How Much Money Do You Need to Buy an Apartment in NYC?

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/Show more

How much money do you need to buy an apartment in New York City? We will demystify this topic in the following video. I'm Nick at Hauseit, visit our website https://www.hauseit.com to learn about ways to reduce your closing costs and save money when buying and selling in New York City. So, let’s get started.

You need to have 22 to 26% of the purchase price saved for a condo and 21 to 22% of the purchase price saved for a co-op, assuming 20% down to buy an apartment in New York City. These figures exclude Mortgage Lender Reserve Requirements which are usually 6 months of housing payments. This figures also exclude any Post Closing Liquidity Requirements of your co-op which are typically between 1 to 2 years of monthly housing expenses. Typical buyer closing costs are around 4% for condos and 2% for co-ops. There are closer to 6% or more for new construction properties. So, in short, how much money you need to buying an apartment in New York City depends on whether you're buying a condo or a co-op, the size of your down payment and whether you're financing the purchase. You can estimate your buyer closing costs in New York City using Hauseit's interactive Buyer Closing Costs Calculator and you can find that at https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/.

As the calculator illustrates, buyer closing costs are lower for co-op apartments compared to condo apartments. And this is especially the case if you're taking out a mortgage. This is because many traditional buyer closing costs which include the mortgage recording tax and title insurance do not apply to co-op apartments, and this is because co-ops unlike condos and houses are not considered to be real property. Instead of receiving a traditional deed, buyers of co-ops receive a co-op share certificate and a proprietary lease and the ownership is considered to be personal property instead of real property.

How much of a down payment do I need for co-op? Well the most common down payment for a co-op apartment in New York City is 20% of the purchase price. Exact down payment and financial requirements vary by co-op building. However, it is very rare to find a co-op in the city which permits anything less than 20% down. Buying a co-op in New York City actually requires you to have much more than just the down payment and closing costs in liquid assets. And this is because most co-op buildings require you to have liquid asset reserves of at least 1 to 2 years of housing expenses after closing. And most buildings exclude 401Ks and other tax deferred retirement assets when calculating this metric.

You may wish to consider obtaining a gift from a family member to fortify your overall finances if you are a bit short in meeting the Post-Closing Liquidity Requirement for a co-op. Since not all co-op buildings permit gifting, your buyer's agent can verify the co-op's policy by checking with the listing agent or the building's managing agent directly. Receiving a gift is as simple as preparing a gift letter and submitting this along with your co-op offer and including it as part of your co-op board package once you've signed the contract. You can download a template co-op gift letter by visiting https://www.hauseit.com/nyc-co-op-gift-letter/.

How much do you have to put down to buy a condo? It's possible to put down 10% or less on a condo apartment in New York City. Although some condo buildings have minimum down payment restrictions. The specific down payment rules vary by condo in the same way that the specific down payment rules would vary by co-op. If a building has no minimum, you can put down as little as the bank and the seller are willing to allow.

Now keep in mind that most sellers in New York City won’t necessarily feel comfortable accepting less than 10% down unless they're having a really tough time finding a buyer. Condos have higher buyer closing costs than co-ops so part of the cashflow advantage or savings of making a lower down payment with a condo will be offset by higher buyer closing costs. It’s also important to understand that condo buildings still may have certain sublet restrictions and other house rules which have some resemblance to what you find and may expect with co-ops.

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
.
.
Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
_
#hauseit #hauseitnyc