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Hello neighbors! Any advice for a first time home-owner? I make a moderate salary, but have enough savings that I think I could swing a down-payment on a small apartment (1 or 2BR, ideally) and start paying more per-month towards a mortgage. Can anyone who has successfully purchased in our neighborhood (or other Brooklyn 'hoods) advise me on what the steps are and what I should know?
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You might want to start by working with a mortgage broker to get preapproved--then you'll know your budget and can act quickly if you see something you like. Here's the guy we used: Jeff Mogull Work: (914) 993-9089 Fax: (914) 993-3334 E-Mail: jemogl@aol.com We found him very helpful."Now if every newspaper editor had to deal with a reader like Emily, boy, would they think twice, or three times." --greg
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also be aware they will most likely approve you for what they are willing to give you, not necessarily what you can afford. i think brokers take a cut? i called banks directly to get rates. also, make sure they don't run a credit check until you are actually ready to work with them. every time someone runs your credit report it will negatively affect your score (at least that's my understanding).
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brokers get a commission from the bank, not a cut, and usually they charge a smallish application fee ($350 or so). because brokers get a commission, it's hard to know whether they mortgage they think is best for you really is, or if it's the one that gets them the largest commission. an alternative is to go directly to you bank, or multiple banks to compare rates, cutting out the broker. but this is a bit more work for you. (not really much). if you don't have a complicated mortgage (yours seems pretty straightforward), I would recommend that route. definitely good advice to get pre-approved first. and yes, the banks will gladly give you more than you would actually think you could afford. just make sure you know your own limits. credit report requests do not count against you if they're for mortgages (and some other exceptions). after that, go shopping!selfindulgence.com
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Good advice, keep it coming! Once I get approved for a mortgage, what kind of things should I know for the shopping part? ie: getting approved for a co-op board, things like that. What about good real estate people in the neighborhood to work with (or bad ones to avoid)?
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VeggieQueen » also be aware they will most likely approve you for what they are willing to give you, not necessarily what you can afford. i think brokers take a cut? I called banks directly to get rates. Also, make sure they don't run a credit check until you are actually ready to work with them. every time someone runs your credit report it will negatively affect your score (at least that's my understanding).
You are correct, BUT it all depends on your credit score (heavily), how much you can afford to put down (5%, 10%, etc.), what your debt load is, income, etc. Brokers get a percentage on the amount of the loan you get, generally 1-3% from the banks. If any broker asks YOU to pay them or additional points to "get you a good deal," walk away. We had a very successful experience with our mortgage broker both with our initial purchase, HELOC (after extensive reno) and finally a reconsolidation of all the debt into a new mortgage. So I have nothing bad to say. Get a letter of commitment and start shopping...
And of course, run the numbers first 
If you are interested, here's our broker's info as well:
Eugene T Lee
Apple Mortgage Corp.
19 West 44th Street, Suite 1514
New York, NY 10036
(212) 221-6666 X118
elee@applemortgagecorp.comA word or two from the highest point in Brooklyn--Greenwood Hts.
...elevation, not just inebriation... -
start reading the bklyn real estate blogs like onehansonplace.com brownstoner.com just to get the inside scoop on what's going on out there. any smart buyer should be doing that.
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Shredder » Good advice, keep it coming! Once I get approved for a mortgage, what kind of things should I know for the shopping part? ie: getting approved for a co-op board, things like that. What about good real estate people in the neighborhood to work with (or bad ones to avoid)?
Now's not a bad time to be looking round here, as there are more sellers than buyers, and prices and interest rates are pretty flat. Less competition, and anyone who needs to sell fast will be flexible on price. You need to have an idea what you want to spend, which is probably more than your current rent but less than the bank or broker says you can spend. One way to decide that is to say that the interest on your loan plus common charges plus tax minus tax savings shouldn't be much more than your rent. That's a way of saying that apart from the principal you pay yourself, it shouldn't be more expensive to buy than rent, and you're not betting your financial future on a speculative rise in the price of the home. And it's a good idea to think about whether you want to live in a co-op or a condo. There's no board exam to pass with a condo and fewer rules and lower common charges, but they tend to cost a bit more, though there are a lot of buildings coming on the market at the moment. Condos are often easier to let or sell if you have to move for some reason. Some people prefer the tighter community some co-ops offer. And then there's all sorts of questions, like do you prefer a large or a small building; do you want extras like a doorman &/or live-in super; do you like pre-war or would you take a bet on new construction; should it be in pristine condition or do you want to renovate; is having some outdoor space a priority; are you ok with walking up lots of stairs or do you want a low floor or an elevator; how close do you need to be to which subways; how much traffic noise can you stand; and so on. As fior realtors, I think the best philosophy is to assume that they're all bad, as they're working for themselves, not really for the seller and certainly not the buyer. You don't need a particular realtor drip-feeding you places to look at and not showing you other places; you can work with any and all of them, doing your own research on the net as you go. There are excellent tools available like propertyshark and zillow as well as some access to the MLS via realtor.com, so you can actually learn as much about the local market as your average agent. For shopping, you probably don't even need the pre-approval to get started; you can just read about open houses on craigslist, NYT, and a few of the larger local realtors like Corcoran, BHS, Brooklyn Properties, and Aguayo Huebner, and start turning up. I saw a good 20 places before I really started to narrow down what I wanted and what to look for. It also helps to think realistically about what blocks you would and wouldn't want to live on, as whatever you settle on, it's going to be a compromise.The world will little note nor long remember what we say here. -- Abraham Lincoln -
I don't know about onehansonplace.com
But, definitely http://www.brownstoner.com and http://www.curbed.com as well.A word or two from the highest point in Brooklyn--Greenwood Hts.
...elevation, not just inebriation... -
oh and start shopping for a real estate lawyer. i loved mine... pm me if you want info.
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I was a mortgage banker and broker. They're both in it for a cut, and you can't trust one any more than the other. If you really want to know what you qualify for, without the pressure from some smarmy suit, lemme know - I'm not in the biz anymore, but I can get you a good idea talking round numbers, and a great idea if you have a credit report, income statements, etc, etc. I take payment in strong coffee and French crullers....not that there's anything wrong with that.
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the 1st step i would suggest is start looking at places now. check on craigs list and the new york times for open houses in the area you want to live in. that way you can get a feeling for how much you get for your money. figure out what you can afford say you want to buy a 200000 coop most places will want %20 down so thats 40000 your mortgage will be 160000 so thats about a 1000 a month payment on top of that your maintenance will be about 400 a month so your looking at spending about 1400 a month to live in your place and that is on the cheap side. after that get your money right, if your family is going to give you some money for the down payment get it now. coop boards like to see that you have had a good amount of money in the bank for a while. i went with a mortgage broker it made life allot easier. but you can save money if you do it your self with the bank directly. also have patience, i saw about 10 places before i got the coop im in now.
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1. I started by targeting neighborhoods I liked and visited a lot of open houses just to get a lay of the land of what you get where. 2. I also made a list of "must-haves" and "nice to haves." Think of things beyond the walls of the building -- i.e. transportation, street noise, stores/shops/restaurants, parking, schools, culture, etc. I actually ranked different items from 1-10 and created a little score sheet as I went. As with all things in life, sometimes there will be compromises and trade-offs. 3. Find a real estate broker that you like (or can tolerate) and be very clear on what you're looking for. Remember: these people are looking for a commission, and they are not working for you (the buyer) but the seller. Be demanding and tell them when they are showing you the wrong things (i.e. too expensive, too far away, etc.). 4. I'm a coop board prez and the nightmarish stories I find to be mostly derived from high-end buildings in Manhattan. As long as you are a decent person with decent financials, you shouldn't be turned down by a board in Brooklyn. Consider whether you want to be in a big building or a small one based on the kind of person you are. In a smaller building like ours (20 units) we all know each other, share babysitting duties, run errands for each other, have parties and do building projects together. If you want a more anonymous existence, stick to a bigger building. 5. Pay for an inspection of the property before you buy. This will run you a few hundred, but if you're spending 200-300K it's worth it. Get full access to the entire building -- boiler room, roof, basement, etc. A third-party point of view will let you know if there's anything bigger or long term to worry about in your investment, and could be used as a possible negotiating point in the sale. It's also educational, so you should walk with the inspector. The old management company of my building (who we quickly fired after we new residents took over the board) tried to block me from doing this, but I got pushy and I made it happen. 6. Lastly, remember the place you buy will probably not be the only place you ever live. You may very well move as your life and needs change, so if you don't get 100% of what you want the first go round, don't despair."The jawbone of an ass is just as dangerous a weapon today as in Sampson's time."
--- Richard Nixon -
I've just started looking for a one bedroom in Prospect Heights, and these posts have been really useful. I've garnered the following from the comments in November. Are there other broker listings I should follow to get to open houses? Really pretty much every thought will be useful to me at this point. It's the first tme I'm buying. Real Estate Blogs -- http://www.onehansonplace.com -- http://www.brownstoner.com -- http://www.curbed.com General Property Resources -- http://www.propertyshark.com -- http://www.zillow.com -- http://www.realtor.com Listings -- http://newyork.craigslist.org/brk/rfs/ -- http://www.nytimes.com/realestate Real Estate Brokers -- http://www.corcoran.com -- http://www.bhsbrooklyn.com -- http://www.brooklynproperties.com -- http://www.ahrlty.com Inspectors? Real Estate Lawyers?
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Max » ... Real Estate Brokers ... -- http://www.ahrlty.com
Their ol' skool site (above) is still updated, but it's worth noting that they also added http://www.ahbrooklyn.com last spring or thereabouts, just in case that refreshed look and feel floats yer boat.i extend my battery life by turning down the brightness -
There are some City programs for new home buyers. I don't really know them that well, but go to http://www.nyc.gov/html/hpd/html/home/home.shtml Also, there is some sort of informational seminar on March 12 6-8pm at Borough Hall (209 Joralemon @ Court Street). Renaissance Park LLC is selling units through HUD & HPD for people earning around $50,000. I don't vouch for any of these- so if you go, I would be curious to hear how useful they are.
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raulism » There are some City programs for new home buyers. I don't really know them that well, but go to http://www.nyc.gov/html/hpd/html/home/home.shtml Also, there is some sort of informational seminar on March 12 6-8pm at Borough Hall (209 Joralemon @ Court Street). Renaissance Park LLC is selling units through HUD & HPD for people earning around $50,000. I don't vouch for any of these- so if you go, I would be curious to hear how useful they are.
We purchased our home with a HUD mortgage and we only had to put 3% down. There are also programs with incentives to rehab older homes sponsored by Fanny Mae that will allow you to add the cost of renovation into the mortgage loan. There are also coops (like the ones on Lafayette) which are run by the HUD/HPD programs which allow you to purchase the apartment based on your salary. The newer houses on Underhill bet. Dean and Bergen are similiar. They were built and sold to families making under a certain amount but not over a certain amount. Since they were multiple family homes they were able to figure the rental income into their own personal income when applying for the mortgage. -
I first contacted a banker and attempted to get one of the govt sponsored loans. but the guy was a total flake, so I called my uncle who works for gmac and he gave me the name of a broker in manhattan who was just as big a flake but managed to close the deal. don't let more than one or two places pull your credit report. also, I bought into a co-op with less than 40% owner occupancy and still more than 50% owned by the sponsor, and I got in with 5% down, a 15% heloc and 80% mortgage. so it's possible to get all of those things even though everyone tells you there's no way to get in for less than 20% down. I'm not sure I'd use my mortgage broker ever again, and my lawyer is a friend who had just started practicing real estate law (I'm kinda a wing and a prayer person), and is now doing all commercial real estate deals, so I wouldn't send you to him, either. but good luck!like a smoked meat with an earthy youth overnote
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I have an amazing broker that set up appointments for me to look at apartments. He even rented a zip car and took me all over Brooklyn I never would have found my apartment without his help. Feel free to PM me and I can give you his contact info.Sentiment without action is the ruin of the soul.
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This is a great thread . . . I barely know which posts to star so it gets noticed! I looked for about four months before I found what I wanted -- lots of different nabes and all sorts of permutations from factory space to new construction. Sounds like you have the luxury of waiting for the right place, so take your time. Using a mortgage broker is great - you can ask them any dumb questions you wouldn't want to ask the bank. Or you can just hand the cruellers over to WhyFi. I used Frank at First Merchants - just off Seventh Ave in the North Slope. He still remembers my name and roughly what I paid for my place, more than 10 years later. (I guess I sent him alot of my friends, but still...) He runs a good office. As others said, the mortgage brokers get their cut from the bank, not from you. First Merchants works with a variety of banks -- do they all do that? As for the realtor - you're buying a home, not a friend. S/he is not working for you. They are just the conduit to get you to the places...and with all the internet options, they are not the only way in.
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alafairnadia » so it's possible to get all of those things even though everyone tells you there's no way to get in for less than 20% down.
I got in for 10% down in my building, some others got in at 5%. We now require 10%, but that is still super reasonable as we really wanted to encourage new buyers to get into our building."The jawbone of an ass is just as dangerous a weapon today as in Sampson's time."
--- Richard Nixon -
Is 20% down a standard co-op procedure? 20% was the requirement when I bought if you didn't want to produce your tax documents for the lender....
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Coops can set the required % in their bylaws. However, banks providing underlying mortgages on buildings can make % requirements for the coop in order to be considered for loans, line of credits, etc. 20% does seem to be a standard, but it is by no means a hard rule."The jawbone of an ass is just as dangerous a weapon today as in Sampson's time."
--- Richard Nixon -
Thank you guys so much. I am particularly thankful for the phrase "you're buying a home, not a friend." That helps keep me calm when realtors don't bother with the social pleasantries.
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I am always buying and selling real estate and I have a good contact for you. The best way for you to get the best deal is to call a trustworthy mortgage broker. I used this guy 3 times in the past 5 years: Hymie Serure Works at Trachtman & Bach (718) 623-1400 hymie@tbmortgage.com He was excellent -- beat Citi's and Chase's rates hands down, consistently. On all of my loans, he needed very minimal paperwork from me and it was a breeze. I've also been told by other people who used him that he is the co-op expert. I'd give him a try.
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Another good resource (apologies if it's already been mentioned but I didn't see it) is trulia.com. It will give you a good idea of prices relative to the areas and size of place that you're looking for. My ex-girlfriend and I were looking last year and I found Prospect Heights to be unevenly priced, i.e., there were a couple of places that were really good values relative to the surrounding areas and a number of places that weren't. So it seemed worth the while to shop around and keep looking until you find a place with which you're really happy.
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Hi, I saw this and had a question, I was at an open house the other day, and the agent had no idea about buyer brokers. As a Seller broker, he has the legal responsibility to represent his client to get as much money as he can. I've been told by Real Estate Professionals to always get a Buyer broker, that as a buyer you lose nothing by doing this, and if anything, only stand to gain. Does anyone have any insight on this from a Brooklyn perspective?
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ic96 » Hi, I saw this and had a question, I was at an open house the other day, and the agent had no idea about buyer brokers. As a Seller broker, he has the legal responsibility to represent his client to get as much money as he can. I've been told by Real Estate Professionals to always get a Buyer broker, that as a buyer you lose nothing by doing this, and if anything, only stand to gain. Does anyone have any insight on this from a Brooklyn perspective?
But if you have your own broker, the seller's broker has to split the commission, which makes your offer less desirable (to the broker, who is obligated to present all offers to the seller, but the reality may be different). I don't think you need a buyer's broker. We recently used a mortgage broker at Trachttman & Bach and were happy with him -- Frank Tamayo. -
We didn't have a buyer's broker either. We just had to be aware of the fact that the broker we were dealing with had the best interests of the seller in mind. It was actually all fine. We also got along pretty well with the sellers and we were all very accommodating to one another. But I understand that that can be an unusual experience.The people in our community help create our family.
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A buyer's broker is not really necessary. It's a profession invented for people who are scared to buy or who want to be told what to buy and where/how to live. If you do your research on where you want to live, and what price range you can afford, there is absolutely no reason to get one. In any NY real estate transaction, your lawyer is your best friend. Ask around and get a good one. As mentioned by others, showing up with your own buyer's broker can be a possible deterrent for seller's brokers who don't want to split their commission. Seller's brokers are also not the enemy (as some people seem to think). Of course they will have the seller's interest in mind first and foremost. That is also why your attorney is your best friend (along with your mortgage broker). The good ones zero in on legal bs, corner cutting and deal with that on your behalf. Happy househunting.
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I'm not an expert, but here's some good advice I read here a while back:
A rule of thumb is that total cost of ownership, minus your tax deduction and what you put into principal, should equal what it costs to rent the same space. E.g. if it would cost $1500 to rent, you want less than ca. $2000-2100 total to buy, your monthlys are $750, your mortgage after tax breaks and principal should be $750-$850, you shouldn't be taking a mortgage more than about e.g. $200K once you run the numbers.
Btw, I recently got married and my husband and I are planning on selling our 1BR apartments, both of which are in Prospect Heights. They haven't gone on the market yet, but PM me if you're interested in seeing them. -
Forget co-ops! They're such a pain! Try to find a condo, no board approvals necessary.
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That's true. Coops drag out the process for a really long time and they all have different weird rules that they have made up for their own special reasons, all of which sound completely legimate to them at the time they made them up but may not be so sound several years later when people have moved out and inherited those rules (but are, of course, still carrying them out) I was formerly on a coop board. Blech.The people in our community help create our family.
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BrookSignal » Forget co-ops! They're such a pain! Try to find a condo, no board approvals necessary.
Good coops arent much of a hassle. Depends on the people involved.. . . I'm in a transitional period so I don't wanna kill you, I wanna help you . . . -
I like my co-op. the only person who was sucky in the process was the sponsor - the co-op board, banks, etc all awesome.like a smoked meat with an earthy youth overnote
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gphant » That's true. Coops drag out the process for a really long time and they all have different weird rules that they have made up for their own special reasons, all of which sound completely legimate to them at the time they made them up but may not be so sound several years later when people have moved out and inherited those rules (but are, of course, still carrying them out) I was formerly on a coop board. Blech.
This is a common NYC mythical over-generalization that I'm sure has individual merit particular to this person's experience but in no way represents all co-ops. I've been a board prez for 3 years now, and we have no weird rules. In fact, we try to avoid as many rules as possible so as not to hamper future re-sale value as well as current quality of life. If a new Board functions under old rules, they're not paying attention. Rules should be revisited and revised to fit the needs of current residents, not those of the past."The jawbone of an ass is just as dangerous a weapon today as in Sampson's time."
--- Richard Nixon -
You guys are right. I shouldn't have bashed all co-ops. I had what could have been a really bad situation with the sale of a co-op last year. It was a small (fifteen units) self- managed co-op, long story short the board pres was out of town, share transfer paperwork in the corp mailbox wasn't received... blah blah blah Buyer is ticked off, might back out of the deal, I've got the first mortgage on the co-op, home equity line of credit on the co-op and the mortgage on the new condo. In a condo you deal with the owner of the condo, and of course the real estate agent..blechhh, don't get me started about that. LOL
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Subject: Coops
I've been a board prez for 3 years now, and we have no weird rules. In fact, we try to avoid as many rules as possible so as not to hamper future re-sale value as well as current quality of life. If a new Board functions under old rules, they're not paying attention. Rules should be revisited and revised to fit the needs of current residents, not those of the past.
Ultimately, this is the dream, not always the experience. Maybe you should look for a coop in HIS building! The people in our community help create our family. -
It must be cool! All the kids on the block hang out on his stoop gphant!
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Any further updates on this thread? I'm about to start looking for mortgage brokers, and a colleague of mine at work also used Eugene Lee at Apple Mortgatge (reccommended by someone else above). Anyone else?If you're happy, you're not paying attention.
spurn Productions, Inc. -
VeggieQueen » also be aware they will most likely approve you for what they are willing to give you, not necessarily what you can afford. i think brokers take a cut? i called banks directly to get rates. also, make sure they don't run a credit check until you are actually ready to work with them. every time someone runs your credit report it will negatively affect your score (at least that's my understanding).
Um no it doesn't the only thing that messes up your credit report is not paying bills and credit card balances on time or defaulting totally...DUH. -
sulefamilybkny » [quote="VeggieQueen"]also be aware they will most likely approve you for what they are willing to give you, not necessarily what you can afford. i think brokers take a cut? i called banks directly to get rates. also, make sure they don't run a credit check until you are actually ready to work with them. every time someone runs your credit report it will negatively affect your score (at least that's my understanding).
Um no it doesn't the only thing that messes up your credit report is not paying bills and credit card balances on time or defaulting totally...DUH.[/quote] Nope from credit.com "Inquiries remain in your credit report for 2 years (24 months). The good news is that they can only hurt your credit scores for the first 12 months. After 12 months, they don't impact your credit scores at all." -
One note of caution is new condos--If you see a new buildling with zero or only one unit in contract, most likely you're going to have to wait a while before you can close. Of course, you're more likely to get a choice unit or a slight break on price if you go in early. But, if you want to go quickly, pick a place that's already got 70% in contract, or in the alternative, one that doesn't have far to go. Re: mortgage brokers, yes their cut comes from the bank, not you. Think of it as the bank outsourcing their origination function. We're in contract right now, and our mortgage broker found a way for us to do 10% down without paying PMI by paying an extra .25% in interest by shopping around. If you can get in contract before April 30 and close by June 30, the federal government will cut you a check for $8000. Mortgage rates are projected to go up as the year goes on, so there's really no time like the present. We used Trulia and the NY Times for our place. We saw about 20 places, but wound up going into contract on the first place we saw. Go figure.
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Multiple inquiries for a mortgage, student loan or auto loan are ignored by the FICO scoring system. They don't penalize you for shopping around.
Retail credit inquiries do indeed affect scores, but not as badly as everyone believes.
http://www.tcurranmortgage.com/2010/01/21/the-myth-of-credit-inquiries/
NMLS #40140
PowerHouse Solutions, Inc.
NMLS #3528
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