FHA/First-Time Discounts
I’m half debating maybe trying to get into the “home” owner space due to (slight) market declines and the never-ending question of how long am I going to throw my money into NYC rentals owning nada at the end of the day. So I’m thinking of $300-$500k, depending on 1BR or 2BR (and I’m so…
I’m half debating maybe trying to get into the “home” owner space due to (slight) market declines and the never-ending question of how long am I going to throw my money into NYC rentals owning nada at the end of the day.
So I’m thinking of $300-$500k, depending on 1BR or 2BR (and I’m so far away from actually looking, so really – BRs don’t even matter at this point). I will have no problem paying the monthly mortgage, have good credit, etc.
However, I cannot afford a 20% downpayment (I’m not even close). I know that a lot of places are becoming FHA approved, which is 3.5% down (a lot more my speed) but how do I know if I’d even qualify for this? (I make ok money in corporate america, just have no savings cause of grad school). Are there other ways that I could make this downpayment happen? Other than begging my parents… which I also plan to…
Thanks
My partner and I just bought FHA approved “luxury” condos in Crown Heights. We think it is the right time to buy. We had all of these factors in our favor: low prices, low interest rates, seller’s concessions, and a government tax credit. That all doesn’t come together at once very often. I suggest you start looking in BK at what is out there on the market. Even just eye-balling ads. We were looking at brownstones for a long time but decided to go the condo route instead because we didn’t want to deal with a lot of maintenance and renovation. The new places we found are great. Spacious (for the price), outdoor space, W/D in unit, etc. Two years ago this deal would not have existed. I only put 5% down. Good luck!
Thanks for all the input, esp. that link coop (maybe they’ll talk to me and give me a better perspective).
So basic, back of the envelope calcs show me that with roughly 15% down, monthly payments are only about $600 more than what I’m paying to rent.
My lease is up in June and my roommate and I may have to part ways and thus I’d move into a 1BR/studio and my rent would go up at least $400/mo. So thoughts are – for an extra $200-$300/mo, shouldn’t I strongly consider BUYING?
Denton – sadly, you’ve got it wrong, I live in a nice place now – 3yo bldg, big, hardwood floors, WD in apt, etc. That being said, I’d be looking at something similar.
Blackie – yes, the only thing I lack is the downpayment – I make up for it in a wide array of shoes, jeans and having eaten/drank at some kickass places. :\
All this advice and insight is great – LOVE reading about RE, but I know very little about actually buying…
Do I even open the can of worms and ask for advice on MY situation renting v buying? (i.e. minus my downpayment, would only cost me a few hundred more/month)
blackie blackerson has got it right. FHA and Condo is difficult at best. No coop and actually a lower DTI threshold for FHA loans.
Leaving aside any personal judgments on the wisdom of whether or not to buy right now, and getting to your question . . .
If you have the income to afford the monthly mortgage payment, maintenance, and taxes, but your only problem is a lack of downpayment, then FHA might be a good idea for you. Although FHA also helps people with bad credit scores, it’s probably a bad idea for anyone with bad credit to be buying a home.
Qualifying for an FHA loan (on a condo) has more to do with the building than with you, assuming you meet the criteria above.
A few things to keep in mind:
– you can’t get an FHA loan on a co-op
– for condos, the whole building needs to be approved (you’ll hear references to “spot approvals”, which allow FHA loans in non-FHA approved buildings. Those will be discontinued in February, so don’t rely on that going forward).
– there are restrictions on the % of units in an FHA-approved building that can have FHA loans. The percentage keeps changing, so not sure what it is right now.
There’s lots of good information if you do a google search. Just make sure you understand all the rules ahead of time so you don’t get burned later.
op, bho is a perpetual housing bear if you check his other posts. Nobody knows if or when the ‘bottom’ is reached, altho you will find plenty of posters who think it has been in NYC.
There are some compelling reasons for you to buy now including low interest rates, the homeowner tax credit that expires soon, tax credits in general, and quality of life (chances are a new condo will be nicer than what you are renting).
No one’s ever bet long term against Manhattan and Brownstone Brooklyn prices and won. This isn’t Florida when you can just buy up another sugar farm and build 10,000 tract houses.
Don’t do it, Bklynight. RE prices are heading much further down after which you’ll find way better deals. Higher interest rates are not your problem as they will simply force prices down to fit the same monthly payment. Save and put more money down on a cheaper house. If you can’t put 20% down, you should not be buying. FHA is a mini bubble that will pop after summer if not before. You’ll see.
***Bid half off peak comps***
Check out these people:
http://www.nhnhome.org/
They know all about things like that. And they may be very happy helping somebody buy as opposed to helping somebody avoid foreclosure which is a lot of what they do these days..
they helped me get a very nice grant towards my closing cost.