, Freddie Mac, has a similar program known as Home Possible Advantage. Either one could be key to your getting out of your rental apartment and buying a house or condo by early fall.

Check out the basics of Fannie’s program. Start with the 3 percent down payment. There’s no minimum cash contribution requirement out of your wallet as long as you’re buying a single family house to live in. You can supplement your cash on hand with gifts from relatives or other sources. You can also increase your effective income for mortgage qualification purposes by including so-called “boarder” or in-house rental payments. Say the rowhouse you want to buy downtown has a long-term tenant in a basement unit who would like to remain in the house. That rent could count toward your income.

Another flexibility: Say you’re part of an extended family and you expect to have other household members living in the house with you who earn incomes but don’t want to be on the mortgage note as a co-borrower. You can use their documented earnings to increase the maximum debt-to-income ratio (DTI) you’re allowed on your mortgage.

disclaimer: for information and entertainment purposes only

Tips for first-time buyers

Posted on June 6, 2016 | Leave a comment

SAVE, SAVE, SAVE

Buyers should plan to put at least 20 percent down in order to be taken seriously. That’s right, for a $500,000 apartment, you’ll need a down payment of $100,000, and that does not include closing costs.

Be prepared for other charges large and small. Among the larger is the 1 percent surcharge on sales of $1 million or more in New York City, known as the mansion tax. Among the smaller incursions on your wallet: the co-op lien search fee (roughly $300), the board package fee ($500 to $2,000), the appraisal ($300 to $1,500), the condo municipal search ($350 to $500) and so on. Brokerage firms including Douglas Elliman and Town Residential offer a laundry list of estimated closing costs on their websites.

CLEAN UP YOUR CREDIT

Unless you are sitting on a substantial nest egg or are being financed by a benevolent relative, you will need a loan to afford your first place in New York City. Banks use credit scores, also known as FICO scores, to evaluate the potential risk of lending to individuals. The higher the number, which runs from 300 points to 850 points, the better your credit score.

Knowing your score well in advance will give you time to clean up any mistakes, like tax liens that were paid off many years ago or parking tickets that should have been expunged, said Peggy Dahan, an associate broker with Siderow Residential Group. “Sometimes it takes months to clear it up, and by then the seller has sold your dream apartment and we are back to Square One.”