Mortgage Guide

First time buyers sometimes find the mortgage process to be a bit intimidating. By taking some steps to prepare in advance, you can help to ensure a smoother transaction.

Know your credit standing

 

Credit scores are an extremely important factor in determining not only the interest rate you can qualify for on your mortgage, but whether you will qualify for a mortgage at all. Order a copy of your credit report in advance, and be sure to contact the credit reporting agency and your creditor if you think there are any errors on the report.

 

Start saving

 

You’ll need enough money in the bank to cover your down payment, closing costs and “reserves,” which is money in your savings that is left over after closing. It’s preferable to be able to put a down payment of at least 20% of the purchase price of the home into the transaction, however

 

Collect your documents

 

In order to have the most mortgage options available to you, you’ll need to be able to fully document your income and assets.   While program may vary, most lenders typically look for the followowing documents :

  • One month of pay stubs
  • W-2s for the past two years
  • Personal tax returns for the past two years
  • Savings & Checking account statements for the past two months – all pages
  • Money Market accounts statements for the past two months – all pages
  • Investment Accounts statements for the past two months – all pages (including stocks, bonds & treasuries) 
  • Retirement account statements for the past two months – all pages (including 401k, Keogh, IRA)
  • Documentation of sources of any gift funds  

 

Self Employed Borrowers should also provide the following:

 

  • Corporate Tax Returns for the past two years
  • Profit and Loss Statement  

 

Do your homework

 

Working with the right professionals will go a long way in making the home buying process relatively stress free. Get referrals for a real estate agent and mortgage consultant, as well as a real estate attorney.

 

First Time Buyer Options

 

FHA: Federal Housing Administration
BenefitsRequirements
  • Minimum down payment of 3.5%
  • Low minimum credit scores
  • Competitive interest rates
  • Buyers can qualify with non- occupant co-borrowers and co-signors
  • Sellers concessions, gifts & grants accepted
  • Home renovation financing available
  • Financing may not exceed FHA maximum loan amounts (currently $729,750 for a single family home) in the New York Metropolitan area.
  • Property must be owner occupied
  • Co-ops and most condos not allowed
  • Foreign Nationals not alllowed

 

SONYMA: State Of New York Housing Association
BenefitsRequirements
  • Low down payment
  • Closing Cost Assistance Loan Available
  • Promotes first time homebuyers and home ownership in designated target areas
  • 30 and 40 year terms available
  • Co-ops allowed
  • Applicant must be a first time home buyer;
  • Borrower's income may not exceed SONYMA limits
  • Property price may not exceed SONYMA limits
  • Full documentation required

 

Low Down Payment Options
Mortgages are available for home buyers who need to borrow more than 80% of the property price. However, the borrower will be required to make a monthly mortgage insurance payment in addition to their regular monthly payment.