Real estate news over the past decade has been frightful enough to scare anyone away from purchasing property. Fret no more. Veteran New York City broker Charlie Lewis, of Warburg Reality Partnership, says that mortgage rates are at an all time low, currently about 3.5 percent. So if you’re finally making the major decision to buy a home, here’s what you should know to get started. 

First speak with a mortgage banker or a financial adviser to discuss first time homebuyer programs (SONYMA, FHA and VA loans), and conventional loan options. “The higher your credit score the lower your interest rate,” says Lewis who suggests getting pre approved by your lender in order to know your purchasing power. “You need to know what you can spend and the amount of your closing costs, prior to your search.” 

Next, Lewis, who has appeared on HGTV’s Selling New York and has been selling real estate for nearly a decade, says to keep in mind the down payment requirements, which vary by state, for each type of property (ie. condominiums, co-ops, multi-family homes). The standard amount is 10-20 percent, while condominiums can be as low as 3.5 percent (in an FHA approved building).

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Plan to spend a week to three months finding the house that you love. You will select from a commodity purchase, a typical house that looks the same on any block; or a specialty purchase, like a loft, that might be in a unique area, or a house on a lake with great views. The latter types of properties take longer to find. “The average person sees about 25 places before making a decision” says Lewis.  

You’ve found “the one.” Now it’s time to settle on a purchase price. This takes about a week. “Everything is negotiable,” says Lewis. “Inquire about assessments — anything that may have been added to the original common charges such as a new elevator or roof replacement because they may require an additional fee.” Ask about fixtures, air conditioners, floors and appliances. Make sure that you know what’s staying and what the owners are taking with them. 

At this point, either your broker or a real estate attorney (depending upon your state laws) takes one to two weeks to draw up your contract. Once the buyer and seller agree upon all terms, the buyer signs and returns the contract to the seller’s attorney with a 10 percent deposit that goes into escrow. The seller, in turn, signs and you are now “in contract.” 

The time has arrived to apply for a mortgage (a four to six weeks process). If you are financing a unit you will need a signed contract to issue to the lender so that they can issue you a (mortgage) commitment letter. Once the bank issues the final commitment letter the attorneys for the bank, buyer, and seller set up a date to close on the property. And, at last, you are given the keys to your new home. 

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