There’s something alluring about an apartment in the middle of the action in New York City. With access to restaurants, bars, clubs and plenty of entertainment, a home in the city is a dream for many people. If you’re one of them, you likely know that affordability is an issue to be confronted in such a bustling metropolis. Fortunately, there are ways to get that apartment you’ve been dreaming of in the Big Apple without breaking the bank. Here’s your playbook to moving in and loving city life.
Consider Your Finances
It doesn’t do any good to fall in love with an apartment, only to find out its way out of your price range. For that reason, a good first step to financing your apartment is to consider your financial picture. The Home Affordability Calculator at WhatsMyPayment can help you determine how much you can afford to spend on a monthly mortgage payment. You may need to rearrange your current budget to make a mortgage fit so determine where you can make cuts elsewhere or decide if you may need to bring in more income to make your dream come true and how you’re going to do that.
Check Your Credit Score
Your credit score plays a role in the kind of home loan you can get. A lower score may result in a higher interest rate or the need to apply for loans created for those with poor credit. Many lenders will want to see a high credit score. If that describes you, there will be more options available. Have your credit score handy when you get ready to apply.
Understand Your Housing Options
Once you have a good idea of what you can spend on an apartment, you can begin looking at options in your price range. Keep in mind that the market changes so if you don’t act fast, prices could also change while you decide. It’s also important to remember that co-op apartments tend to require larger down payments for purchase, while finding a condo could take longer because there are fewer available. With a co-op, residents own shares and are therefore responsible for paying for upgrades and repairs and may not be able to borrow as much as if buying a condo. These are important factors when you look for a loan and decide what kind of housing you want to see when you begin your search.
Deciding What Kind Of Loan to Get
Another important consideration when buying an apartment is the type of loan you choose. There are quite a few options available, so it can feel a bit overwhelming to find the one that’s right for you. Many home buyers will enjoy the perks that come with an FHA loan. This kind of loan is insured by the Federal Housing Commission and is ideal for first-time buyers and/or those with low credit or no credit.
An FHA loan allows for a smaller down payment and also allows a buyer to receive a down payment as a gift from a family member, usually parents. This makes it an attractive option for those with a tight budget but also allows for finding your dream apartment. There are some things to keep in mind – an FHA loan requires mortgage insurance and there’s usually a maximum amount that can be borrowed, which is determined by where you buy.
Finding your dream apartment in New York City probably isn’t going to happen overnight. Take your time as you work through the process and make sure you spend time making sure you follow each step so that you end up with the home you will love for years to come.