Is New York Home Ownership Right For You?

If you are currently renting but you’re beginning to consider home ownership as an option, there are many things to consider. From finances and mortgage options to the pros and cons of home ownership, this post is a helpful resource that will assist you in deciding whether or not buying a home in New York is the right choice for you!

First Things First – What is a Mortgage?

The very first thing you’ll want to fully understand if you’re interested in purchasing a home is the concept of a mortgage, and the process of obtaining a home loan.

Simply put, a lender ‘loans’ you the money to buy a house. In return, you personally guarantee you will pay the money back. But, your handshake alone, unfortunately, isn’t sufficient enough to guarantee this. Therefore the lender gets to hold a lien against your home while you are paying the money back.

To gain a better understanding of mortgages and the mortgage process, check out our step by step guide to the process of obtaining a home loan!  

Keep in mind that there are many different types of mortgages – a lot more than most people realize! – and each has its own distinct advantages and disadvantages. It’s important that you chose a mortgage that is best for you now, as well as in the future, based on your financial plan.

This is where Maple Tree Funding can help. Think of us as your ‘financial matchmakers.’ By working with a wide variety of lenders, we can help you find the perfect mortgage to fit your needs, whether it’s a FHA, USDA or VA loan, or a loan for those with less than perfect credit.

Why Own? There Are Many Great Reasons!

So now that you understand what a mortgage loan and a lein are, there are additional pros and cons to consider when it comes to purchasing a home in New York.

Home Ownership Pros:

• Pride of Ownership: You’ll have a place that you can call your own. No more checking with the landlord if you want to paint the walls something other than off-white. You’ll be the owner and become part of the community in whichever New York neighborhood you decide to purchase in.

• Cost Savings — Really: In some cases, and especially with today’s low interest rates, your monthly mortgage payment is less than what you would pay for rent. In addition, owning a home can often reduce the amount of federal income taxes you pay, as most people can deduct their mortgage interest and property taxes when they file.

• Protects Against Inflation: If you choose a fixed-rate mortgage, the rate will stay the same for the life of the loan. You will know the amount you will be paying each month, even if it’s a 30-year loan! Maple Tree Funding can discuss the different loan scenarios with you, and help you decide if this type of mortgage is right for you.

We’d like to say their are no cons to home ownership, but there are some things to consider, especially if you are used to renting.

Home Ownership Cons:

• Ownership Responsibilities: Just like there’s no landlord to get permission from to paint the walls purple, there’s no one to call when the faucet starts leaking, except a plumber. Understanding your own level of ‘DIY’ comfort, and researching the standard costs of routine maintenance can help you determine how much of a negative this is.

• Commitment: Home ownership can make it more difficult to pack up and move if you dislike a location or there’s a life transition. While it’s usually a 30-day notice to ‘break a lease’, there can be a longer timeline to selling a home. If you can’t commit to staying in one place for a little while, you should carefully consider whether this is the right time to buy a home in New York.

• Down Payment & Closing Costs: Buying a home generally does require some money in the bank as most home loans require some type of down payment. Keep in mind, however, that there are certain loans, such as FHA mortgages that have low down payments! In fact, USDA mortgages do not require any money down at all. This is where Maple Tree Funding can help you. By working with a wide variety of lenders and loan-types, we can help you find a mortgage solution that’s right for you.

How Much Mortgage You Can Afford?

Before you start attending every open house in New York, regardless of the asking price, it’s a good idea to know how much house you can afford.

Quick Calculation Method

A quick method of calculating this is to multiply your annual gross income (before taxes) by 3. If your household income is $60,000, a rough estimate of how much mortgage you might qualify for is $180,000. It’s important to note that this is just a rough estimate. The actually number will vary quite a bit, based on your individual circumstances, such as your credit history, your savings and your amount of personal debt.

Housing Expense Ratio

In some case, we recommend that your monthly mortgage payment should be less than or equal to a third of your monthly gross income. This percentage can change based on the type of mortgage you choose and sometimes the area in which you’re looking to buy.

Debt-To-Income Ratio

You will need to factor in your other debts when determining an affordable monthly mortgage payment. Maple Tree looks at whether your total debt is larger than 40-50% of your monthly gross income. Remember, debt is not just credit cards and student loans. It can also include alimony, child support, car loans, and housing expenses. We will factor in your debt as well as provide easy steps to help increase your credit scores.

At Maple Tree Funding we will use the housing expense and debt-to-income ratios to more accurately determine how much you can afford to spend on your mortgage. We will chart out your payment schedule, your options, and provide you with the perfect mortgage scenario. Maple Tree will help you understand your expenses. We will work with you to help you get into the house of your dreams. Our friendly loan officers walk you through the process, making sure you feel comfortable with each and every decision.

Ready to Talk Finances?

If you’re interested in becoming a first time homebuyer in New York, Maple Tree Funding can help. From helping you to determine how much you can afford to spend on a home to shopping your mortgage options and guiding you through the mortgage process, our staff of mortgage professionals will assist you every step of the way as you take the leap into home ownership.

Give us a call at 518-782-1202 or contact us online to get the conversation started and we’ll call you at your convenience.