FOLLOW THESE 5 STEPS TO GET YOU CLOSER TO THE CLOSING TABLE FOR YOUR STARTER HOME.
Queens’s prices are through the roof! ...but so is the rent. In this fast paced market how do you know when is the right time to buy? Here are 5 necessary steps you will need to take to go from your rental to your starter home:
1. GET YOUR CREDIT READY!
Credit scores are one of the most important factors when getting a mortgage. With good credit comes a good interest rate! Lenders look for long-term on time payments before lending you the hundreds of thousands you will need to purchase your Queens home.
The more lines of credit you have the better. So if you have one credit card it might be time to up the credit game a little. For more info on credit building CLICK HERE. Remember when getting new credit cards it will effect your credit score by 5-15 points. Over time it will grow into a beautiful money tree helping you get the funding you need for your future home.
FIGURE OUT, WHICH MORTGAGE IS THE RIGHT MORTGAGE FOR YOU.
Even if you don’t have 20% down you can still get a mortgage for a little as 3% down. If your mortgage is lower then 20% you will have to get what is called mortgage insurance, which is roughly .85% of the mortgage and is not tax deductable in any standard.
You can also lower your mortgage insurance and your rate by taking a short-term loan. Like a 5 year ARM where the interest fluctuates every 5 years. This might not be the best option if you are planning to live in the home long-term.
Does it sound like I’m speaking another language?
LET A PROFESSIONAL MAKE IT SIMPLE TO UNDERSTAND
KNOW WHAT YOUR TAX DEDUCTIONS ARE!
When you buy a home your property tax and mortgage interest are tax deductable. So, when you file your taxes at the end of the year you'll owe less money to the IRS. Speak to a financial professional for more details.
COMPARE RENTING VS. BUYING.
Most people make the mistake of looking at the monthly and comparing it that way. To truly compare you have to compare it after your tax deductions and the whole nine yards. That will give you the true numbers you need for a proper and accurate comparison.
KNOW THE DIFFERENCE BETWEEN A CO-OP, CONDO, AND RESIDENTAL PROPERTY.
It is wise to speak to a local real estate professional to come up with a game plan. A good realtor will look at your budget and connect you to other professionals to help you come up with a budget and over all game plan.
THE BASICS:
Co-ops: Usually require 20% down payment and have many requirements regarding DTI. They have policies regarding subletting and pets. You usually must pass a board interview and an application process (NOT REAL PROPERTY).
Condos: You can get an array of loans for this property but buildings don’t usually accept FHA loans. Some condos do require a board process (rare). A Condo does have common charges and taxes similar to a co-op but does not have as many rules and policies. (REAL PROPERTY)
So renter, there you have it! Those are the five steps you need to start moving toward ownership. It would be a wise choice to reach out to a real estate professional to help you brainstorm and come up with a game plan. Also, most buyer representation is FREE! So, you have nothing to lose and everything to gain!
GET LINKED TO A PROFESSIONAL REALTOR
"Alex is a great realtor! He not only helped me find a great 2 bedroom in Forest Hills, but he also helped me sell my studio quickly. He's very professional, extremely responsive, and always available to answer questions. I would recommend him to anyone looking to buy OR sell." - ZILLOW USER