As the real estate market continues to shift, a unique window is opening for renters who have been paying a premium for their housing. If you’ve been considering trading your rent receipt for a mortgage statement, the first step is creating a concrete plan.
Here are six essential steps to include in your strategy for 2022.
1. Automate Your Savings
Consistency is key when building a down payment. Start with a savings plan where even a small amount is taken automatically from your paycheck. This "set it and forget it" method is the most effective way to build a nest egg without feeling the pinch.
2. Know Your Credit Score
Your credit score is the gatekeeper to your mortgage rate. You are entitled to a free credit report every year. Check your status with the three major bureaus—Equifax, Experian, or TransUnion—to ensure there are no errors holding you back.
3. Explore New York State Assistance
Many first-time buyers aren't aware of the State of New York Mortgage Agency (SONYMA). They offer affordable loan programs specifically designed for New Yorkers, as well as valuable down payment assistance grants that can make the "impossible" purchase possible.
4. Consult a Local Mortgage Broker
While big banks have their place, a local mortgage broker can often explore a wider variety of mortgage products tailored to our specific region. They can help you find a loan that fits your unique financial profile.
5. Consider "Family Assistance"
If you are close to your goal but need a final push, don't be afraid to discuss down payment assistance with family members. "Gift letters" are a common and accepted part of the mortgage process for first-time buyers.
6. Engage a Local Buyer’s Agent
Don't navigate this alone. Engaging a local and experienced buyer’s agent to represent your interests is free for most buyers and ensures you have a professional negotiator in your corner from the initial search to the final closing.
Best of luck in your endeavor to own your first home!
