Maybe you are buying your first home in New York, or perhaps you're relocating to New York from another state. Then again, you may be a long-time New York resident who is looking to either refinance your current mortgage or take out a home equity loan for home improvements. Regardless of your situation, it's important that you educate yourself on New York home loans before shopping for a home and/or mortgage. This article explains what you will need to know before seeking a home loan in New York:
The median price of a home in New York is $211,500. Recently, homes in New York have been appreciating at rates well above the national average. As a result, income levels in many parts of New York are too low to purchase a median-priced home with a conventional loan. Although average interest rates in New York are below the national average, New York has one of the lowest levels of home affordability in the nation.
In New York, before a buyer submits an offer on a home, their real estate agent is required to present them with a completed Real Estate Transfer Disclosure Statement. This document, completed by the seller of the property, requires the seller to name all of the property that will be included in the purchase (refrigerator, stove, alarm system, etc.) and rate certain aspects of the conditions of both the included property and of the house itself. This document requires the seller to disclose any potential problems or hazards that may discourage the buyer from putting an offer in on the home.
New York's Civil Code Provision of the Real Estate Act regulates the issuance of variable interest rates for the purchase of real estate. Therefore, borrowers who are issued large mortgage amounts are guaranteed a fixed rate mortgage. New York law also prohibits the charging of interest more than one day prior to the recording of the mortgage even if the borrower received the loan prior to that time.
In July of 2002, New York law enacted a set of anti-predatory lending laws in order to help protect New York homebuyers from predatory lenders. Some of the provisions of this new set of laws include the prohibition of a lender charging points and fees in excess of 6% of the total principal financed amount, the prohibition of a mortgage company issuing a loan to a borrower in an amount that the borrower could not reasonably afford to repay, and the prohibition of the financing of single-premium credit insurance, among others.
If you're buying a home in the state of New York, you qualify for both federal and state FHA, USDA, and VA loans. First-time home buyers qualify for New York FHA loans with below-market interest rates, and, depending on their eligibility, may also qualify for a loan in order to cover down payment and/or closing costs. Teachers and other professionals who work in an educational capacity may qualify for New York's Extra Credit Teacher Home Purchase Program, a down payment assistance loan with forgivable interest.
In addition to FHA loans, the state of New York also offers comparable programs to persons with disabilities or persons who live with and care for persons with disabilities. The state also offers several unconventional loans designed to aid homebuyers with the costs of their monthly mortgage payment. For example, New York's Interest Only PLUS loan provides qualified homebuyers with a 100% financing 35-year loan that only requires payments toward the accrued interest on the mortgage for the first five years of the loan -- borrowers do not have to pay toward the principal amount borrowed until after the first five years. The individual requirements of each of these loans vary depending on the county in which you are buying a house. Specific requirements can be obtained through the New York Housing Finance Agency.
Last Updated: Friday, March 24, 2017