Newbie Homebuyers Face New Challenges
It’s the best and worst of times for New Yorkers looking to invest in their first homes, according to the cover story in Sunday’s real estate section of the Times. On the one hand, there’s less competition for properties, prices aren’t skyrocketing, and mortgage rates are low. On the other hand, lenders are wary of…
It’s the best and worst of times for New Yorkers looking to invest in their first homes, according to the cover story in Sunday’s real estate section of the Times. On the one hand, there’s less competition for properties, prices aren’t skyrocketing, and mortgage rates are low. On the other hand, lenders are wary of giving mortgages to would-be borrowers with less than stellar credit (700 is the magic credit history number; any lower than that, and lenders aren’t going to be falling all over themselves to issue a loan). As a result, some first-time buyers are getting creative. One buyer in Clinton Hill, for example, probably wouldn’t have gotten banks to approve his purchase of a $427,500 condo since his credit score was less than 700 and he only had $20,000 saved for a down payment. HSBC gave him a loan, however, because it has a program for ZIP codes with large minority populations and the buyer’s income was high enough to cover monthly mortgage payments. Another couple profiled in the article had their closing delayed despite the fact that they had good credit because their lender wanted them to take an online course about their mortgage (what a drag!). Any readers having troubles securing their first home loans?
Jitters for First-Time Homebuyers [NY Times]
Photo by bonddidwhat.
12:50, Might you consider giving up your car and phone? I know that giving up a vehicle is hard to do but if you don’t have a car payment, car insurance or upkeep (gas and maintenance) for your car, you might save about 500-600 monthly. Use your cell phone as your home phone, that might save an additional 60. Get rid of cable which was another 75 monthly. Don’t use a flatscreen HDTV they use more electricity than older models and use AC sparingly. I did all of the above and I also got a second job. I know everybody’s situation is different but it was worth the temporary sacrifice to purchase my own home.
prices are NOT up in all of NYC.
We looked at a house last year, and a comprable house is on the market for the same price.
Prices are leveling off and dipping a little bit in some nabes.
if your “nut” is 5k and you can’t save, lower the nut.
and yes, prices are up from last year.
PutnamStoner – do you have to be a first time buyer? I’m thinking about refinancing from 7.25%… wondering if it’s worth it to pay those closing costs agin after only a year and half….
then you must be double paying on gas 😉
i’M 12:50 (FIRST ONE)
my rent is 1,600 for a 2-bedroom, which I think is a great price. I’m just saying everything adds up. This city is expensive even if your rent is not that high.
12:50 (first one) – move to queens for a couple of years and save the difference. rent has to be the biggest chunk of that…
12:26 is low on closing costs. 4% for resale, 6% on new. i just walked from an offer on new construction b/c i didn’t realize that, and the upfront cash i would have to piss away was just too much for me to stomach. btw, i had 10% down, but will not try again until i have 20% + another 50-60k in the bank above that for closing costs and pad. new construction is for the financially inept. i will pick up anyone underwater on one though. also, i called many banks and the terms for anything less than 20% down are getting very unfavorable by the day. this does not bode well for 08 prices. there will be no support from the marginal buyer.
It costs alot to live in NYC. We just did our year end finances and I was shocked to realize how much we spend on the neccessities.
-Rent
-Elec
-Gas
-Telephone
-Cell Phone
-Health Insurance (we pay our own)
-Food
-Transportation
-Car Payements(yes, we have one)
-Car insurance
-Gas
-IRA Contributions
And we’re at a grand total of almost $5000 a month.
We’re slowly saving for a home, but at the rate we’re going, I think a Co-op will probably be the answer for us.