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New York state is home to some of the most iconic landmarks and natural wonders in the U.S. From the welcoming Statue of Liberty in New York Harbor to the towering Niagara Falls, New York offers visitors and residents an abundance of sights to take in and experiences to remember.
New York has enjoyed a steady rise in home prices since 2009. Despite a slowdown in price appreciation, sellers are still finding buyers willing to pay close to their asking price. Although overall sales activity has slowed, median prices rose 9.8% year-over-year in February 2019 to $280,000, according to the New York State Association of Realtors.
Houses aren’t staying on the market as long as they were last year, which means buyers need to be prepared to act quickly if they want to purchase a home. However, there are slightly more houses for sale, so buyers will have more choices of homes than they’ve had recently.
New York state can be one of the most expensive states for purchasing real estate, but it also provides residents some special protections under its homestead laws. Transfer taxes can be on the high side compared to other states, especially in New York City and its surrounding boroughs.
A lawyer must represent all buyers wanting to purchase a home, a requirement that is unique to New York real estate. This attorney will be involved in the preparation of all documents related to your mortgage financing and will also review the title report to resolve issues such as liens or outstanding violations on the property.
New York is a judicial foreclosure state, meaning any foreclosure has to go through a court process that on average takes 120 days. It’s also important to note that deficiency judgements are allowed, which means the lender can sue after a foreclosure to recoup any losses it incurred.
New York is also an equitable distribution state, so marital assets have to be divided in an equitable and fair manner. This doesn’t necessarily require a 50/50 split like you would see in a community property state. In a divorce, the percentage of real estate going to each spouse will need to be clearly identified in the property settlement agreement by both parties.
New York used to be a “caveat emptor” state, meaning sellers couldn’t be held liable for failing to provide information about their home. New laws require a property condition disclosure statement to be provided answering 48 questions about the condition of the property, including any history of damage or contamination.
New York transfer taxes are charged by the city, county or state tax authority simply for changing ownership in real estate. The average annual tax bill across New York state is $6,054, according to the National Association of Home Builders. This makes it the third-highest in the nation.
However, the actual amount homeowners pay will vary by county and city. In the case of New York City, you may have to pay both state and county transfer taxes, substantially increasing your closing costs. It is important to note that your mortgage lender is responsible for properly disclosing the correct transfer tax on a home once you’ve found it, or they could be subject to paying the entire expense on your behalf.
Whether the seller or buyer pays the transfer taxes is fully negotiable. In most areas of New York state, the county transfer tax will be between 0.40% to 1.425% of the sale price – New York City also charges a mansion tax starts at 1% once the price exceeds $1 million up to a maximum of 3.9% for a price of $25 million or more.
There are property tax exemptions available that allow for senior citizens, veterans, people with disabilities and homeowners in particular school districts to have their property tax bill reduced. You can check your eligibility for these exemptions at the New York State Department of Taxation and Finance website.
Most counties of New York state have a maximum conforming loan limit of $484,350, while the higher-cost counties are allowed up to a maximum of $726,525.
Conforming loan limits are the maximum loan amounts that are allowed for you to get a loan under Fannie Mae and Freddie Mac . The benefit of being approved under the parameters set by these government-sponsored enterprise loan products is more flexible approval guidelines, and more resources for financing than you’ll find with “jumbo” loans if you exceed the conforming loan limits.
Given how expensive it is to purchase a home in New York, any assistance a homebuyer can get is a big help. Lower rates and down payment assistance available in certain programs can help buyers keep more of their hard-earned savings.
There are a number of programs in the state, and we’ll highlight a few of them below.
The State of New York Mortgage Agency (SONYMA) provides a number of first-time homebuyer assistance programs that offer lower rates and down payment assistance up to $15,000. Unlike many traditional mortgage programs, this one does not have a credit score requirement.
Achieving the Dream provides loans with the following terms and features:
For buyers trying to purchase a home in the expensive, greater New York City area, it can be especially hard to come up with a down payment. NYC Housing Preservation and Development offers up to $40,000 in down payment assistance to eligible first-time homebuyers. Here’s what the HomeFirst Down Payment Assistance program entails:
Community Housing Innovations Inc. offers first-time homebuyer’s assistance to cover down payment and/or closing costs, plus rehabilitation expenses for homes purchased in Westchester, Nassau and Suffolk counties. The program is run in conjunction with the New York State Affordable Housing Corporation. This program features:
These are just three of the homebuyer programs available in New York. You can find more here.
Each week, LendingTree provides a weekly report that shows how much consumers can save during the mortgage rate shopping process. In many cases, the savings add up to tens of thousands of dollars over the life of the loan. Here are a few quick tips to make the most of your mortgage shopping trip.
You should carve out enough time to contact at least three lenders, and get interest rate and closing cost quotes from each of them. Interest rates fluctuate just like stock prices, so it’s important to make sure you are getting your quotes on the same market day so you are getting an apples-to-apples comparison.
The best thing to do is have a list of the following information ready to give to each lender. Making sure you give each lender the exact same information is key to ensuring you get comparable quotes. If you don’t give accurate numbers, you may get a quote that sounds low, only to be disappointed later when you find out there is an adjustment.
Don’t rely on an APR for your cost comparisons. Take the time to add up the lender origination, credit report, tax service, flood certification and application fees or points to be sure you’ve got the totals.
Ignore costs like title fees, and prepaid costs like property taxes and homeowners insurance — those fees will be the same regardless of the lender you choose. On your loan estimate, these will show up under “Closing Cost Details” in section A and B.
If one rate looks significantly better than the others, be sure to ask for a lock in, and get the confirmation in writing.
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