If you have been considering buying a house, you will need to make sure you are really ready. There are often unanticipated costs, so before you dive in, read on to make sure it’s the right decision for you!
Our tips will help you decide if it is the right time, and help you get on track toward buying a New York house of your own!
Really Ready to Buy a Home in New York?
Know Your Debt
Before you begin even thinking about buying a house, you should have an accurate picture of your financial situation. What does your debt-to-income ratio look like? This is your fixed monthly expenses divided by your gross monthly income. A good DTI ratio is typically around 10-20%. 36% and above is considered risky for a lender.
Mortgage Application Fee
Some lenders, especially ones out of state, will try to charge an application or “lock” fee. These fees are often excessive and are not standard across the board. Before paying any sort of application fee, shop around for a company who will not charge these sorts of fees up front. If you have found the ideal loan, and this fee arises, always try and negotiate.
A home inspection is ultimately in your best interest and should ALWAYS be done. However, it will cost you money up front. Inspections typically cost a few hundred dollars. The price can go up if special inspections are needed. Ultimately, the inspection will tell you about any defect of the house, allowing you to negotiate the sale price.
Closing costs include a whole slew of fees you will need to pay at closing. Some of these costs will include:
- Appraisal fees. The lender will require the home have an appraisal and that it is valued at the amount they are lending you.
- Legal fees are required to be paid to those who prepared and recorded the documents
- Origination fees are paid to the lender for the administration and procurement of your loan
- Title fees will be paid which cover the title search and to protect you from liens and other encumbrances
- Underwriting fees are charged for reviewing your application
Other fees are often due at the closing table. You can expect to pay approximately 2% of the final sale price.
It is not likely everything you want to have done will be covered during the negotiation period. You will inevitably want to fix a broken step or cracked tile. These small repairs can add up fast if you are trying to get the house in perfect condition for move-in. If you are looking to make a larger improvement, it might be easier to do it before you unpack in your new home!
Before moving into a community with an HOA, learn about what they charge and what they cover. An HOA’s rules can be very limiting to some homeowners. For some people, it is more of a burden than it’s worth. However, others appreciate having the neighborhood professionally maintained. Talk to some neighbors if possible and find out their thoughts on the HOA. Do they do a good job? How often are fees increased?
Your new house might have different needs from a utility standpoint. A larger house is going to cost more to heat. A house with a pool or spa might require the use of more water. Take into consideration that the utility prices you are used to paying might be dramatically different in your new home. In addition, if you are working with a new company, you might be required to pay a deposit before services are turned on.
Moving is expensive! Consider the boxes, movers, truck, tape! It can add up fast! Not to mention the time you will spend packing and unpacking. Upon moving in, you will inevitably need household items. A dish drain, a silverware organizer, all of the little things that you might not have brought with you, but that serve to make a house a home.