Property Grunt

Saturday, December 11, 2004

How the Magic Happens Part 2: Down Payment and closing costs

The Down Payment

In Manhattan a down payment might be equivalent to 2 semesters of college tuition. That is not a joke.

According to the NYC GOV site

One important part of being approved for a mortgage is having cash available for a down payment and closing costs. These costs will vary according to the type of home you wish to purchase and the particular mortgage you obtain. Generally, a down payment is 10 to 20 percent of the purchase price of the home, though some programs allow for down payments as low as 5 percent or even no down payment.

Closing Costs. Can't live with them. Can't live without them.

One of the components of buying a home is the contract, which requires a lawyer to prepare.
I do not recommend preparing your own contract.

And I do suggest you get an attorney who is experienced in real estate transactions particularly in what you're buying. For example, if your focus is a Manhattan coop it would be a bad idea to use a lawyer who has only worked on houses in Nyack.

Closing costs, such as your attorney's fee, loan processing fees, mortgage points and engineering report fees, can add up to about 5 percent of the cost of your mortgage. Even though there are programs available that can help first-time buyers cover these costs, it is important that you have some money saved for a down payment and closing costs before you get a mortgage. This will show the lender that you are serious about the purchase, and it will help to bring down the costs of financing the purchase.

If you want to get a better idea of what it’s going to cost you. This link has an array of mortgage calculators that will show you what the numbers are.