Zvi M. Aranoff
Office: 718-788-3984
Cell: 917-416-5197
Fax: 718-768-7134
copylandlord@gmail.com






Please read our page on How to Choose a Real Estate Attorney.

You might also be interested in the article on 5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)



OBTAINING A MORTGAGE ON A RESIDENTIAL UNIT

Obtaining a loan on your new home is not a very difficult process - if you do it correctly, that is.

Here are some tips.

BE ORGANIZED. The more organized you are, the easier and quicker the process. Below is a list of the information you will need when you contact a lender.

SHOP AROUND. Different lenders have different rates and fee structures. Don't accept the first lender you contact. Ask the lenders to provide you with a list of ALL associated fees, not just the interest rate or the origination fee. There are many additional fees that are associated with obtaining a loan - make sure your lender provides you that information. Armed with this information, you will be able to shop around and make an educated decision. You do not want to have surprises at the closing table.

HAVE SUFFICIENT CASH. When you contact lenders, make sure you ask them how much financing they will provide. Typically lenders will provide between 80%-90% of the purchase price, but there are more conservative lenders who will allow only a smaller percentage. If your loan is more than 80% of the purchase price, you will be required to purchase Private Mortgage Insurance (PMI) on any amount above 80%. Make sure your lender clarifies to you what the PMI will cost you, and what are its cancellation or termination policies. Not all banks will provide more than 80%, and not all properties fit the PMI companies' requirements. There are situations in which you would qualify for a given amount, but PMI companies will not insure that property. In addition to having 10-20% of the purchase price, you will need sufficient cash to cover closing costs. Will get to that shortly.

Here's a Loan Application Checklist. Make sure you have ALL the information before you contact a lender. This will help speed up the process and will save you unnecessary headaches down the road.

  •     Driver's License, State ID, or Passport.
  •     Current address and Social Security Number.
  •     Previous address if you have been in your current residence for less than two years.
  •     W2's/1099s and tax returns for the past two years, all pages including blanks.
  •     Paycheck stubs for the last 30 days (2 paystubs if paid bi-weekly, 4 if paid weekly).
  •     Name and address of your employer and supervisor, if applicable, and of your previous employer if you've been at your current job for less than two years.
  •     If applicable: proof of secondary sources of income (such as pension, child support, annuity, etc.).
  •     Last two monthly bank statements or other financial institutions. Include bank name, address and account number, plus the balance for each checking, savings, retirement, and assets account (such as stocks and bonds), all pages including blanks.
  •     Current expenses, including housing, credit card and loan payments, child support, and other obligations.

A complete application would require, in addition to all the above:

  •     A completed lender's application.
  •     A fully executed copy of the sale contract, all pages, addendum and exhibits, including any disclosures if any.
  •     Proof of payment of the good-faith deposit (this is due when you enter into contract to purchase, it is typically 10% of the purchase price, and is held in escrow usually by the seller's attorney), such as canceled check front and back, or escrow letter.
  •     Payment for application, appraisal, and other items. The lender will inform you of those charges.

Note:

  •    The above information is usually required by your lender for each borrower listed on the loan application. This is a general list and is meant as a guideline, not a definitive list. Additional information might be required by your lender.
  •     Your lender might require you to sign a letter of consent to check your credit.

Below you will find a list of lenders I have worked with.



RESIDENTIAL CLOSING COSTS

It is very important to realize that in addition to the actual purchase price, you will be responsible to pay closing costs. There are three categories of closing costs:

1) Fixed fees. Fixed fees are paid irrespective of purchase price or mortgage amount. Condo or co-op association fees are typically fixed. For example: initial contribution to the building's Reserve Fund, Move-In/Out fees, and the like. The broker or owner representative should be able to inform you of all those fees in advance.

Legal fees are typically fixed too. When you retain an attorney, make sure that he or she does not charge by the hours. Use only attorneys that charge a fixed rate.  See
How to Choose a Real Estate Attorney.

2) Fees that are based on a fixed percentage of either the purchase price or the mortgage amount, such as transfer taxes, mortgage tax, and title insurance. Your lawyer should be able to inform you of those fees.

3) Bank fees. These fees vary from bank to bank. These fees include a large number of items, such as application fee, credit check, document preparation, appraisal, bank attorney's fee, courier and various servicing fee, and the like. Your banker should be able to inform you of all those fees.



Here is an approximate breakdown of those fees. While it is impossible to outline a precise breakdown, the following is close enough to the actual amount and will give you a good idea what to expect.


NYC & NYS Transfer Taxes
- Purchase price equal or less than 500K: 1.4% of purchase price
- Purchase price over 500K: 1.825% of purchase price
- Mansion tax (for purchase price of over one million dollars): 1% of purchase price

Mortgage tax
For Condos and 1-2 family house:
- Loan amount is less than 500K: 1.80%
- Loan amount equal or greater than 500K: 1.925%
Loan amount greater than 500K and NOT a Condo or 1-2 family house: 2.80%

Fee Title Insurance
Approx. $450 per $100,000

Mortgage Title Insurance
Approx. $200 per $100,000

Recording Fees
$200-300

Title closer
$200?

Sponsor's attorney's fee
$1000-1500

Lender's attorney's fee
$500-750

Buyer's attorney's fee
Around $1500

Working capital fund contribution
$750

Appraisal
$400

Loan application


Credit report fee
$75-150

Courier fee
?

Escrow service fee
?

Management application fee
Varies, some condos don't charge

Move in fee
Varies, some condos don't charge

Move in refundable deposit
Varies, some condos don't charge

Miscellaneous


Note that at the closing you might be required to prorate the seller for real estate taxes and/or common charges, and/or pay the common charges for the month following the closing.



 






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