Does the idea of researching lenders, finding a perfect property, taking on a home loan and managing a mortgage terrify you? Our complete guide to mortgages and lenders for first time buyers will make it easier to buy your home in New York.
Step 1: Consider Current New York Mortgage Rates
One of the 1st things to consider when you shop for a home loan is current market interest rates. The interest rate you pay will have a direct effect on both your monthly payment and the total amount of money you pay back to your lender beyond your principal balance.
Mortgage rates can change on a daily basis depending on how the economy is moving and your local housing supply, so be sure to keep track of how mortgage rates are shifting in your area.
Below you can get a sense of what you might expect to pay for your mortgage loan in New York if you took it out today. We update this information regularly to serve you the most up-to-date information available from online mortgage lenders.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | N/A | N/A |
| 15-year fixed | N/A | N/A |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Step 2: Pick a Mortgage Lender in New York
Before you start shopping for a mortgage loan, you’ll need to apply for a loan preapproval. Consider our top picks below to find the best mortgage lender.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans is one of the most prominent lenders in the United States. From government-backed mortgage loans for men and women with poor credit to million-dollar jumbo loans with affordable interest rates, Quicken Loans has a mortgage for everyone. And Quicken Loans’ Rocket Mortgage® platform can help you explore loan options if you’re not sure which mortgage is right for you.
Quicken Loans’ YOURgage® program allows you to choose a custom term between 8 and 29 years. With completely customizable solutions and almost every type of loan, Quicken Loans is our recommended lender in New York.
2. Best for Veterans: Veterans United
If you’ve served in the armed forces, you might want to consider purchasing a home with a VA loan. VA loans are government-backed mortgage loans with flexible down payment and credit qualifications for veterans and active duty service members.
Veterans United is the country’s top VA loan provider and has been highly rated by veterans for 4 years. Veterans United’s team specializes in making the VA loan application process simple. Loan officers can assist you in understanding qualifications and help you get your proof of service in order.
Veterans United’s team can also help you explore conventional loan solutions if you don’t qualify for a VA loan.
- Self-employed Borrowers
3. Best for Self-Employed Buyers: Luxury Mortgage
Small business owners and independent contractors are often surprised by how difficult it can be to get a mortgage when you’re self-employed. As a self-employed buyer, lenders view you as a riskier candidate because you may not have the consistent earnings or the guaranteed income of a salaried job. This can mean a harder time qualifying or paying higher rates.
Luxury Mortgage is New York’s premier lender for self-employed buyers. The company’s Asset Qualifier loan is a more flexible loan option for business owners and contractors because it allows you to use business assets to qualify for a loan. The Asset Qualifier loan also doesn’t require income verification, so you won’t have to worry about providing years of tax returns for your lender.
Step 3: Find a House
After you apply for a mortgage loan, you’ll receive a loan preapproval. Your preapproval gives you an idea of how much money you can afford to spend on a home, making it a great jumping off point to begin shopping. Now comes the most fun part of buying a home — finding that perfect property.
Before you browse home listings, take some time to consider what you are looking for. The perfect home should not only match your budget but should also be compatible with your goals and lifestyle. You may want to develop a list of “wants” and a list of “needs” to help you narrow down your search. Most buyers also enlist the help of a real estate agent or realtor at this stage to make shopping easier.
Here are a few aspects to consider when starting your search for a new home:
- Neighborhood. Consider what type of neighborhood you’ll be most comfortable in. Homes in urban areas tend to be more expensive but come with more community amenities to enjoy. Suburban neighborhoods tend to have greater schooling options and offer larger homes and lots. Rural locations may be cheaper and quieter but come at the expense of poorer access to cultural activities.
- Commute. Buying a home in the country may sound idyllic, but you should take into account your tolerance for longer commute times. It may be a rude awakening to deal with a longer commute to work if you are used to a short walk, drive or bus ride.
- School system. If you have children or expect to start a family in the next few years, you’ll want to think about the quality of schools in your area. This is worth looking into even if you don’t plan to have children because local school quality and property tax rates are related.
Once you know what you’re looking for and begin viewing properties, keep your eyes peeled for common red flags. Check for things like water damage, faulty pipes and electrical switches that don’t work. Ask the seller’s agent or the homeowner about any knowledge of lead paint, radon gas or asbestos. Survey the property and check that the trees in the yard seem to be in good health.
Step 4: Make an Offer
When you’ve found a house you’re interested in, it’s time to make an offer. Your real estate agent will be critical in helping you through this process. They can help you to determine an appropriate offer based on how long the house has been on the market and the level of interest amongst other prospective buyers. The agent will also draft the written offer to the selling agent or homeowner.
Once you submit your offer letter, the homeowner wil review and respond to it. They may return a counteroffer or rejection. You and your agent will determine whether you are comfortable increasing your offer or if you’d prefer to walk away.
Once you reach a purchase agreement that satisfies both parties, you can then move to close the deal.
Step 5: Closing Time
After you and the seller have settled on an offer, you’ll enter into the closing phase of the sale. The 1st things you’ll need to do are get a home inspection and appraisal. While these processes are going on, your mortgage lender will work on checking your financial information and finalizing your loan.
- Home inspection. Though not required to obtain a mortgage, it’s highly recommended that you have the new home inspected to avoid closing on a house that is going to surprise you with repair and renovation costs down the road. The home inspector will conduct a home walkthrough and look for any surface-level red flags in structural components, appliances and home systems.
- Home appraisal. A home appraisal is a required step of closing. Your lending institution will arrange for a 3rd-party appraiser to come to the home and assess its value. Lenders require appraisals before you get your home loan because they cannot loan you more money than your property is worth.
- Mortgage loan underwriting. Your bank will work behind the scenes during this time to finalize your home loan. The lender will review your financial information (income, assets, debt) and ask for any supporting documents to finalize the loan offer. Once you have a final loan offer from your bank, you’re ready to close on the home.
Closing on the home involves signing documents, paying your seller and transferring ownership of the property into your hands. Before your closing meeting, do a final walkthrough to ensure all terms of the purchase agreement have been met.
You will sign a number of legal documents on closing day, including a mortgage note, a deed of trust and a settlement statement. You’ll also need to pay your down payment and closing costs at the meeting. Plan to bring a cashier’s check or proof of electronic fund transfer.
Finally, the sellers will sign the deed to transfer ownership. Once you are officially recognized as the owner by your city or county, you will receive the keys and be able to move into your new home.
Move-in Day in New York
After you leave closing, you can officially call yourself New York’s newest homeowner. But owning a home is about more than just scheduling a move and decorating your new space. Be sure to stay up-to-date on your mortgage loan payments and remember to set aside enough money for property taxes, regular maintenance and homeowners insurance.
Start with the right mortgage lender and form a relationship to make your way to move-in day in New York soon.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.